Forex News
BNY’s EMEA Macro Strategist Geoff Yu observes that EM APAC remains the best-held equity region globally despite sharp swings and sector-specific risks such as semiconductors’ helium exposure. He sees scope for increased APAC allocations supported by light prior U.S. exposure and potential Chinese demand, but expects higher hedge ratios as energy costs and front-end yields weigh on flows and temper further gains.
Strong holdings but higher hedge ratios
"Some of the biggest equity market swings over the past two weeks have taken place in APAC. The boundary between EM and Developed Market Asia is often blurred, but equity markets with elevated pre-conflict exposure to tech or the global AI complex were most at risk of a significant correction. We believe supply risks remain for the affected industries."
"Fitch notes that South Korea sourced nearly 65% of its helium imports from Qatar last year, and Japan on Monday was compelled to publicly disclose its reserves level. Nonetheless, EM APAC remains the best-held equity market region globally, while developed economies in the region are also better-held than their global peers."
"We are broadly sympathetic to the case for increased APAC holdings as asset exposures to U.S. investments were relatively light even before the recent adjustment. The prospect of improved Chinese demand due to base effects and additional stimulus is another idiosyncratic factor that can underpin the region, though growth targets at the recent National People’s Congress have not surprised to the upside."
"However, in the near term, we believe hedge ratios will need to be high. Rising energy costs will damage Asia’s balance of payments, while rising front-end global yields will also dampen repatriation interest for traditional funders."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
According to MUFG’s Senior Currency Analyst Michael Wan, Philippine authorities signalled that rate hikes may be considered if Oil price increases and disruptions linked to the Iran war persist. Finance Secretary Frederick Go expects a limited GDP impact if the conflict is short, but warns of stronger effects if it lasts beyond six months, while downplaying concerns over gradual PHP weakness versus the Dollar.
BSP watching Oil and growth impact
"Separately, the Philippines central bank and Finance Secretary said that rate hikes may be considered if oil price increases and disruptions persist, with the BSP monitoring the severity and persistence due to the Iran war."
"Finance Secretary Frederick Go said that if the Iran war will be short term, the effect on Philippine GDP growth could be less than 10bps, but the impact will be more pronounced if war lasts more than six months."
"Meanwhile, he also said that as long as currency movements are smooth and not abrupt, he is not too concerned about PHP’s weakness against the dollar, and that he is also asking agencies to delay non-essential capital outlay."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
UOB economists Enrico Tanuwidjaja and Vincentius Ming Shen highlight that Bank Indonesia is prioritizing Rupiah stability over rate moves, keeping the policy rate unchanged while tightening FX regulations. Measures include lower FX purchase thresholds, higher DNDF and swap limits, and expanded macroprudential tools and local currency usage, as BI seeks to curb speculation, protect reserves and manage USD/IDR under heightened global and Middle East-related risks.
Rupiah stability drives BI toolkit shift
"BI kept its benchmark policy rate unchanged at 4.75% in Mar, alongside the deposit facility (3.75%) and lending facility (5.50%). The decision continues to aim at anchoring the rupiah stability while using other tools such as macroprudential measures to support economic growth amid global uncertainty and volatility, especially in light of the Middle East conflict."
"BI materially shifted its interest rate stance in Mar MPC by emphasizing FX stability as a priority via tightening its FX transaction thresholds regulations and expanded DNDF/swap limits to curb speculation. Macroprudential policies, promoting credit growth, LCT expansion, and QR cross-border payments will remain as important supporting policies towards achieving higher and more quality economic growth."
"In Mar MPC, BI placed greater emphasis on FX stability rather than navigating the “impossible trinity of monetary policy” as per prior month. Measures include halving the individual FX purchase threshold to USD50,000 (from USD100,000), raising domestic non-deliverable forward (DNDF) sell limits by 50% to USD10mn, and increasing USD swap buy-sell limits by 50% to USD10mn. BI embarked on these steps to curb speculative activity and safeguard FX reserves which came in lower to USD151.9bn in Feb."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/JPY climbs 0.40% to 159.60 as Fed signals just one cut in 2026.
- Powell adopts neutral tone, warning inflation progress may take longer due to tariffs.
- Markets eye BoJ decision as pair nears intervention-sensitive 160.00 level.
USD/JPY posted solid gains of nearly 0.40% on Wednesday after the Federal Reserve (Fed) kept interest rates steady, hinting at just one rate cut in 2026. At the time of writing, the pair trades at around 159.60, remaining volatile.
Yen weakens as Fed hints limited easing, Powell reinforces cautious stance
In his press conference, Fed Chair Jerome Powell struck a neutral stance, saying the central bank is taking a meeting-by-meeting approach and that the current policy stance is appropriate. He added that the main thing they are looking for in inflation is to see progress on goods inflation, "to understand if we are making progress."
Powell commented that the lack of progress in inflation would delay an interest rate cut, adding that, "We believe we will see progress on tariff inflation, but may take more time."
Regarding the economy, he added that it is doing pretty well and that no one knows the effects of the Middle East conflict. He said that inflation overshoot is attributed to goods and tariffs.
Aside from Powell's press conference, the Fed held rates unchanged, with one dissenter: Governor Stephen Miran.
US economic projections show the central bank is eyeing one 25-basis-point rate cut in 2026 and one in 2027. The economy is expected to grow 2.4% in 2026 and 2.3% in the following year. Inflation is projected to jump from 2.4% to 2.7%, with underlying prices expected to rise to 2.7%, up from 2.5%.
Yen traders wait for the BoJ
In Japan, the schedule will feature Industrial Production figures, followed by the Bank of Japan's monetary policy decision on Thursday, in which the BoJ is projected to hold rates unchanged.
(This story was corrected on March 18 at 21:16 to say that the Bank of Japan's monetary policy decision would be on Thursday, not on Friday.)
USD/JPY Price Forecast: Technical outlook
In the daily chart, USD/JPY trades at 159.81. The near-term bias stays bullish as price pushes further above the clustered simple moving averages around 156.50, confirming an established uptrend structure. The RSI at 67 shows firm upside momentum without yet entering extreme overbought territory, aligning with persistent buying pressure. The pair also respects an ascending support trend line from 152.10, reinforcing the series of higher lows and underpinning the current advance.
Immediate support emerges at 159.00, with the rising trend line and the 156.50 moving average zone forming a stronger demand band beneath. A break below that band would expose deeper support near 154.50, where prior consolidation lies. On the upside, initial resistance is seen near 160.50, ahead of the 161.50 area where the descending resistance trend line projected from 159.23 converges with recent swing highs. A daily close above 161.50 would confirm a continuation of the bullish leg and open the way toward higher highs in the coming sessions.
(The technical analysis of this story was written with the help of an AI tool.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
HSBC’s China macro team reviews January–February 2026 data and the latest National People’s Congress outcomes, highlighting a GDP growth target of 4.5–5.0% for 2026. The bank notes strong Fixed Asset Investment, resilient industrial production, and solid exports, alongside proactive fiscal policy, infrastructure-heavy investment plans, and a clear focus on boosting domestic demand, technological upgrading, and capital market reforms under the 15th Five-Year Plan.
Growth target and policy support
"China’s annual National People’s Congress (NPC) concluded on 12 March, after a week of policy-setting meetings."
"The headline GDP growth target was set as “4.5% to 5% for 2026, with a commitment to strive for even better results in practice”."
"China will maintain a proactive fiscal stance, with the central government absorbing a larger share of spending. This shift is a response to ongoing pressures from weakness in the property market, subdued price levels, and slower tax growth, as well as the need to kickstart the 15th FYP. The government is front-loading fiscal support, accelerating bond issuance, and aiming to implement reforms to align local and central fiscal management."
"Spending priorities are closely tied to long-term goals: boosting domestic demand, advancing technology and industrial upgrading, and safeguarding livelihoods."
"Major projects are set to be the principal catalyst for higher investment. The 15th FYP outlines 109 projects across the “Six Networks” (water, power grids, computing power, communications, pipelines and logistics), as well as transportation, consumption, education, and healthcare infrastructure. These projects are anticipated to drive total investment to over RMB7trn this year, according to the National Development and Reform Commission."
"Government funding will play a significant supporting role, with this investment projected to surpass RMB5trn in 2026."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Here is what you need to know for Thursday, March 19:
The Federal Reserve (Fed) held interest rates at 3.50%-3.75% at its monetary policy meeting on Wednesday. The decision was widely expected by markets, but the hawkish tone of Chair Jerome Powell and the Summary of Economic Projections (SEP), with only two rate cuts projected for 2026 and 2027, lifted the US Dollar. At the press conference, Powell claimed, “Near-term higher energy prices will push up overall inflation,” and said that if he doesn't see progress on inflation, it's hard to cut rates.
Meanwhile, market players remain cautious amid the Middle East war, which has spiked energy prices.
The US Dollar Index (DXY) is surging above the 100 price region after the Fed’s decision to hold interest rates. Additionally, the United States Producer Price Index (PPI) rose by 3.9% YoY from the expected 3.7%. This is more worrying than it seems as higher energy prices are not included in this month’s report.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.62% | 0.59% | 0.51% | 0.27% | 1.01% | 0.96% | 1.03% | |
| EUR | -0.62% | -0.03% | -0.11% | -0.35% | 0.37% | 0.32% | 0.39% | |
| GBP | -0.59% | 0.03% | -0.08% | -0.34% | 0.41% | 0.35% | 0.42% | |
| JPY | -0.51% | 0.11% | 0.08% | -0.26% | 0.49% | 0.42% | 0.47% | |
| CAD | -0.27% | 0.35% | 0.34% | 0.26% | 0.73% | 0.67% | 0.74% | |
| AUD | -1.01% | -0.37% | -0.41% | -0.49% | -0.73% | -0.06% | 0.03% | |
| NZD | -0.96% | -0.32% | -0.35% | -0.42% | -0.67% | 0.06% | 0.06% | |
| CHF | -1.03% | -0.39% | -0.42% | -0.47% | -0.74% | -0.03% | -0.06% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD is trading near the 1.1480 price zone, trending down as the Greenback firms after the Fed’s interest rate decision. Focus now shifts to the European Central Bank (ECB) interest rate decision on Thursday, with markets expecting the ECB to also hold rates.
GBP/USD fell near the 1.3290 price zone after two straight days of gains as the pair awaits the Bank of England (BoE) monetary policy decision on Thursday.
USD/JPY is trading close to 160, reaching its highest level since July 2024. The Bank of Japan (BoJ) will reveal its interest rate decision in the Asian session on Thursday.
USD/CAD is trading near the 1.3720 price region, rising for two consecutive days amid Powell comments as the USD strengthens. Meanwhile, the Bank of Canada (BoC) held its interest rate steady at 2.25%, with Governor Tiff Macklem signaling a wait-and-see stance on the press conference after the decision, weighing on the Canadian Dollar (CAD).
West Texas Intermediate (WTI) Oil is trading at $99 per barrel, up 4%, with a mildly bullish bias that has been keeping the Oil on a two-day winning streak amid rising Middle East war tensions.
What’s next in the docket:
Thursday, March 19
- AUD Employment Change s.a. (Feb)
- JPY BoJ Interest Rate Decision
- UK Employment Change (3M) (Jan)
- UK BoE Interest Rate Decision
- CHF SNB Interest Rate Decision
- EUR ECB Interest Rate Decision
- USD Initial Jobless Claims
- USD Philadelphia Fed Manufacturing Survey (Mar)
- USD New Home Sales Change (MoM) (Jan
- NZD Trade Balance NZD (YoY) (Feb)
Friday, March 20
- CNY PBoC Interest Rate Decision
- German Producer Price Index (YoY) (Feb)
- CAD Retail Sales (MoM) (Jan)
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
MUFG’s Senior Currency Analyst Michael Wan argues that Vietnam faces a stagflationary shock if Strait of Hormuz disruptions persist, with higher Oil and energy costs hitting growth and lifting inflation. The bank estimates each US$10/bbl Oil increase cuts GDP by 0.2pp and raises inflation by up to 0.4pp, with 2026 growth potentially falling below 7.5% under severe scenarios.
Oil-driven stagflation risk for Vietnam
"This time is different in this crisis - it is not just about higher oil prices but a potential looming energy shortage, with Asia and to some extent Vietnam hit by a prolonged Strait of Hormuz closure: While this applies to the rest of Asia as well, the vulnerability specifically in Vietnam’s case comes from its dependence on crude oil imports from the Middle East."
"Overall, Vietnam is not as leveraged to the Middle East in terms of direct trade linkages relative to say India within Asia-ex-Japan."
"Nonetheless, the indirect effects across a range of sectors could also be meaningful for Vietnam beyond the first order impact, and ultimately points to a stagflationary environment of higher inflation and slower growth, with a weaker Vietnam Dong likely a key outcome as well."
"Overall, we estimate that every US$10/bbl increase in oil prices cuts GDP growth in Vietnam by around 0.2pp and raises inflation by around 0.3-0.4pp."
"Our GDP forecasts for Vietnam is currently 8.2% for 2026, and if oil prices rise above our baseline assumption to average US$100/bbl on a sustained basis, growth will likely come in below 7.5% for instance."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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