Forex News
Rabobank Senior FX Strategist Jane Foley discusses EUR/GBP in light of shifting expectations for the European Central Bank (ECB) and Bank of England (BoE). She notes that EUR/GBP has traded with a downside bias recently but sees this fading as spring progresses. With UK growth concerns, political risks and limited BoE tightening, Foley expects EUR/GBP to grind higher towards 0.88 into the autumn.
Rabobank sees downside bias fading
"Since the start of this month, EUR/GBP has been trading in a fairly narrow range, albeit with a downside bias. However, heading further into the spring we see the downside bias as running out of steam and expect the currency pair to turn modestly higher."
"That said, having priced in significant hawkish reactions from most G10 central banks in March, in recent weeks the market has been moderating its collective view regarding the likely reactions of several major central banks including both the ECB and the BoE. The market is still expecting rate hikes from both these central banks on a 1-year view, though less action is now implied by market rates than in March."
"We favour buying dips in EUR/GBP into the May election. We then look for a gradual move higher towards 0.88 into the autumn."
"The downgrade in UK economic prospects adds another challenge for the Labour party headed into the May local elections in England and parliamentary elections in Wales and Scotland. A drubbing for the Labour party does increase the chances of a leadership challenge for the PM Starmer."
"The risk of such an event is likely to keep speculators unwilling to hold long GBP positions into next month. We favour buying dips in EUR/GBP into the May election."
"Given current optimism that the war in the Middle East is coming to an end and optimism that the inflationary impact of the conflict could avoid worst case scenarios, weak UK GDP data could lead to further dampening of BoE rate hike speculation and undermine the value of the pound further."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Societe Generale’s Kit Juckes discusses whether the US Dollar’s global dominance is under threat as global imbalances widen and IMF meetings highlight systemic risks. He notes that while the Dollar’s share of global activity should gradually decline as the US share of GDP falls, neither the Euro nor the Chinese yuan currently offers a credible alternative reserve currency.
Dollar supremacy faces slow structural erosion
"“Is the US Dollar’s pre-eminence under threat?” is a frequent question these days."
"As the US share of global GDP falls, it makes sense for the dollar’s share of FX transactions, FX reserves, denomination of bond and equity issuance to fall too, but there isn’t a viable competitor to threaten its position at the heart of the global financial system."
"Suffice to say that dollar dominance has been phenomenal compared to the dominance even of the pound in the 19th century."
"The Chinese yuan, with capital controls and policies which help it remain competitive, isn’t a candidate to replace the dollar, and the euro will only be a competitor when it is the currency of a far more unified economic bloc."
"Until then, the most likely outcome is for GBP to continue fading away and the JPY to do likewise."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- AUD/USD strengthens as optimism around renewed talks between Washington and Tehran boosts risk appetite.
- Softer-than-expected US producer inflation data eases pressure on US monetary policy.
- Warnings from Australia’s central bank about stagflation risks temper the economic outlook.
AUD/USD rises on Wednesday and trades around 0.7140 at the time of writing, up 0.28% on the day. The pair benefits from an improved risk environment after reports suggested that new discussions could take place between the United States (US) and Iran before the two-week ceasefire expires.
According to several media reports, US President Donald Trump signaled that negotiations could resume as early as this week. Vice President JD Vance also cited “significant progress” during an initial round of talks held in Pakistan, adding that follow-up meetings could take place in the coming days. Hopes of geopolitical de-escalation are reducing demand for safe-haven assets and supporting risk-sensitive currencies such as the Australian Dollar (AUD).
At the same time, the latest inflation data from the United States weighed on the US currency. The Producer Price Index (PPI) rose 0.5% MoM in March, well below the market consensus of 1.2%. Core PPI increased by just 0.1%. On an annual basis, the headline reading reached 4%, below the expected 4.6%, reinforcing the view that inflationary pressures may be easing.
These figures strengthen expectations that the Federal Reserve (Fed) may not need to tighten monetary policy, which limits the appeal of the US Dollar (USD) and supports AUD/USD gains.
Domestically, the Reserve Bank of Australia (RBA) remains cautious. Deputy Governor Andrew Hauser warned that the months ahead could be challenging for the Australian economy, citing an energy crisis fueled by the Middle East war alongside persistent inflation pressures. According to Hauser, these factors increase the risk of a stagflation-like scenario.
Meanwhile, consumer confidence in Australia deteriorated sharply in April, with the Westpac survey showing a 12.5% drop, reflecting concerns over rising energy costs and global economic uncertainty.
Investors are now turning their attention to upcoming macroeconomic releases, including Australia’s employment report and China’s growth data, which could provide the next major catalysts for the Aussie.
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 | 0.13% | 0.12% | 0.19% | 0.08% | -0.23% | 0.07% | 0.21% | |
| EUR | -0.13% | -0.00% | 0.07% | -0.05% | -0.28% | -0.05% | 0.08% | |
| GBP | -0.12% | 0.00% | 0.06% | -0.01% | -0.26% | -0.05% | 0.09% | |
| JPY | -0.19% | -0.07% | -0.06% | -0.10% | -0.34% | -0.14% | 0.00% | |
| CAD | -0.08% | 0.05% | 0.01% | 0.10% | -0.23% | -0.02% | 0.11% | |
| AUD | 0.23% | 0.28% | 0.26% | 0.34% | 0.23% | 0.23% | 0.36% | |
| NZD | -0.07% | 0.05% | 0.05% | 0.14% | 0.02% | -0.23% | 0.14% | |
| CHF | -0.21% | -0.08% | -0.09% | -0.01% | -0.11% | -0.36% | -0.14% |
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).
ING strategist Michiel Tukker stresses that current Oil volatility is feeding directly into rate expectations for the European Central Bank (ECB), Federal Reserve (Fed) and Bank of England (BoE). He explains that a $10 move in Oil can quickly shift implied hikes by about 25bp, distorting short-end pricing, widening bid-ask spreads and reducing liquidity as geopolitical headlines hit markets.
Oil volatility distorts rate pricing
"The ECB is clearly not set on raising policy rates this April already, but market expectations remain high for a hike in June. Currently, a full 25bp of hikes is priced in by June and at least one more hike by the end of this year."
"Much will depend on the oil price, however, because for every $10 increase in the oil price, the market’s hiking expectations increase by roughly 25bp."
"Similarly for the Fed, and especially the Bank of England, the correlation between policy expectations and oil prices remains very tight."
"With current volatility in oil markets, a $10 move can materialise in just one day."
"The volatility in short-end rates makes it difficult for market players to take positions, potentially distorting the relationship between actual expectations and market pricing."
"Even if an investor has a high conviction view of a central bank’s reaction function, taking a position is risky, as a single geopolitical headline can trigger a sharp jump in the wrong direction."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/JPY returns above 159.00 after bouncing from 158.60 lows on Tuesday.
- The Greenback trims some losses as investors ponder mixed news on Iran.
- Analysts at the UOB bank see the pair likely to test 158.00 in the coming weeks.
The US Dollar (USD) is posting moderate gains against the Japanese Yen (JPY) on Wednesday, returning to levels past 159.00 to partially reverse the 0.5% depreciation witnessed over the last two days. The Greenback is showing a frail recovery against its main peers, as investors consider contradictory news about Iran’s peace process.
US President Trump has shown optimism about the war ending "very soon", following comments suggesting that the US and Iran delegations might return to the conversation table in the coming days.
Later on Wednesday, a report by Associated Press (AP) said that mediators are moving closer to extending the two-week ceasefire that expires next week.
US is considering sending more troops
The US military, on the other hand, announced earlier on the day that the blockade of the Strait of Hormuz had been “fully implemented”, a measure that Iran condemned as “illegal and amounting to piracy.” Apart from that, the Washington Post reported that the US administration is considering the deployment of thousands of additional troops to the Middle East.
Currency analysts at the United Overseas Bank (UOB), however, expect the pair to extend its broader bearish trend, aiming to 158.00 in the coming weeks: "Yesterday, USD broke slightly below 158.70 as it dropped to a low of 158.59. Downward momentum is starting to build, and USD could potentially drop below 158.50 and test 158.00. To sustain the buildup in momentum, USD must hold below the ‘strong resistance’ level, now at 159.50."
(This story was corrected on April 15 at 12:14 GMT to specify the correct name of the pair as USD/JPY, not USD/JPI.)
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.
DBS Group Research’s Philip Wee notes that the US Dollar (USD) has given back most of its Iran‑war related strength, with the US Dollar Index (DXY) down this month and nearing pre‑conflict levels. He links Dollar softness to resilient equities, contained Brent prices below $100, and a growing refusal by US allies to escalate the Middle East conflict or support Washington’s blockade strategy.
DXY retreats as conflict premium fades
"The DXY Index has surrendered more than 80% of its gains from the Iran conflict."
"The Index is down 1.8% this month to 98.1, approaching the 97.6 level before Operation Epic Fury began."
"With Brent crude prices holding mostly below $100 per barrel the past week, markets have been holding out for a diplomatic solution, driven by President Donald Trump’s April 8 temporary ceasefire."
"Despite the failure of the first talks in Islamabad, Trump’s decision to blockade the Strait of Hormuz has strengthened the resolve of EU nations and China to push for a diplomatic solution."
"For now, the worst oil shock scenario appears to be partially contained, not by a lack of conflict, but by a refusal of America’s allies to escalate the Middle Crisis into a total war, which is a significant contrast to previous decades of coalition-based interventions."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann keep a mildly positive short-term view on AUD/USD after it climbed to 0.7147. The pair is expected to trade between 0.7100 and 0.7155 intraday, with a possible test of 0.7155 if momentum improves. However, the broader 1–3 month technical picture still points to a lower Australian Dollar toward 0.6765 if 0.6850/0.6870 breaks.
Short term constructive but medium term soft
"Despite advancing, AUD has not gained much momentum, and it is unlikely to rise much further."
"Today, we expect AUD to trade between 0.7100 and 0.7155."
"That said, a test of 0.7155 is not ruled out, but AUD must close above this level before a move to 0.7190 can be expected."
"On the downside, a breach of 0.7060 (‘strong support’ level was at 0.7030 yesterday) would mean that the current upward pressure has eased."
"The overall technical picture points to a lower AUD/USD; a breach of the 0.6850/0.6870 support zone could trigger a decline toward 0.6765."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
United States (US) President Donald Trump said in an interview with Fox Business Network that the war with Iran is very close to an end.
Additional remarks
We do not have the same relationship with any country that turned the US down in helping.
Strait is opening.
I hope Warsh gets confirmed next week.
Trump says we have to show the incompetence, when asked if the administration will call for an end to the probe of Fed's Powell.
If he doesn't leave, I have to fire him.
Think rates will go lower when Warsh gets in.
Market reaction
There seems to be a further recovery in the US Dollar (USD) after the interview release. As of writing, the US Dollar Index (DXY) trades 0.15% higher to near 98.25.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
- Gold prices pull back to $4,800 after failing at the $4,850 resistance area.
- The US Dollar picks up as traders ponder mixed messages on Iran.
- XAU/USD maintains a moderate bid tone but remains trading within range.
Gold (XAU/USD) shows moderate losses on Wednesday, trimming gains following a two-day rally. The precious metal failed to find acceptance above the $4,850 resistance area on Wednesday and pulled back to session lows below $4,800, as the US Dollar Index bounced up amid mixed messages on Iran.
US President Donald Trump is showing a positive tone concerning the resolution of the war. Trump suggested on Tuesday that the peace talks are likely to resume soon, and on Wednesday, he said that Iran’s war can be over very soon in an interview on the Fox Business channel.
Meanwhile, the US military affirmed earlier on Wednesday that the blockade of the Strait of Hormuz has been “fully implemented”, and the Washington Post reported that the US administration is considering the deployment of thousands of additional troops to the Middle East. This measure is aimed at pressuring Iran to close a deal, but might also make the peace process teeter.
Technical Analysis: Resistance at $4,850 is capping bulls
XAU/USD maintains a near-term constructive bias, yet with price action trapped between $4,600 and $4,850. The Relative Strength Index (RSI) in four-hour charts is above the key 50 level but shows a weakening momentum, while the Moving Average Convergence Divergence (MACD) remains in positive territory, highlighting the positive bias.
Bulls, however, need to breach the resistance area above $4,850 to extend their recovery from late March lows, towards a previous support-turned-resistance right above $5,000. Further up, the March 10 high, at $5,235, emerges as the next target.
On the downside, the April 5, 7, and 12 lows, between $4,610 and $4,630, are likely to challenge bears. A confirmation below that area would put sellers in control and increase pressure towards March 26 lows at the $4,350 area.
(The technical analysis of this story was written with the help of an AI tool.)
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