Forex News
- The oil price jumps to near $91.20 amid renewed concerns over Middle East peace.
- US forces launched strikes on Iranian boats and missile-launching sites, which they described as self-defense.
- US Secretary of State Rubio said the Hormuz closure is unlawful and not acceptable to the world.
West Texas Intermediate (WTI), futures on NYMEX, is up 1.8% to near $91.20 during the early European trading session on Tuesday. The oil price holds early gains driven by renewed uncertainty in the Middle East, following United States (US) attacks on Iranian missile launching sites and Iranian boats deploying mines.
However, the impact of the renewed Mideast uncertainty appears to be limited, as the US Central Command has clarified that attacks were in “self-defense” and not meant to break the ceasefire. While there have been no comments from Iran regarding the same.
Also, US President Donald Trump continued to express confidence that negotiations with Iran are “progressing well”, Bloomberg reported.
During the Asian trade, US Secretary of State Marco Rubio stated that the Strait of Hormuz, a critical passage to almost 20% of global energy supply, has to be open “one way or the other”, adding that the passage closure is “unlawful, unacceptable, unacceptable and unsustainable” for the world.
WTI technical analysis
WTI US Oil trades higher at around $91.00 as of writing. However, the near-term bias of the contract is bearish as it stays below the 20-day Exponential Moving Average (EMA), which is at $96.15.
The 14-day Relative Strength Index (RSI) falls to mid-40s, which only hints at easing downside pressure rather than a clear reversal.
On the topside, the 20-day EMA at $96.15 is the first meaningful resistance, and a daily close above this dynamic barrier would be needed for a more sustained recovery towards $100. Looking down, the oil price could extend its decline towards $80.00 if it fails to hold the May 6 low at $86.92.
(The technical analysis of this story was written with the help of an AI tool.)
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.
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- AUD/JPY weakens to around 113.85 in Tuesday’s early European session.
- The surprise rise in Australia’s Unemployment Rate to 4.5% has cooled RBA rate hike bets in June.
- Japan’s core CPI, excluding special factors, climbed 2.8% in April vs. 2.5% in March.
The AUD/JPY cross loses momentum to near 113.85 during the early European session on Tuesday. The Australian Dollar (AUD) weakens against the Japanese Yen (JPY) as Australia’s labor market surprised to the downside, and markets remain concerned over the Middle East uncertainty.
Traders reduce their bets of further interest rate hikes from the Reserve Bank of Australia (RBA) after a surprise rise in the domestic jobless rate. Unemployment Rate in Australia jumped to 4.5% in April, up from 4.3% in March. This figure registered the highest in about four and a half years.
The chance of a rate increase at the RBA's next meeting dropped to just 3%, from 13% before the release of the employment report, according to financial market pricing provided by Westpac.
Furthermore, investor optimism over an imminent US-Iran peace deal was tempered by new US strikes in the Middle East, which weigh on the riskier assets such as the Aussie. The BBC reported on Tuesday that the US Central Command said that it launched new strikes on southern Iran, targeting Iranian missile sites and boats attempting to place mines.
The US military added that the strikes were taken in "self-defense" and were designed "to protect our troops from threats posed by Iranian forces.”
Japan's core consumer inflation rate excluding one-off factors, as measured by the Japanese central bank's new gauge, reached 2.8% in April, according to the Bank of Japan (BoJ) on Tuesday. This figure exceeded the BoJ’s 2% target and accelerated from 2.5% in March. The core-core Consumer Price Index (CPI), excluding special factors, increased 2.2% in April versus a 2.6% rise in March.
The new index, which strips out institutional factors such as education and energy-related subsidies, revealed a much faster year-on-year rise than the 1.4% rate in the benchmark core CPI figure the government released.
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
European Central Bank (ECB) Executive Board Member Isabel Schnabel said on Tuesday that, even if the Iran war ended today, policy action is needed given the damage to the energy infrastructure.
Additional quotes
A June rate hike will be needed.
Looking through the inflation spike is no longer an option.
There are increasing signs that inflation shock is spilling over to other parts of the consumption basket.
The negative impact on growth from the shock will be stronger.
Incoming data implies upside risks to inflation and downside risks to growth.
Don't see any concerning developments with regard to bond yields.
Market reaction
At the time of writing, EUR/USD is down 0.12% on the day at 1.1630, uninspired by these hawkish comments.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.13% | 0.18% | 0.06% | 0.07% | 0.18% | 0.42% | 0.09% | |
| EUR | -0.13% | 0.09% | -0.06% | -0.04% | 0.09% | 0.31% | -0.03% | |
| GBP | -0.18% | -0.09% | -0.13% | -0.12% | 0.00% | 0.22% | -0.10% | |
| JPY | -0.06% | 0.06% | 0.13% | 0.01% | 0.15% | 0.34% | 0.05% | |
| CAD | -0.07% | 0.04% | 0.12% | -0.01% | 0.15% | 0.36% | 0.04% | |
| AUD | -0.18% | -0.09% | -0.01% | -0.15% | -0.15% | 0.21% | -0.11% | |
| NZD | -0.42% | -0.31% | -0.22% | -0.34% | -0.36% | -0.21% | -0.32% | |
| CHF | -0.09% | 0.03% | 0.10% | -0.05% | -0.04% | 0.11% | 0.32% |
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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
The Bank of Japan (BoJ) said on Tuesday that Japan's core consumer inflation rate excluding one-off factors, as measured by the Japanese central bank's new gauge, reached 2.8% in April. This figure exceeded the BoJ’s 2% target and accelerated from 2.5% in March. Meanwhile, core-core CPI excluding special factors up 2.2% in April, versus a 2.6% rise in March.
The new index, which strips out institutional factors such as education and energy-related subsidies, revealed a much faster year-on-year rise than the 1.4% rate in the benchmark core Consumer Price Index (CPI) figure the government published.
Market reaction
At the time of press, the USD/JPY pair is up 0.05% on the day at 159.01.
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
- GBP/USD meets with some supply and erodes a part of Monday’s gains to over a one-week high.
- Geopolitical risks and Fed rate hike bets revive the USD demand, exerting pressure on the major.
- The technical setup favors bulls and backs the case for the emergence of dip-buying at lower levels.
The GBP/USD pair struggles to capitalize on the previous day's strong move up to levels beyond the 1.3500 psychological mark, or a one-and-a-half-week high, and attracts some sellers during the Asian session on Tuesday. Spot prices currently trade near the 1.3485 region, down just over 0.10% for the day, amid a modest US Dollar (USD) strength.
Reports that US forces conducted self-defense strikes in southern Iran on Monday dampen hopes for a deal to end a three-month-old conflict in the Middle East. Furthermore, reviving inflationary fears bolster hawkish US Federal Reserve (Fed) expectations and help the safe-haven USD to regain positive traction following the previous day's decline to over a one-week low, exerting some pressure on the GBP/USD pair.
From a technical perspective, spot prices hold above the 200-period Exponential Moving Average (EMA) on the 4-hour chart and the 50.0% Fibonacci retracement level of the downswing from the monthly peak, keeping a mildly bullish tone. The constructive stance is supported by a moderately positive Relative Strength Index near 61 and a Moving Average Convergence Divergence (MACD) reading that remains in positive territory.
Momentum indicators hint that upside momentum is still in play, albeit without a strong overbought signal. In the meantime, immediate resistance is located at the 61.8% Fibo. retracement at 1.3517, followed by the 78.6% level at 1.3575, while the recent swing high at 1.3649 forms a more distant barrier.
On the downside, initial support is seen at the 50.0% retracement at 1.3476. This is reinforced by the 200-period EMA at 1.3460, with further cushions at the 38.2% level at 1.3435 and deeper Fibo. supports at 1.3384 and 1.3303 if the GBP/USD pair extends a corrective pullback.
(The technical analysis of this story was written with the help of an AI tool.)
GBP/USD 4-hour chart
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 New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.09% | 0.13% | 0.02% | 0.04% | 0.08% | 0.32% | 0.05% | |
| EUR | -0.09% | 0.07% | -0.06% | -0.03% | 0.03% | 0.25% | -0.04% | |
| GBP | -0.13% | -0.07% | -0.13% | -0.10% | -0.04% | 0.19% | -0.09% | |
| JPY | -0.02% | 0.06% | 0.13% | 0.02% | 0.09% | 0.29% | 0.04% | |
| CAD | -0.04% | 0.03% | 0.10% | -0.02% | 0.08% | 0.30% | 0.02% | |
| AUD | -0.08% | -0.03% | 0.04% | -0.09% | -0.08% | 0.22% | -0.06% | |
| NZD | -0.32% | -0.25% | -0.19% | -0.29% | -0.30% | -0.22% | -0.28% | |
| CHF | -0.05% | 0.04% | 0.09% | -0.04% | -0.02% | 0.06% | 0.28% |
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).
- Asian shares trade mixed as traders tracked diplomatic progress toward reopening the Strait of Hormuz.
- Trump noted that Iran deal talks are "proceeding nicely," but warned failed negotiations could trigger renewed military attacks.
- South Korea’s KOSPI hit a record 8,131, driven by booming demand for AI semiconductor and memory chips.
Asian stocks show mixed results on Tuesday as traders tracked diplomatic progress regarding the US-Iran conflict. Mediators reported that an agreement to reopen the Strait of Hormuz fully is nearing, providing some relief to the markets.
This diplomatic movement followed self-defense strikes conducted by US forces in southern Iran on Monday. According to a US Central Command spokesperson, the strikes targeted missile launch sites and Iranian vessels attempting to deploy mines. While the US military emphasized its commitment to protecting its forces and maintained that it is still exercising restraint during the ceasefire, US President Donald Trump stated that negotiations toward a deal to end the conflict and reopen the Strait of Hormuz were proceeding nicely.
South Korea’s KOSPI gains 3.19% to trade near 8,100 at the time of writing, inching slightly lower after reaching a fresh record high of 8,131 on Tuesday. The rally was fueled by strength in AI-related semiconductor stocks amid upbeat earnings expectations and robust demand for high-bandwidth memory chips. Samsung Electronics and SK hynix led the gains, while advances also spread across automakers, battery makers, and shipbuilders.
Japan’s Nikkei 225 Index falls 0.4% to near 64,900, while the broader Topix Index managed a slight gain of 0.11% to near 3,950. The Nikkei paused for breath after an explosive Monday rally that saw it smash past the 65,000 milestone for the first time in history. Investors locked in profits amidst cooling geopolitical news and massive corporate shakeups, which led to a retreat in technology and artificial intelligence-related shares like Kioxia Holdings, Fujikura, and Advantest, all of which had driven the previous day's gains.
Hong Kong’s Hang Seng Index rises by 0.45% to trade above 25,700, led higher by financial and electronic technology stocks. Notable gains were recorded in Semiconductor Manufacturing International Corporation and Lenovo Group, which surged 9.1% and 10.7%, respectively. Conversely, sentiment toward Xiaomi Corporation deteriorated after short bets on the company climbed to a record high, driven by concerns over rising memory costs and intensifying competition in China’s electric vehicle market.
Asian stocks FAQs
Asia contributes around 70% of global economic growth and hosts several key stock market indices. Among the region’s developed economies, the Japanese Nikkei – which represents 225 companies on the Tokyo stock exchange – and the South Korean Kospi stand out. China has three important indices: the Hong Kong Hang Seng, the Shanghai Composite and the Shenzhen Composite. As a big emerging economy, Indian equities are also catching the attention of investors, who increasingly invest in companies in the Sensex and Nifty indices.
Asia’s main economies are different, and each has specific sectors to pay attention to. Technology companies dominate in indices in Japan, South Korea, and increasingly, China. Financial services are leading stock markets such as Hong Kong or Singapore, considered key hubs for the sector. Manufacturing is also big in China and Japan, with a strong focus on automobile production or electronics. The growing middle class in countries like China and India is also giving more and more prominence to companies focused on retail and e-commerce.
Many different factors drive Asian stock market indices, but the main factor behind their performance is the aggregate results of the component companies revealed in their quarterly and annual earnings reports. The economic fundamentals of each country, as well as their central bank decisions or their government’s fiscal policies, are also important factors. More broadly, political stability, technological progress or the rule of law can also impact equity markets. The performance of US equity indices is also a factor as, more often than not, Asian markets take the lead from Wall Street stocks overnight. Finally, the broader risk sentiment in markets also plays a role as equities are considered a risky investment compared to other investment options such as fixed-income securities.
Investing in equities is risky by itself, but investing in Asian stocks comes along with region-specific risks to be taken into account. Asian countries have a wide range of political systems, from full democracies to dictatorships, so their political stability, transparency, rule of law or corporate governance requirements may diverge considerably. Geopolitical events such as trade disputes or territorial conflicts can lead to volatility in stock markets, as can natural disasters. Moreover, currency fluctuations can also have an impact on the valuation of Asian stock markets. This is particularly true in export-oriented economies, which tend to suffer from a stronger currency and benefit from a weaker one as their products become cheaper abroad.
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