Forex News
Deutsche Bank’s Jim Reid notes that improved sentiment around a potential Iran deal helped the S&P 500 recover earlier losses and close slightly higher. The index is less than 1% below its record high and on track for an eighth straight weekly gain, led by defensive sectors and blue-chip names, while some tech and consumer names underperformed on earnings news.
Index nears record as risk mood improves
"The tentative optimism meant 10yr Treasuries (-1.4bps) and the S&P 500 (+0.17%) posted modest gains, with equity futures and Asian markets also moving higher this morning."
"For equities, improved optimism on Iran meant that US stocks erased initial declines, with the S&P 500 (+0.17%) advancing despite trading in the red for most of the session.This leaves the index just -0.74% below its all-time high and on track to post an eighth consecutive weekly gain, which would be the longest such run since 2023."
"Defensive sectors and blue-chip names led the advance, bringing the Dow Jones (+0.55%) to a new record high. Tech stocks were broadly stable, with the Nasdaq (+0.09%) and the Magnificent 7 (+0.03%) little changed, though Nvidia (-1.77%) fell after its results the previous evening."
"By contrast, IBM (+12.43%) surged on news that the US administration agreed to award the company $1bn to build a foundry for producing quantum computing chips. Meanwhile, Intuit (-20.02%) and Walmart (-7.27%) were two of the three biggest decliners in the S&P after soft earnings releases."
"A positive mood has mostly continued in Asian markets overnight with the Nikkei (+2.29%) leading the way. Most other main markets are up around half a percent. S&P (+0.26%) and Nasdaq (+0.38%) futures are also higher alongside European Stoxx (+0.82%) futures."
"This follows a less positive session in Europe yesterday, with several indices losing ground, including Germany’s DAX (-0.53%) and France’s CAC 40 (-0.39%). However, the STOXX 600 (+0.04%) eked out a fourth consecutive gain, supported by equity strength in other countries, including the UK and Switzerland."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Dow futures rise as oil prices fall on easing supply worries over US-Iran talks optimism.
- US Marco Rubio saw encouraging signs, while Iran noted narrowed gaps despite no official deal being reached yet.
- Trump will swear in Fed Chair Kevin Warsh on Friday, who favors lower interest rates and systematic balance-sheet reductions.
Dow Jones futures advance 0.26% above 50,500 during European hours ahead of the United States (US) regular opening on Friday. Meanwhile, the S&P 500 gain 0.28% toward 7,500, and the Nasdaq 100 futures rise 0.34% to near 29,550.
US stock futures gain after Wall Street posted gains for the second straight day on a regular Thursday, with the Dow Jones advanced 0.55%, the S&P 500 gained 0.17%, and the Nasdaq 100 added 0.09%.
US stock markets experience gains as market sentiment improves on lower Crude oil prices amid easing supply concerns, amid growing optimism that the United States (US) and Iran could eventually reach an agreement. US Secretary of State Marco Rubio noted there were some encouraging signs surrounding a possible deal with Iran. Meanwhile, senior Iranian officials clarified that no deal has been officially reached with the United States, but they acknowledged that the gaps between the two nations have narrowed.
US President Donald Trump will swear in Kevin Warsh as the chair of the US Federal Reserve on Friday at the White House. Warsh’s established economic philosophy leans toward lower interest rates paired with a systematic reduction of the Fed's balance sheet. However, he enters a divided central bank; other governors are actively mulling rate hikes to combat the inflationary pressures stemming from Trump's war with Iran.
Despite the benchmark indices' gains, Walmart shares tumbled 6.85% following a cautious earnings forecast and executive commentary pointing to weaker consumer spending, a sharp contrast to the broader market's 0.55% gain. Meanwhile, Deere slid 5.22% after a class-action lawsuit over its "right-to-repair" practices sparked investor concern, overshadowing its stable earnings outlook on a day the wider market climbed 0.51%. Traders are likely watching the upcoming earnings reports from several notable companies, including BJ’s Wholesale Club, Booz Allen Hamilton, CoinShares, and Richtech Robotics.
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
- USD/JPY edges up to near 159.10 as the US Dollar trades higher.
- Iran has stated that the final draft of the peace proposal with the US has been finalized.
- Japan’s National CPI ex. Fresh Food growth cools down at a faster-than-expected pace to 1.4% YoY.
The USD/JPY pair trades slightly higher to near 159.10 during the European trading session on Friday. The pair has been broadly sideways over the last three trading days, with investors awaiting the announcement of a deal between the United States (US) and Iran.
As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.1% higher to near 99.30.
Latest comments from Iran, as reported by the Iranian Labour News Agency (ILNA), have signaled that it has finalized the last draft of the peace proposal with the US. However, Tehran remains adamant about preserving uranium stockpiles and the recognition of Iran’s authority over the Strait of Hormuz.
Meanwhile, investors remain confident that the Federal Reserve (Fed) will not cut interest rates this year, as higher energy prices have accelerated US inflationary pressures. The US Consumer Price Index (CPI) report for April showed last week that the headline inflation increased to 3.8% Year-on-Year (YoY), the highest level seen in almost three years.
In Japan, National Consumer Price Index (CPI) data for April have come in lower than projected. Nation CPI ex. Fresh Food arrived lower at 1.4% YoY vs. 1.7% estimates and the previous reading of 1.8%.
USD/JPY technical analysis
USD/JPY remains stuck in a range between 158.65 and 159.35 for the last three trading days. The near-term outlook of the pair remains positive as it holds above the 20-day Exponential Moving Average (EMA) at 158.44.
The 14-day Relative Strength Index (RSI) prints around 56, pointing to moderate bullish momentum without yet signaling overbought conditions.
On the downside, the 20-day EMA at 158.44 is the first meaningful support to watch; a daily close below it would hint at a deeper corrective phase toward the May 14 low of 157.31. On the upside, the April 30 high at 160.73 remains the key barrier, which could be retested only after a decisive breakout of the above-mentioned three-day trading range.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
National CPI ex Fresh Food (YoY)
Japan’s National Consumer Price Index (CPI), released by the Statistics Bureau of Japan on a monthly basis, measures the price fluctuation of goods and services purchased by households nationwide excluding fresh food, whose prices often fluctuate depending on the weather. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.
Read more.Last release: Thu May 21, 2026 23:30
Frequency: Monthly
Actual: 1.4%
Consensus: 1.7%
Previous: 1.8%
Source: Statistics Bureau of Japan
Commerzbank’s Volkmar Baur highlights that the Japanese Yen (JPY) remains weak despite only mildly softer April inflation, as rising global interest rates and Japan’s high debt burden weigh on the currency. Elevated energy prices linked to the Iran conflict are hurting the Japanese economy, though a resolution, lower Oil prices and a Bank of Japan (BoJ) rate hike in mid-June could offer some relief.
High energy costs and BoJ outlook
"The inflation figures from Japan released this morning did not really contain much new information, so the Japanese yen’s reaction was muted. While the figures came in slightly below the median expectations reported by Bloomberg, it is important to note that these are still the national figures for April, and secondly, the downward surprise was due to a one-off effect related to school fees, which should have no impact on underlying inflation."
"The Japanese yen, however, has continued to struggle in recent weeks. Rising global interest rates are weighing on the currency, as the country’s high nominal debt could quickly turn this into a significant fiscal burden. The government, however, hasn’t helped matters in recent days by already discussing a supplementary budget roughly one month after the budget for this fiscal year was approved."
"As long as the conflict persists, the Japanese yen will continue to struggle. A prompt resolution, lower oil prices, and the expected interest rate hike by the Bank of Japan in mid-June, on the other hand, could provide relief."
"The main driver for the JPY, however, remains the uncertainty surrounding the Iran conflict and the resulting high energy prices. These are weighing on the Japanese economy, as was evident once again in yesterday’s flash estimates for the Purchasing Managers’ Index, and thus on the currency as well."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/CHF steadies near 0.7870 after pulling back from the 0.7900 area.
- Market volatility remains subdued on Friday, with markets awaiting developments from the US-Iran conflict.
- The pair has lost momentum after failing to extend gains beyond 0.7900.
The Swiss Franc (CHF) consolidates right below 0.7870 against the US Dollar (USD) on Friday. The pair retreated from the 0.7900 area over the previous two days, but remains steady within the weekly range, with investors wary of taking risks, amid confusing messages from the Middle East.
The Iran-US peace deal seems stalled, amid divergences in the nuclear issue and control of the Strait of Hormuz. Markets, however, cling to hopes of a negotiated end of the conflict, as Iranian authorities revise the latest peace proposal submitted by the US. On Thursday, the US Secretary of State Marco Rubio affirmed that there are “good signs” in the peace process, which contributed to support a moderate optimism.
Technical Analysis: Bullish momentum is starting to fade
USD/CHF trades at 0.7869, holding a capped tone after failing to find acceptance above 0.7900 earlier this week. The Relative Strength Index (RSI) around 50 signals flat momentum, while the Moving Average Convergence Divergence (MACD) remains slightly negative, which together hint that bulls have lost steam.
On the topside, the resistance area between 0.7920 and 0.7930 (April 8, 13, and 29 highs) should give way in order to clear the path towards the 0.8000 psychological level and the early April highs, around 0.8015.
A confirmation below May 18 lows at 0.7840, and the broken trendline, which is now lying in the area of 0.7825, on the contrary, is likely to give fresh hopes for bears, to retest May's bottom, at the 0.7765 area
(The technical analysis of this story was written with the help of an AI tool.)
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 Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.14% | 0.12% | 0.10% | 0.13% | 0.31% | 0.25% | 0.13% | |
| EUR | -0.14% | -0.01% | -0.04% | -0.01% | 0.18% | 0.12% | -0.02% | |
| GBP | -0.12% | 0.01% | -0.02% | 0.01% | 0.18% | 0.14% | -0.01% | |
| JPY | -0.10% | 0.04% | 0.02% | 0.05% | 0.21% | 0.15% | 0.00% | |
| CAD | -0.13% | 0.01% | -0.01% | -0.05% | 0.16% | 0.11% | -0.03% | |
| AUD | -0.31% | -0.18% | -0.18% | -0.21% | -0.16% | -0.05% | -0.22% | |
| NZD | -0.25% | -0.12% | -0.14% | -0.15% | -0.11% | 0.05% | -0.15% | |
| CHF | -0.13% | 0.02% | 0.01% | -0.01% | 0.03% | 0.22% | 0.15% |
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).
- USD/CAD gains as rising hawkish Fed expectations support the US Dollar.
- Geopolitical disruptions in the Strait of Hormuz threaten to fuel US inflation, boosting higher Fed rate expectations.
- The commodity-linked CAD weakens as oil prices ease on rising hopes for a US-Iran diplomatic agreement.
USD/CAD remains stronger for the fourth consecutive day, hovering around 1.3790 during the early European hours on Friday. The pair holds ground as the US Dollar (USD) receives support from rising odds of hawkish sentiment surrounding the Federal Reserve (Fed) policy stance.
Traders are pricing in rising expectations that the US Federal Reserve (Fed) will keep interest rates higher, which could be attributed to the prolonged energy crisis linked to the Strait of Hormuz disruption threatening to feed into core US consumer prices and inflation expectations.
Fed officials are currently holding the federal funds rate steady, and policymakers are moving away from the idea of rate cuts and are increasingly open to raising rates if inflation fails to cool down.
US President Donald Trump will swear in Kevin Warsh as the chair of the US Federal Reserve on Friday at the White House. The new chair succeeds Jerome Powell, whose term expired on Friday but who has continued to serve on a pro-tempore basis until the transition.
The commodity-linked Canadian Dollar (CAD) struggles against the US Dollar (USD) amid lower oil prices, given Canada’s status as the largest crude exporter to the United States (US). West Texas Intermediate (WTI) oil price declines for the third successive day, trading around $96.80 at the time of writing.
Crude oil prices ease on easing supply concerns amid growing optimism that the United States (US) and Iran could eventually reach an agreement. US Secretary of State Marco Rubio noted there were some encouraging signs surrounding a possible deal with Iran. Meanwhile, senior Iranian officials clarified that no deal has been officially reached with the United States, but they acknowledged that the gaps between the two nations have narrowed.
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
OCBC’s Christopher Wong sees Gold showing tentative stabilisation as softer UST yields and lower Oil prices offer support. However, bullion remains trapped between lower-yield support and the risk that any renewed crude spike revives inflation and Fed tightening concerns. The bank notes fading bearish momentum but expects two-way trading with upside capped unless Oil and yields ease further.
Bullion supported by yields but constrained
"Gold showed tentative signs of stabilisation, helped initially by softer UST yields and lower oil prices as markets priced some hope of progress on US–Iran diplomacy. The move was not a clean risk-on rebound for bullion, however."
"Gold remains caught between two forces: lower yields/oil are supportive, but any renewed spike in crude quickly revives inflation and Fed-tightening concerns, lifting yields and the USD."
"For now, the near-term bias is less bearish than earlier in the week, but upside still looks capped unless oil and yields ease more decisively."
"Bearish momentum on daily chart shows tentative signs of fading while the rise in RSI moderated. 2-way trades likely in the interim while conviction on direction remains low at this point."
"Support at 4452 (23.6% fibo retracement of 2026 high to low), 4365 (200 DMA). Resistance at 4670/78 levels (50 DMA, 38.2% fibo), 4800/50 levels (50% fibo, 100 DMA)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- NZD/USD drifts lower to around 0.5870 in Friday’s early European session.
- Traders will closely monitor signs of progress amid efforts to reach a US-Iran peace deal.
- RBNZ is anticipated to hold rates at 2.25% at its May meeting next Wednesday.
The NZD/USD pair loses ground to near 0.5870 during the early European trading hours on Friday. Ongoing geopolitical tensions in the Middle East and uncertainty surrounding the US-Iran peace deal continue to boost a safe-haven currency such as the US Dollar (USD) against the New Zealand Dollar (NZD).
Negotiations between the US and Iran are ongoing, with the two sides exchanging messages and draft texts in an effort to establish a formal framework for an agreement to end the conflict. However, significant challenges remain despite Pakistan mediating US-Iran talks.
Iranian officials said on Friday that no deal has been reached with Washington, but gaps have been narrowed. Nonetheless, the Islamic Republic’s Supreme Leader, Mojtaba Khamenei, stated that Iran’s uranium enrichment and Tehran’s control over the Strait of Hormuz remain among the sticking points.
Concerns over sticky inflation data fuel expectations that the US Federal Reserve (Fed) may maintain high interest rates or consider additional hikes. This, in turn, might contribute to the Greenback’s upside and create a headwind for the pair. Markets are pricing in a 41.9% probability that the Fed will raise interest rates by 25 basis points (bps) by year-end, according to the CME FedWatch tool.
On the Kiwi front, the Reserve Bank of New Zealand (RBNZ) is expected to hold its key policy rate steady next Wednesday, but a slim majority of economists in a Reuters poll now project one or more hikes by the end of September as a global energy shock threatens to lift inflation expectations.
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
MUFG’s Michael Wan expects the Indian Rupee (INR) to remain weak, projecting USD/INR could move towards 98.00 and even 100.00 if the Iran conflict persists. MUFG’s baseline sees USD/INR trading between 95.00 and 96.00, with INR underperformance driven by weak capital inflows, a wider current account deficit, higher Oil prices and potential energy supply disruptions.
Rupee seen underperforming on multiple risks
"We continue to view the Indian Rupee as vulnerable across a range of scenarios on the Strait of Hormuz, with USD/INR likely moving towards 98.00 levels and even 100.00 is in sight if the conflict prolongs or escalates."
"Our expectation assumes a de-escalation and over here our baseline forecasts for USD/INR to trade between 95.00 to 96.00 implies INR weakening further against Asia and G10 FX including EUR, JPY and CNH."
"Overall, our forecast for INR underperformance is driven by a combination of weak capital inflows, a wider current account deficit with higher oil prices, and potential energy supply disruption from a prolonged conflict. Risks from a possible weak Southwest Monsoon and a "Super El-Nino", coupled with uncertainty around further increases in US yields also introduce meaningful left tail risks for INR."
"From a markets perspective we note that both the onshore INR OIS curve and FX forwards are already pricing in a fair amount of risk-premia. For instance, there is already more than 125bps of RBI rate hikes priced over the next 12 months, while 12-month USD/INR FX forwards are a touch below 100 at the time of writing. Nonetheless, until we get better clarity on oil prices and the Strait of Hormuz we think the current environment still favours buying on dips for USD/INR and paying on dips for INR rates in the near-term. Given current pricing we would recommend staying patient rather than chasing levels excessively."
"Overall, we think for these measures to have a durable impact on supporting INR they would need to improve the ease of doing business in India and ultimately improve long-term earnings prospects in India relative to other markets."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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