Forex News
- AUD/JPY holds steady near 111.45 in Tuesday’s early European session.
- The cross keeps the positive vibe above the key 100-day EMA, with bullish RSI momentum.
- The immediate resistance level emerges at 111.90; the first downside target to watch is 109.80.
The AUD/JPY cross trades on a flat note around 111.45 during the early European session on Tuesday. Hawkish rhetoric from the Reserve Bank of Australia (RBA) could provide some support to the Australian Dollar (AUD) against the Japanese Yen (JPY).
RBA Governor Michele Bullock said on Tuesday that a rate hike is possible in March if the policy-making board decides inflation expectations are at risk of becoming unanchored, and markets should be aware of that. Markets have priced in nearly a 30% chance of a quarter-point rise at the March meeting, while fully pricing a tightening for May, according to Reuters.
On the other hand, fears of a prolonged conflict in the Middle East could boost safe-haven currencies such as the JPY and act as a headwind for the cross. US military officials said on Tuesday that they have destroyed command posts of Iran’s Revolutionary Guards as well as Iranian air defense and missile launch sites since the start of the joint Israeli-US offensive on Saturday.
Technical Analysis:
In the daily chart, the near-term bias of AUD/JPY is bullish as price holds well above the rising 100-day exponential moving average near 105.10, confirming an established uptrend. The latest candle sits just under the upper Bollinger Band around 111.93, showing strong upside pressure with volatility expanding as the bands widen. RSI at 66.81 stays above its midline and out of overbought territory, indicating firm yet not exhausted bullish momentum and favoring continuation rather than immediate mean reversion.
Initial resistance emerges at the recent upper Bollinger Band area near 111.90, and a clear break above this zone would expose the next psychological barrier at 112.50. On the downside, first support aligns with the Bollinger middle band and prior congestion around 109.80, followed by stronger demand at the 107.70–108.00 region, where the lower band began to flatten on the last pullback. A deeper correction toward the 105.00–105.10 area would bring price into contact with the rising 100-day EMA, which protects the broader bullish structure as long as it holds.
(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.
- Gold meets with a fresh supply on Tuesday amid some follow-through USD buying.
- Rising geopolitical tensions in the Middle East could offer support to the commodity.
- The overnight failure to find acceptance above $5,400 also warrants caution for bulls.
Gold (XAU/USD) attracts some intraday selling on Tuesday and falls around $100 from the daily top, around the $5,380 area. The US Dollar (USD) climbs to a fresh high since January 20 and turns out to be a key factor exerting downward pressure on the commodity. However, concerns about a broader regional conflict in the Middle East continue to weigh on investors' sentiment and underpin demand for the traditional safe-haven bullion.
Rising geopolitical tensions continue to benefit the USD's status as the global reserve currency. Adding to this, reduced bets for aggressive easing by the Federal Reserve (Fed) further undermines the USD and contributes to the intraday selling around the the non-yielding Gold.
Meanwhile, Iran continues to fire missiles and drones at several Persian Gulf countries. A drone strike that hit the US Embassy in Saudi Arabia’s capital, Riyadh, marked a further escalation of the conflict. Moreover, Iran's Revolutionary Guard Corps (IRGC) Navy effectively declared the closure of the Strait of Hormuz and announced that no vessels are permitted to cross the critical maritime chokepoint.
US Secretary of State Marco Rubio stated that the US is preparing for a major uptick in attacks in Iran over the next 24 hours. This comes after US President Donald Trump said that a big wave is yet to come, underscoring the risk of a prolonged war. Furthermore, the State Department urged US citizens to depart immediately from countries in the Middle East due to serious safety risks.
This, in turn, could help limit deeper losses for the safe-haven Gold. In the absence of any relevant US macro data, the market focus will remain glued to developments surrounding the Iran war. The price action, however, warrants caution before positioning for a further appreciating move.
XAU/USD 1-hour chart
Gold could aim to test 100-hour SMA support near $5,240
Last week's breakout above the $5,200 horizontal barrier was seen as a key trigger for the XAU/USD bulls. Moreover, the Gold price holds well above the rising 100-period Simple Moving Average (SMA), keeping the broader uptrend intact despite the recent volatility.
Meanwhile, the Relative Strength Index (RSI) around 59 stays above the midline without reaching overbought conditions, reinforcing a modest upside skew rather than an extended rally. Furthermore, the Moving Average Convergence Divergence (MACD) line remains below the signal line and in positive territory, with the negative histogram shrinking, which suggests fading downside momentum within a still-upward structure.
Hence, a subsequent move up could face initial resistance at the recent high around $5,390, followed by a more significant barrier at $5,410, where prior rejection coincided with stretched intraday momentum. A sustained move above $5,410 would open the way toward the $5,450 region, while failure to clear $5,390 would keep the metal consolidating within the current intraday range.
On the flip side, immediate support emerges at $5,340, with a break exposing the next downside level at $5,320, ahead of stronger backing from the 100-period SMA near $5,230. A deeper pullback would target $5,300 as an intermediate floor.
(The technical analysis of this story was written with the help of an AI tool.)
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.
- The Pound Sterling underperforms its major peers amid the war between the US, Israel, and Iran.
- Dovish BoE expectations have diminished amid surging oil prices.
- Investors await the US NFP data for fresh cues on the Fed’s monetary policy outlook.
The Pound Sterling (GBP) trades lower against its major currency peers, slides 0.3% to near 1.3360 against the US Dollar (USD) during the European trading session on Tuesday. The GBP/USD pair tumbles as risk-off market sentiment is prompted due to the war in the Middle East between the United States (US), Israel, and Iran, which has dampened the demand for riskier assets.
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.21% | 0.35% | -0.03% | 0.03% | 0.04% | 0.31% | 0.22% | |
| EUR | -0.21% | 0.15% | -0.26% | -0.18% | -0.17% | 0.09% | 0.00% | |
| GBP | -0.35% | -0.15% | -0.38% | -0.31% | -0.31% | -0.04% | -0.13% | |
| JPY | 0.03% | 0.26% | 0.38% | 0.08% | 0.09% | 0.34% | 0.26% | |
| CAD | -0.03% | 0.18% | 0.31% | -0.08% | 0.00% | 0.27% | 0.17% | |
| AUD | -0.04% | 0.17% | 0.31% | -0.09% | -0.01% | 0.26% | 0.17% | |
| NZD | -0.31% | -0.09% | 0.04% | -0.34% | -0.27% | -0.26% | -0.09% | |
| CHF | -0.22% | -0.00% | 0.13% | -0.26% | -0.17% | -0.17% | 0.09% |
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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Soaring energy prices due to conflicts in the Middle East have inspired fears of rising inflation in the United Kingdom (UK), a scenario that could diminish overall household spending.
In response to the war situation, Bank of England (BoE) Monetary Policy Committee (MPC) member Alan Taylor said in a conference hosted by Norway's central bank on Monday that it is too soon to ascertain the impact of rising oil prices on the UK inflation and growth outlook; however, the central bank is closely tracking the event, Reuters reported.
Fears of accelerating price pressures in the UK economy amid surging oil prices have forced traders to trim dovish BoE expectations. Traders now see less than a 50% chance of a BoE rate cut in March, compared to nearly 80% before markets opened on Monday, Reuters reports.
Meanwhile, the US Dollar (USD) trades firmly as its safe-haven demand has increased amid the US-Iran war. During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades firmly near its almost six-week high around 98.75.
Going forward, investors will focus on the US Nonfarm Payrolls (NFP) data for February, which will be released on Friday. Investors will pay close attention to the US employment data to get fresh cues on the Federal Reserve’s (Fed) monetary policy outlook.
Rabobank strategist Molly Schwartz highlights that the US Dollar’s strong performance reflects renewed safe-haven demand as geopolitical risks escalate around Iran. She argues prior “Sell America” calls were driven by positioning and EUR/USD repricing rather than a loss of Dollar safe-haven status. Rising US Treasury yields underscore concerns that war-related energy shocks could complicate the Federal Reserve’s inflation challenge.
Greenback benefits from renewed risk aversion
"Yesterday’s stellar performance of USD also exemplified how calls of “Sell America” in recent months were shortsighted."
"While USD has not been behaving as a safe-haven traditionally would, given the dramatic USD sell-off in H1 2025, we have long argued that this was more about positioning—a repricing of EUR/USD in the aftermath of European announcement of defense spending, and rising USD hedge ratios from foreign investors—than it was a loss of USD’s safe haven status."
"Indeed, recent price action makes it clear that when the going gets rough, investors still flee to the warm embrace of greenback liquidity."
"While inflation is already above the 2% target, and the lagged effects of tariffs are starting to put pressure on core goods, the additional price increases posed by turning the major oil exporter of the world into a warzone may put the Fed in a tricky position."
"US 2 year and 10 year Treasury yields moved in parallel, closing the day up 11bp, which is the greatest single day move since the US-Iranian skirmish last June."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Asian equities trade mostly lower on Tuesday as traders remain concerned about the rising tensions in the Middle East. South Korean stocks, the benchmark Kospi, sank as much as 6.9%, the most since August 2024, amid risk-off sentiment. The Nikkei 225, Japan’s benchmark, fell 3.15% to 56,222.
The United States (US) and Israel targeted Iran's top-tier leadership and nuclear infrastructure over the weekend. US President Donald Trump said on Monday that combat operations will continue in Iran until America’s objectives are met.
Iran has launched retaliatory missile and drone strikes against Qatar, the UAE, Kuwait and the US Embassy in Riyadh, Saudi Arabia. US President Donald Trump said on Tuesday that people will find out soon what the retaliation will be to an attack on the US embassy in Riyadh and over the deaths of US military personnel during the Iran conflict.
China's stock markets also face some selling pressure on Tuesday, with the SHANGHAI, China’s main stock market index, declining 0.91% to 4,145. Meanwhile, the Shenzhen stock exchange fell 2.25% to 14,138. The Hong Kong Stock Exchange tumbles 0.87% to 25,835.
AsianStocks 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.
Commerzbank analysts Charlie Lay and Moses Lim note Brent crude has surged toward USD79–80 as shipping through the Strait of Hormuz is effectively halted, disrupting Oil and LNG flows. They argue that if the Middle East war drags on for months, eurozone inflation could rise by at least 1 percentage point and growth fall by a few tenths, though they assume a shorter conflict.
Hormuz disruption and eurozone impact
"Brent crude oil surged toward USD79–80 per barrel after shipping through the Strait of Hormuz, the world’s most critical oil chokepoint, was effectively halted following Iranian threats to attack vessels attempting passage."
"The disruption has also affected liquefied natural gas (LNG) shipments, with exports temporarily halted, raising energy prices."
"If, on the other hand, the war were to drag on for several months, inflation in the eurozone would probably rise by at least 1 percentage point and economic growth would be a few tenths of a percentage point lower which would be painful."
"The price of oil has jumped again today by more than 5 US Dollar per barrel to just under 80 USD."
"However, according to futures markets, the oil price is likely to fall significantly again in the summer."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- The Oil price jumps to near $$73.00 as the closure of the Strait of Hormuz prompts global supply risks.
- Iran warns of firing any ship trying to pass from Strait of Hormuz amid war with the US and Israel.
- Dovish Fed speculation has eased amid rising US factory-level inflation.
West Texas Intermediate (WTI), futures on NYMEX, trades 2.3% higher to near $73.00 during the early European trading session on Tuesday. The oil price strengthens as the closure of the Strait of Hormuz, a sea route from which 20% of global crude oil is shipped, has disrupted the global oil supply mechanism.
On late Monday, an Iranian Revolutionary Guard announced that the Strait of Hormuz had been closed and their military groups would fire on any ship trying to pass, Reuters reported.
Tehran has tightened its military activities near the Strait of Hormuz as part of its retaliation against the United States (US) for launching a series of aerial attacks and killing several of its top leaders, including Supreme Leader Ayatollah Ali Khamenei.
Meanwhile, US military forces have announced that they have destroyed command posts of Iran’s Revolutionary Guards (IRG) as well as Iranian air defense and missile launch sites, a move that has cripped Tehran’s attacking capability and could force the nation to call for a truce soon.
Going forward, fading dovish Federal Reserve (Fed) expectations for the June policy meeting could prompt concerns over the oil demand outlook in the near term.
According to the CME FedWatch tool, the probability of the Fed holding interest rates steady in the June policy meeting has increased to 53.5% from 42.7% seen on Friday.
Dovish Fed bets have squeezed after the release of the US ISM Manufacturing PMI report on Monday, which showed that its sub-component Prices Paid, a key measure of factory-level inflation, soared to 70.5 against estimates of 59.5 and the previous reading of 59.0.
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.
US military officials said on Tuesday that they have destroyed command posts of Iran’s Revolutionary Guards as well as Iranian air defense and missile launch sites since the start of the joint Israeli-US offensive on Saturday.
"US forces have destroyed Islamic Revolutionary Guard Corps command and control facilities, Iranian air defense capabilities, missile and drone launch sites, and military airfields during sustained operations. We will continue to take decisive action against imminent threats posed by the Iranian regime,” said US Central Command.
Market reaction
At the time of writing, the Gold price (XAU/USD) is trading 0.24% higher on the day to trade at $5,345. Meanwhile, the West Texas Intermediate (WTI) is up 2.01% on the day at $72.75.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
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