Forex News
UOB economist Lee Sue Ann highlights that Australia’s GDP growth slowed to 0.3% q/q in 1Q26 as weak public spending, trade drag and cyclone disruptions offset strong business investment. She expects further slowing as restrictive policy weighs on households, with domestic demand remaining the main drag despite some commodity export support.
GDP slowdown underscores domestic fragility
"Australia’s GDP rose 0.3% q/q in 1Q26, slowing from the revised 0.9% q/q expansion recorded in 4Q25 (0.8% q/q previously), reflecting modest household and public sector expenditure as well as cyclone disruptions to mining and export activities."
"Overall, the latest GDP data point to a loss of growth momentum at the start of the year, with domestic demand turning more uneven and external conditions proving less supportive."
"At the same time, the pullback in public spending and weather-related supply disruptions highlight downside risks to near-term activity."
"While external demand, particularly for commodities, should provide some support, domestic demand is expected to remain the key drag on growth."
"External trade was a significant drag on growth."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- GBP/JPY slips on Wednesday as fresh intervention warnings from Tokyo support the Japanese Yen.
- Japan’s PM Sanae Takaichi says authorities stand ready to act in the FX market if needed.
- Buyers remain in control as GBP/JPY holds above key moving averages and RSI stays above the neutral 50 mark.
GBP/JPY edges lower on Wednesday as fresh intervention warnings from Tokyo lift the Japanese Yen (JPY) across the board. At the time of writing, the cross trades around 214.82, down 0.25% on the day.
Japanese authorities are once again on alert as USD/JPY moves back toward the 160.00 mark, a level that previously prompted officials to intervene earlier in April.
Japan’s Prime Minister Sanae Takaichi said on Wednesday that authorities are ready “to take appropriate steps on FX as needed at any time.” Takaichi also said Japan would deepen international cooperation, including with the United States, on foreign exchange moves.
However, the bigger picture still favors further upside in GBP/JPY. The gap between UK and Japanese interest rates remains wide, while renewed hawkish central bank expectations, driven by Oil-related inflation concerns, could further widen the policy gap between the Bank of England (BoE) and the Bank of Japan (BoJ).
Technical indicators also continue to support the bullish outlook, with the cross maintaining a pattern of higher highs and higher lows while holding well above its key long-term moving averages.
Technical Analysis:
On the daily chart, GBP/JPY maintains a constructive bullish bias as it holds above the 100 and 200-day Simple Moving Averages (SMAs). The pair is also trading over the nearby horizontal support around 214.00, while the Relative Strength Index (RSI) hovers near 57 and the Moving Average Convergence Divergence (MACD) stays in positive territory, together suggesting that upside momentum is still intact but not yet overstretched.
On the topside, initial resistance is seen at the horizontal barrier near 216.50, where a clear break would open the way for a continuation of the broader advance. On the downside, the first layer of support emerges around 214.00, with the 100-day SMA at 212.54 and the 200-day SMA near 208.49 providing deeper structural cushions should a pullback develop.
(The technical analysis of this story was written with the help of an AI tool.)
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.28% | 0.28% | -0.02% | 0.23% | 0.43% | 0.74% | 0.41% | |
| EUR | -0.28% | -0.01% | -0.28% | -0.05% | 0.14% | 0.44% | 0.13% | |
| GBP | -0.28% | 0.01% | -0.26% | -0.05% | 0.15% | 0.44% | 0.14% | |
| JPY | 0.02% | 0.28% | 0.26% | 0.22% | 0.42% | 0.69% | 0.40% | |
| CAD | -0.23% | 0.05% | 0.05% | -0.22% | 0.20% | 0.50% | 0.18% | |
| AUD | -0.43% | -0.14% | -0.15% | -0.42% | -0.20% | 0.30% | -0.04% | |
| NZD | -0.74% | -0.44% | -0.44% | -0.69% | -0.50% | -0.30% | -0.30% | |
| CHF | -0.41% | -0.13% | -0.14% | -0.40% | -0.18% | 0.04% | 0.30% |
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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
- Oil prices surge after renewed military tensions involving Iran in the Gulf region.
- Fears of prolonged disruptions to energy flows continue to support the market’s risk premium.
- A larger-than-expected drawdown in US Crude inventories adds further bullish momentum.
West Texas Intermediate (WTI) advances toward $94.00 at the time of writing, up 2.52% on the day, supported by a fresh escalation of geopolitical tensions in the Middle East and growing concerns about global Oil supplies.
Market sentiment deteriorated after the United States (US) Central Command (CENTCOM) reported that Iran had launched ballistic missiles toward Kuwait and Bahrain. According to US authorities, the missiles failed to reach their targets, but American forces responded with retaliatory strikes on Iran’s Qeshm Island. At the same time, Iran’s Foreign Ministry condemned the operation and warned that it reserves the right to respond against any country allowing the use of its territory or airspace for attacks against Iran.
The latest flare-up comes as negotiations between Washington and Tehran continue to send mixed signals. US President Donald Trump stated that talks remain ongoing and that Iran has agreed not to develop a nuclear weapon. However, Iranian media recently reported that communication between the two sides had been suspended for several days, increasing market skepticism about the prospects for a swift diplomatic breakthrough.
Traders fear that a prolonged conflict could further disrupt energy exports passing through the Persian Gulf, a region that plays a critical role in global energy markets. Several analysts believe that the lack of diplomatic progress could force the market to draw more heavily on global Crude inventories, adding further pressure to supply conditions.
According to BNY analyst Bob Savage, war-related and energy-related risks are currently dominating the macroeconomic narrative. He noted that a sustained period with WTI above $90 per barrel could alter expectations for global growth and monetary policy.
The market is also receiving support from the latest US inventory data. The American Petroleum Institute (API) reported that US Crude Oil stockpiles fell by 6.75M barrels in the week ending May 29, compared with a revised decline of 2.8M barrels in the previous week. The drop was significantly larger than the market expectation of a 3.6M drawdown.
Investors now await the official Energy Information Administration (EIA) data later on Wednesday to confirm the continued tightening in US Crude inventories, while geopolitical developments remain the main driver of volatility in the Oil market.
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.
BNY’s Bob Savage highlights that USD/JPY remains close to 160.00 as markets price a high probability of a June BoJ rate hike, yet see Governor Ueda as insufficiently hawkish. Japanese authorities stress G7 agreement on limiting excessive FX volatility and pledge cooperation with the U.S. The report notes USD strength alongside higher U.S. yields, with intervention risk central for USD/JPY.
Authorities warn on Yen volatility
"JPY has held near 160 to the USD, despite comments by the government and the BoJ. Markets are pricing in a 86% chance of a June 16 rate hike in Japan, but Governor Kazuo Ueda’s speech was not seen as hawkish enough. Markets may be underestimating the determination of the BoJ and MoF, as the tilt toward fighting inflation rather than supporting growth stands out."
"BoJ Governor Kazuo Ueda has acknowledged that the situation in the Middle East “has not subsided as quickly as initially expected” and that the central bank may need to keep raising policy rates in response to inflationary pressures. He called the current supply shock during an inflationary period “something the country has not experienced in decades.” However, despite the need to respond to upside price risks, he also stated that the BoJ would need to discuss the pros and cons of a rate hike for the price target, which is a policy debate most central banks are undertaking given the impact on growth of tighter monetary policy."
"Japanese Prime Minister Sanae Takaichi said today that G7 leaders agreed that excessive foreign exchange volatility is harmful to the economy, underscoring the need for close international coordination on currency markets. Takaichi said Japan would work with partners, including the U.S., to deepen cooperation on foreign exchange issues, while stressing the importance of the government’s forex policy in supporting the domestic economy. She also reiterated her commitment to taking “appropriate steps” in response to currency market movements whenever necessary."
"USD/JPY fell in response to the comments, as markets were already nervous about intervention risk as the pair approached the key 160.00 level."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
ING economist James Smith argues that a June Bank of England (BoE) rate hike now appears unlikely as weaker United Kingdom (UK) data and lower Oil prices ease pressure on policymakers. However, he notes that a July move remains possible if energy flows through the Strait of Hormuz fail to improve, with the Bank likely opting for a prolonged pause under its current base case.
BoE seen pausing but July risk
"A June rate rise now looks unlikely amid a fall in oil prices and weaker economic data. Yet a hike in July is possible if energy flows through the Strait of Hormuz don’t materially – and durably – improve over the next 10 weeks."
"Back then, we thought a June hike had become marginally more likely than not. That’s no longer the case."
"Energy markets now sit somewhere between the Bank’s April “scenario A” and “scenario B”. Crucially, most officials judged at the time that neither scenario automatically warranted rate rises."
"That would leave inflation peaking at around 3.7% in September before hovering near 3.5% into next spring – bearing in mind lower household energy bills into the winter will be offset by rising food inflation."
"That’s why we’re not ruling out a July hike if the Strait of Hormuz remains heavily disrupted. And it’s why we’re likely to see a greater number of officials vote for a rate hike later this month."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Standard Chartered economists Dan Pan and Steve Englander note that recent QCEW data validate softer NFP readings in late 2025, when government shutdown effects and DOGE layoffs weighed on employment. They highlight that the new birth-death model and a stabilising economic cycle have narrowed the NFP-QCEW gap, increasing confidence that 2025 and early 2026 labour market data show a firmer footing.
QCEW validation supports softer NFP
"The latest QCEW release confirmed the soft NFP readings in Q4-2025 driven by the government shutdown and DOGE-related deferred resignations."
"The QCEW data showed that employment grew by 1.3% from March to December 2025, slightly higher than NPF growth of 1.2%. This suggests that the overstatement issue in NFP estimates over the past couple of years may have become less of a problem since March 2025."
"Unlike the large downward benchmark revisions in 2023 and 2024, the upcoming preliminary benchmark revision in September may finally validate the NFP estimates in 2025."
"The new birth-death (B-D) model may have helped to better align NFP with the QCEW."
"We now have greater confidence in recent NFP readings given the narrow gap between QCEW and NFP at end-2025. With monthly NFP averaging 76k since the beginning of 2026, the labour market seems to have found a better footing in recent months."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Private sector employment in the United States grew by 122K in May, the Automatic Data Processing (ADP) reported on Wednesday. This print followed the 105K increase recorded in April and came in better than the market expectation of 117K.
Commenting on the report's findings, "Hiring was more broad-based in May than we've seen in the last few years. The labor market continues to show sustained momentum going into the summer hiring season," said Nela Richardson, Chief Economist, ADP.
What does the ADP employment data mean for the US Dollar?
Stronger-than-expected US private sector employment data helps the US Dollar (USD) preserve its strength against its major rivals in the early American session. At the time of press, the USD Index was up 0.16% on the day at 99.38.
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.39% | 0.11% | 0.30% | 0.40% | 0.14% | 1.29% | 1.08% | |
| EUR | -0.39% | -0.29% | -0.09% | 0.01% | -0.25% | 0.92% | 0.72% | |
| GBP | -0.11% | 0.29% | 0.21% | 0.30% | 0.03% | 1.21% | 0.96% | |
| JPY | -0.30% | 0.09% | -0.21% | 0.12% | -0.13% | 1.00% | 0.76% | |
| CAD | -0.40% | -0.01% | -0.30% | -0.12% | -0.28% | 0.88% | 0.66% | |
| AUD | -0.14% | 0.25% | -0.03% | 0.13% | 0.28% | 1.18% | 0.95% | |
| NZD | -1.29% | -0.92% | -1.21% | -1.00% | -0.88% | -1.18% | -0.25% | |
| CHF | -1.08% | -0.72% | -0.96% | -0.76% | -0.66% | -0.95% | 0.25% |
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).
Upbeat labor market conditions suggest that the Federal Reserve (Fed) could remain focused on controlling inflation, with markets now pricing about 60% probability of the US central bank raising the interest rate at least once by the end of 2026.
Combined with the strong safe-haven demand due to the uncertainty surrounding the US-Iran conflict, hawkish Fed expectations continue to support the US Dollar (USD) ahead of this Friday's critical official employment report, which is forecast to show an increase of 85K in Nonfarm Payrolls in May.
Employment FAQs
Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.
The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.
The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.
Rabobank strategist Molly Schwartz notes that Canada has entered a technical recession, with Gross Domestic Product (GDP) contracting for two consecutive quarters and missing expectations. Prime Minister Carney and Bank of Canada (BoC) officials downplay the downturn, while trade tensions and USMCA renegotiation loom. Schwartz stresses that sectoral tariffs and renewed terms with the United States (US) and Mexico will be critical for Canada’s economic outlook.
Technical recession and trade pressures
"While innovation in the US is so hot that the government is now pulling in the reins a bit, officials in Canada are turning a blind eye to sluggish growth."
"Last week it was announced that Canadian GDP shrunk by 0.1% in Q1 of 2026, marking the second consecutive quarter of contraction and signalling a technical recession."
"Bank of Canada Deputy Governor, Carolyn Rogers, has also brushed off the technical recession, saying that we need to “look past technical recession indicators” in favor of more leading economic indicators."
"But for some, the technical recession is a flashing red light, screaming that the current trade situation with the US is unsustainable and it’s time to sit down at the negotiating table."
"Prior to their sit down, LeBlanc sent a letter to both Greer, and Mexico’s economy secretary Ebrard, asking to see the USMCA renewed for another sixteen years, as the USMCA review is currently underway."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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