Forex News
- USD/JPY rises beyond 157.00 amid higher Oil prices.
- Trump's refusal of Iran's peace proposal has curbed hopes of Hormuz reopening.
- Ongoing risks of a Tokyo intervention are likely to keep US Dollar rallies limited.
The US Dollar (USD) appreciates against the Japanese Yen (JPY) on Monday, retracing Friday’s losses and returning to levels above 157.00 at the time of writing. The jump in Oil prices after US President Donald Trump’s rejection of Iran’s peace proposal is underpinning the US Dollar’s recovery, with risks of a Tokyo intervention still alive.
Trump posted on social media that Tehran’s response to the US peace proposal is “totally unacceptable”, which has crushed hopes of a swift end to the war and pushed back expectations of a prompt reopening of the Strait of Hormuz. Oil prices rallied after the news, with the WTI barrel appreciating about $3 to $94.50 and Brent Oil returning above the key $100 level.
On Friday, US Nonfarm Payrolls data revealed that the economy created almost twice the 62K jobs expected, with a 115K increase in April. This shows some stabilisation of the labour market and eases pressure on the Federal Reserve to cut rates anytime soon. Considering the hot inflationary pressures, these figures back the claims of Fed hawkish dissenters and provides suppor to the US Dollar.
The Japanese Yen's sellers, however, are likely to remain cautious, as the risks of a Tokyo intervention remain high after several alleged interventions in the last two weeks. Reports from Reuters suggest that the Japanese Ministry of Finance might have spent nearly JPY 10 trillion (USD 63.7 billion) in several interventions since the first one, which allegedly took place on April 28.
US Treasury Secretary Scott Bessent is planning to visit Tokyo next week, where he will discuss the Japanese Yen weakness, and Tokyo authorities will look for US support to fight speculative moves. This is likely to keep JPY bears on edge.
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.
- AUD/JPY trades around 113.70 on Monday, supported by expectations of further rate hikes in Australia.
- Markets expect the Australian policy rate to reach 4.7% by the end of 2026, with no cuts anticipated before 2028.
- Fears of intervention by Japanese authorities continue to limit the pair’s upside potential.
AUD/JPY posts modest gains around 113.70 on Monday, up 0.13% on the day at the time of writing. The Australian Dollar (AUD) remains supported by the hawkish tone adopted by the Reserve Bank of Australia (RBA), while the Japanese Yen (JPY) stays under pressure amid rising Oil prices and concerns over Japan’s economic outlook.
The Australian central bank raised its policy rate to 4.35% last week, returning to its December 2024 peak. This marks the third consecutive rate hike this year as inflation remains elevated in Australia. The RBA noted that geopolitical tensions in the Middle East continue to push energy and commodity prices higher, reinforcing inflationary pressures.
The central bank’s projections now suggest the policy rate could reach 4.7% by the end of the year, with no rate cuts expected until 2028. HSBC also noted that the Australian Dollar has been among the best-performing G10 currencies this quarter, supported both by improving global risk sentiment and the RBA’s more restrictive monetary policy stance.
The Australian Dollar is also benefiting from positive expectations surrounding United States (US) President Donald Trump’s visit to China from May 13 to May 15. Discussions with Chinese President Xi Jinping are expected to focus on several sensitive topics, including Middle East tensions, Taiwan, artificial intelligence and critical minerals. Any signs of easing tensions between Washington and Beijing could further support the Australian currency, given Australia’s heavy reliance on exports to China.
Additionally, the latest Chinese economic data strengthened the positive sentiment around the Aussie. China’s Consumer Price Index (CPI) rose 1.2% YoY in April, above market expectations of 0.8%, while the Producer Price Index (PPI) jumped 2.8%, also beating forecasts.
On the Japanese side, the JPY remains pressured by rising Oil prices. West Texas Intermediate (WTI) trades around $95 after Donald Trump rejected Iran’s demands regarding the Strait of Hormuz. Japan’s dependence on energy imports leaves the Japanese currency particularly vulnerable to higher energy costs.
However, the Japanese Yen’s downside could remain limited due to intervention risks from Japanese authorities. Reports published last week indicated that Tokyo intervened again in the foreign exchange market during Golden Week, for an estimated amount between ¥4 trillion and ¥5 trillion. Japan’s top foreign exchange official, Atsushi Mimura, stated that further interventions remain possible if necessary.
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 | 0.17% | 0.26% | 0.31% | -0.04% | 0.12% | 0.39% | 0.32% | |
| EUR | -0.17% | 0.09% | 0.11% | -0.24% | -0.04% | 0.23% | 0.15% | |
| GBP | -0.26% | -0.09% | 0.02% | -0.32% | -0.13% | 0.14% | 0.05% | |
| JPY | -0.31% | -0.11% | -0.02% | -0.35% | -0.15% | 0.10% | 0.01% | |
| CAD | 0.04% | 0.24% | 0.32% | 0.35% | 0.20% | 0.40% | 0.36% | |
| AUD | -0.12% | 0.04% | 0.13% | 0.15% | -0.20% | 0.25% | 0.18% | |
| NZD | -0.39% | -0.23% | -0.14% | -0.10% | -0.40% | -0.25% | -0.06% | |
| CHF | -0.32% | -0.15% | -0.05% | -0.01% | -0.36% | -0.18% | 0.06% |
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).
ING’s Chris Turner notes Sterling is softening after UK local elections, as Labour’s losses fuel talk of a leadership contest and a leftward policy shift. He highlights the risk of developments around Manchester Mayor Andy Burnham re-entering parliament. Turner says markets will focus on Prime Minister Keir Starmer’s policy speech and expects EUR/GBP to revisit the overnight high at 0.8675.
Sterling pressured by Labour uncertainty
"Sterling is softening a little as markets digest the fall-out from local UK elections held late last week. While Labour losses were not quite as bad as feared, they have failed to quell speculation over a Labour leadership contest and a clear leftward drift in government policy."
"Manchester Mayor Andy Burnham remains waiting in the wings and the markets will react to any news such as Burnham resigning as mayor or a sitting Labour MP resigning to make way for Burnham's return to parliament."
"The key focus this morning will be a policy speech from PM Keir Starmer on how he plans to address Labour's falling popularity and take the party into the next election. The wild card here is how far he intends to embrace a return to Europe, whether that be rejoining the customs union or more controversially, the single market. "
"It will be tough for Starmer to win over his critics, and we suspect EUR/GBP finds its way back to the overnight high at 0.8675."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Deutsche Bank’s Jim Reid and team say markets are digesting a firm US payrolls report that reinforced views of a resilient labour market and persistent inflation risks. They highlight a dense United States (US) data calendar, led by April Consumer Price Index (CPI), Producer Price Index (PPI), retail sales and industrial production, which will shape expectations for the US Dollar (USD) and US yields over coming days.
US data and inflation in focus
"Before that, the new week arrives with markets still processing last Friday’s US payrolls report, which came in broadly firm and reinforced the view that labour market conditions remain resilient."
"While not strong enough to decisively alter the policy outlook, the release did little to ease concerns that underlying inflation pressures could persist, especially given still-solid wage dynamics."
"Against this backdrop, outside of the Iran War developments which will of course take centre stage, the coming week will remain centred on the US, with a dense run of data and policy developments."
"The focal point will be tomorrow’s April CPI report."
"Our economists expect headline inflation to rise by +0.58% month-on-month, moderating from March’s +0.9%, but still relatively firm."
"In contrast, the core measure is projected to accelerate to +0.39% MoM from +0.2%, suggesting underlying price pressures remain sticky even as energy-related effects fade."
"The YoY rates would move from 3.3% to 3.8% for the former and from 2.6% to 2.8% for the latter."
"Producer price data follows on Wednesday and then the remainder of the week shifts towards activity indicators."
"Our economists expect retail sales to decline by -0.3% MoM after March’s strong +1.7% increase, pointing to some payback in consumer spending."
"Meanwhile, industrial production is forecast to rise modestly by +0.2% MoM following a -0.5% drop previously, suggesting a tentative stabilisation in manufacturing output."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Silver prices (XAG/USD) broadly unchanged on Monday, according to FXStreet data. Silver trades at $80.29 per troy ounce, broadly unchanged 0.08% from the $80.35 it cost on Friday.
Silver prices have increased by 12.95% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 80.29 |
1 Gram | 2.58 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 58.13 on Monday, down from 58.69 on Friday.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
(An automation tool was used in creating this post.)
- GBP/USD attracts fresh buyers following a modest bearish gap down opening to mid-1.3500s.
- Easing UK political risks and the BoE’s hawkish signal underpin the GBP, supporting spot prices.
- Iran tensions and reviving Fed rate hike bets benefit the safe-haven USD and might cap the pair.
The GBP/USD pair fills a major part of its weekly bearish gap opening on Monday and is now looking to extend the momentum further beyond the 1.3600 mark. Spot prices, however, remain below the 1.3635 horizontal resistance and the highest level since February 16, touched earlier this month, warranting caution for bullish traders amid a modest US Dollar (USD) strength.
Against the backdrop of renewed hostilities in the Strait of Hormuz, disagreements over Tehran's nuclear program dampen bets for a US-Iran peace deal. US President Donald Trump and Iran both rejected each other’s peace proposals for ending the war and the gradual reopening of the Strait of Hormuz. This keeps geopolitical risks in play, which, along with hawkish US Federal Reserve (Fed) expectations, turn out to be key factors underpinning the safe-haven USD.
The US-Iran standoff triggers a fresh leg up in Crude Oil prices, fueling inflationary concerns and keeping hopes alive for at least one 25-basis-point (bps) rate hike by the US central bank in 2026. In fact, the CME Group's FedWatch Tool indicates a nearly 20% chance that the Fed will raise borrowing costs by the end of this year. That said, easing UK political uncertainty underpins the British Pound (GBP) and might continue to act as a tailwind for the GBP/USD pair.
In fact, UK Prime Minister Keir Starmer said he would not resign after local election results in Britain confirmed expectations of significant losses for the ruling Labour Party. Furthermore, the Bank of England's (BoE) signal last week that rate hikes could be appropriate if inflation remains persistent turns out to be another factor lending some support to the GBP and contributes to the GBP/USD pair's goodish intraday move up from the 1.3550 horizontal support zone.
The BoE's MPC member Megan Greene said earlier today that the central bank needs to wait to see how Middle East conflicts will flare before making any monetary policy adjustments, and that Inflation risks are skewed entirely to the upside. This, in turn, backs the case for a further appreciating move for the GBP/USD pair, though traders might opt to wait for the release of the latest US consumer inflation figures on Tuesday and the Trump-Xi summit later this week.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
OCBC’s Christopher Wong says British Pound (GBP) has held up despite UK political noise, with local elections pointing to a more fragmented landscape and a medium-term political-risk premium. He sees GBP trading with a modest political-risk discount near term, but driven mainly by US Dollar (USD) direction and Bank of England (BoE) repricing, with technicals showing mixed signals and key resistance around 1.37.
Sterling balances politics and rate repricing
"UK local election results pointed to a more fragmented political landscape. Labour took heavy losses, Reform UK was the standout winner in English councils, the Conservatives also remained under pressure, while the Greens/Lib Dems picked up support in parts of the country. In Wales, Plaid Cymru’s win ended Labour’s long dominance, with Reform also performing strongly."
"For GBP, the immediate damage looks contained as there is no clear leadership or fiscal shock yet. But the results do add to the medium term political risk premium, especially if poor Labour showing revive concerns over fiscal slippage. In the interim, GBP is likely to trade with a modest political-risk discount, but the bigger drivers remain USD direction and BoE repricing."
"GBP traded better bid for the week. Last at 1.3630 levels. Weekly momentum is mild bullish while RSI rose slightly. Technical readings are mixed with momentum/oscillator indicating upside risk while chart pattern saw a potential hanging man formation, typically associated with bearish reversal."
"We continue to watch price action. Resistance at 1.37 levels (76.4% fibo retracement of 2026 high to low). Support at 1.3540 (21 DMA), 1.3510 (50% fibo) and 1.3480. "
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Iran's foreign ministry spokesperson Esmaeil Baghaei said during the European trading session on Monday that the proposal to the United States (US) was not “excessive”, and Washington continues to have “unreasonable demands”.
Iran's Baghaei added that Tehran only seeks to secure its rights and gave generous and responsible suggestions to the US.
These comments from Iran’s Baghaei seem a reply to US President Donald Trump’s social media post on Truth Social, which came over the weekend, in which he called the response from Iran’s so-called Representatives “totally unacceptable”.
According to Iranian state media, Iran's counterproposal stresses US compensation for war damages, the recognition of Tehran’s authority on the Strait of Hormuz, a vital passage to almost 20% of global energy supply, CNN reported. Iran’s proposal also demands the release of frozen Iranian assets and the lifting of sanctions.
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.
Bank of England (BoE) Monetary Policy Committee (MPC) member Megan Greene said during the European trading session on Monday that the central bank needs to wait to see how Middle East conflicts will flare before making any monetary policy adjustments.
Comments
It's worth waiting to see how the US-Iran war develops before deciding whether to hike interest rates.
Inflation risks are skewed entirely to the upside.
Sluggish economy and loose labour market should limit second-round effects from energy shock.
Market reaction
No immediate response appears on the British Pound (GBP) due to BoE's Greene. The reason might be that they lack any meaningful guidance on the monetary policy outlook. As of writing, GBP/USD is down 0.17% to near 1.3610 but has recovered a majority of its early losses.
BoE FAQs
The Bank of England (BoE) decides monetary policy for the United Kingdom. Its primary goal is to achieve ‘price stability’, or a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).
When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls below target, it is a sign economic growth is slowing, and the BoE will consider lowering interest rates to cheapen credit in the hope businesses will borrow to invest in growth-generating projects – a negative for the Pound Sterling.
In extreme situations, the Bank of England can enact a policy called Quantitative Easing (QE). QE is the process by which the BoE substantially increases the flow of credit in a stuck financial system. QE is a last resort policy when lowering interest rates will not achieve the necessary result. The process of QE involves the BoE printing money to buy assets – usually government or AAA-rated corporate bonds – from banks and other financial institutions. QE usually results in a weaker Pound Sterling.
Quantitative tightening (QT) is the reverse of QE, enacted when the economy is strengthening and inflation starts rising. Whilst in QE the Bank of England (BoE) purchases government and corporate bonds from financial institutions to encourage them to lend; in QT, the BoE stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive for the Pound Sterling.
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
