Forex News
ING’s James Knightley notes that expectations for Federal Reserve easing in 2026 have been reduced as higher near-term US inflation and resilient growth make early rate cuts less likely. ING now sees the Fed cutting in September and December, while upcoming CPI, PCE and GDP data will shape how far markets continue to price out Dollar-negative policy easing.
Fed path repriced with data focus
"Expectations for how far the Fed will cut the policy rate in 2026 have moved from 60bp ahead of the military operations in Iran to 40bp currently. Higher near-term inflation in an environment of economic resilience does indeed make near-term rate cuts look less probable. We have pushed back the timing of when we see the Fed cutting rates from June and September to September and December. While higher energy costs are inflationary, it also puts more pressure on consumer finances and can ultimately be demand destructive, which will push core inflation pressures lower over the medium to longer term."
"Feb CPI (Wed): We're above consensus for CPI and that might nudge the market further into pricing out the possibility of rate cuts. Energy prices are the focus right now for markets, but that will be a March CPI story. Instead, we still see some lingering upward pressure from tariffs on goods prices within the February print. We will also see the January core PCE deflator, which, given the January PPI and CPI reports, points to a 0.4% increase, but this is obviously a month behind next week's CPI data, so it should not be as impactful."
"4Q GDP revisions (Fri): Likely to show little change from the initially reported 1.4% annualised print. While consumer spending and business capex were firm, it was the federal government spending side that held growth back due to the six-week-long government shutdown. Also, watch the trade balance. Imports are rising strongly again and this will be a drag on 1Q growth. It also implies more tariff revenues that we still suspect will add to price pressures in the economy."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- GBP/USD remains range-bound, heading for a third consecutive weekly loss.
- Weak US NFP fails to dent the US Dollar as safe-haven demand persists.
- Markets scale back Fed and BoE rate-cut expectations.
The British Pound (GBP) struggles for direction against the US Dollar (USD) on Friday, with GBP/USD consolidating after a short-lived spike following weaker-than-expected US labor market data. At the time of writing, the pair is trading around 1.3362, on course for a third straight weekly decline.
Despite the disappointing data, the figures did little to weaken the USD, as investors continued to favor the Greenback as a safe-haven asset amid the ongoing conflict between the United States and Iran.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is trading around 99.10, up nearly 1.50% so far this week.
The US Nonfarm Payrolls (NFP) report showed employment fell by 92K in February, sharply missing expectations for a 59K increase. Meanwhile, January’s reading was revised lower to 126K from 130K. The Unemployment Rate edged higher to 4.4% from 4.3%.
The weak US jobs data was largely overshadowed by escalating geopolitical tensions in the Middle East as traders weigh the potential inflationary impact of rising Oil prices.
As inflation risks mount, traders are growing increasingly cautious that central banks may need to keep interest rates higher for longer, tempering hopes for near-term rate cuts.
Markets now price only a 20-30% chance of a 25 bps Bank of England (BoE) interest rate cut in March, down from around 80% before the conflict. The repricing is lending modest support to the Pound, limiting follow-through selling in GBP/USD.
Meanwhile, traders have also trimmed expectations for Federal Reserve (Fed) rate cuts, according to the CME FedWatch Tool. Markets are now nearly certain that the Fed will keep interest rates on hold at its March meeting, while the probability of a June rate cut has fallen to around 35% from roughly 45% a week ago.
San Francisco Fed President Mary Daly warned that risks are emerging on both sides of the Fed’s mandate, noting that the “job market is vulnerable.” She emphasized that policymakers need to remain patient, saying the Fed must “be steady in the boat while we collect more information.” Daly added that whether rising Oil prices delay rate cuts will depend on “how long the disruption lasts.”
Traders also digested the latest US Retail Sales data. Retail Sales declined 0.2% MoM in January, compared with expectations for a 0.3% drop, following a flat reading in December. The Retail Sales Control Group, which feeds directly into GDP calculations, rose 0.3%, while Retail Sales excluding Autos remained unchanged at 0%.
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
Commerzbank Senior Economist Dr. Christoph Balz notes that US employment fell by 92,000 in February, far below expectations, with revisions also lowering prior months. He highlights possible distortions from a strike and cold weather. Balz expects the US Federal Reserve to keep interest rates unchanged at upcoming meetings as it waits for clearer labor market and inflation signals.
Weak jobs data delays Fed action
"The US employment report was a big letdown in February, with 92,000 jobs lost. But some one-off factors, like a strike and the cold snap, might have played a role. That makes it harder to interpret the numbers."
"In addition, revisions pushed data for earlier months down by a combined 69,000. The unemployment rate is now 4.4% after 4.3%. Average hourly earnings rose by 0.4% in February compared with the previous month and by 3.8% compared with the previous year. In January, the year-on-year rate was 3.7%."
"Today's data is likely to trigger renewed concerns about the labor market at the US Federal Reserve. However, due to possible one-off factors and in view of the fluctuations in recent months, the Fed will interpret the figures with caution and wait for further reports before adjusting its assessments."
"The unclear impact of the Iran war, especially on inflation, also argues in favor of a wait-and-see approach."
"The last two meetings of the Powell era this month and at the end of April are likely to proceed without any interest rate changes. However, the Fed may soon face some difficult decisions in view of the downside risks in the labor market and increasing inflationary pressures."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
ING’s Commodities Strategist Ewa Manthey highlights that escalating conflict in the Middle East adds significant upside risk to Aluminium in an already tightening market. With Gulf smelting capacity heavily reliant on the Strait of Hormuz, ING revises its Aluminium price forecasts higher and outlines three disruption scenarios, including a severe case where prices briefly exceed $4,000/t before demand destruction curbs gains.
Middle East tensions tighten aluminium outlook
"While oil and LNG markets are the most directly exposed to disruptions in the Strait of Hormuz, aluminium is likely to be among the most affected industrial commodities. The Gulf accounts for roughly 9% of global aluminium production and an even larger share of internationally traded metal. Yet the region produces only around 3% of global alumina and around 1% of bauxite, leaving smelters heavily reliant on imported raw materials."
"In Scenario 1, which we consider our base case, we assume a relatively short disruption to regional shipping lasting around four weeks. Exports from Gulf producers are temporarily delayed and some metal accumulates on site, particularly at Alba where deliveries have already been affected. At the same time, the disruption at Qatalum represents a genuine supply shock as production recovers only gradually following a controlled shutdown."
"In Scenario 2, disruptions persist for longer, with shipping constraints lasting several months. This would further tighten the seaborne aluminium market as export flows from the Gulf remain constrained. In this scenario, we also assume the risk of minor production curtailments across Gulf smelters if logistics disruptions persist and raw material deliveries begin to tighten."
"Scenario 3 represents a more severe disruption to shipping through the Strait of Hormuz lasting around three months. In this case, a combination of lost production, stranded metal and broader logistics disruptions could significantly tighten global aluminium availability. At these levels of tightening, prices could briefly move above $4,000/t before demand destruction begins to limit further upside."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Mary Daly, President of the Federal Reserve (Fed) Bank of San Francisco, said that a month of data isn’t decisive, adding that inflation is above target right now, balancing risks of calculation at an interview with CNBC on Friday.
Key takeaways:
No one month of data is decisional.
Both goals are risks now.
You need to average the two payrolls reports.
Job numbers not a clear read, but also not a wrong read.
Job market is vulnerable.
Very different from when inflation is below target.
Right now inflation is above target, it's a balance of risks calculation.
Hoped last year's rate cuts would put a floor under job market, but this report has my attention.
With oil price increase, the question is how long will that last.
Can't look through this report, but it's just one month of data.
If break-even is 30K, we are below that, but it's only a couple months of data.
Wages need to be inflation plus productivity growth, which is higher.
This wage growth is not a sign of frothiness.
Worried labor market is weaker than we have seen.
Two-sided risks.
Oil price shock is a real thing, consumers will feel that.
Labor market gives me some concern, but strikes, snow, population benchmarking make report harder to interpret.
Asked if oil price rise would stay Fed's hand on cuts, says it depends on how long disruption lasts.
Need more time to decide.
A little optimistic that AI will help drive productivity, but need to see it.
Another policy alternative is to hold rates steady.
Not in a position to think we should hike.
There is a real issue if we should act immediately on labor market, or wait.
We have to be steady in the boat while we collect more information.
Have not seen evidence economy is running hot.”
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.49% | 0.22% | 0.28% | -0.04% | 0.41% | 0.62% | 0.12% | |
| EUR | -0.49% | -0.27% | -0.20% | -0.53% | -0.07% | 0.13% | -0.37% | |
| GBP | -0.22% | 0.27% | 0.06% | -0.25% | 0.21% | 0.41% | -0.09% | |
| JPY | -0.28% | 0.20% | -0.06% | -0.32% | 0.12% | 0.31% | -0.17% | |
| CAD | 0.04% | 0.53% | 0.25% | 0.32% | 0.45% | 0.65% | 0.16% | |
| AUD | -0.41% | 0.07% | -0.21% | -0.12% | -0.45% | 0.20% | -0.33% | |
| NZD | -0.62% | -0.13% | -0.41% | -0.31% | -0.65% | -0.20% | -0.50% | |
| CHF | -0.12% | 0.37% | 0.09% | 0.17% | -0.16% | 0.33% | 0.50% |
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).
- EUR/USD falls on Friday despite weak US labor market data showing a sharp contraction in February employment.
- The NFP report reveals a loss of 92K jobs in February, far below expectations for a 59K increase, while the Unemployment Rate rises to 4.4%.
- Safe-haven demand for the US Dollar persists amid geopolitical tensions, helping the Greenback recover and pushing the pair lower.
EUR/USD trades around 1.1560 on Friday at the time of writing, down 0.40% on the day after briefly rebounding toward 1.1590 following the release of the latest United States (US) labor market data.
The Nonfarm Payrolls (NFP) report published by the US Bureau of Labor Statistics showed that employment declined by 92K jobs in February, sharply missing expectations for an increase of 59K. The previous month’s figure was also revised slightly lower to 126K. At the same time, the Unemployment Rate rose to 4.4% from 4.3%, while the Labor Force Participation Rate edged down to 62%. However, wage dynamics remained relatively firm, with Average Hourly Earnings increasing by 0.4% MoM and 3.8% YoY.
This combination of deteriorating job creation and still-elevated wage growth complicates the outlook for the Federal Reserve (Fed). A weaker labor market would normally reinforce expectations of monetary easing, but resilient wage pressures may limit the central bank’s room for aggressive rate cuts in the near term.
At the same time, US Retail Sales data also highlighted signs of a cooling economy, with sales declining by 0.2% MoM in January. Although the contraction was smaller than expected, the data confirmed a slowdown in consumer momentum, reinforcing concerns about the resilience of domestic demand.
Meanwhile, the US Dollar (USD) is finding renewed support from safe-haven flows as geopolitical tensions continue to fuel global risk aversion. In a post published on Truth Social, US President Donald Trump stated that there would be “no deal with Iran except unconditional surrender,” adding that the United States and its allies would later help select a new leadership to rebuild the country. These remarks reinforced geopolitical tensions in the Middle East, prompting investors to seek safe-haven assets and supporting a rebound in the USD.
The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, trades 0.30% higher on Friday, near 99.30 at the time of press, and remains close to its recent three-month high, reflecting persistent demand for the US currency despite the disappointing employment figures.
In the Eurozone, economic momentum remains modest. The latest figures showed that Gross Domestic Product (GDP) expanded by 0.2% QoQ in the fourth quarter, slightly below earlier estimates. On an annual basis, growth came in at 1.2%, reflecting the region’s fragile recovery amid ongoing trade tensions and external uncertainties.
As markets head toward the weekend, volatility in EUR/USD remains elevated. While the weak US employment data initially triggered a brief rebound in the pair, the broader risk-off environment continues to favor the US Dollar, limiting upside attempts for the Euro in the near term.
Economic Indicator
Nonfarm Payrolls
The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months' reviews and the Unemployment Rate are as relevant as the headline figure. The market's reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.
Read more.Last release: Fri Mar 06, 2026 13:30
Frequency: Monthly
Actual: -92K
Consensus: 59K
Previous: 130K
Source: US Bureau of Labor Statistics
America’s monthly jobs report is considered the most important economic indicator for forex traders. Released on the first Friday following the reported month, the change in the number of positions is closely correlated with the overall performance of the economy and is monitored by policymakers. Full employment is one of the Federal Reserve’s mandates and it considers developments in the labor market when setting its policies, thus impacting currencies. Despite several leading indicators shaping estimates, Nonfarm Payrolls tend to surprise markets and trigger substantial volatility. Actual figures beating the consensus tend to be USD bullish.
Economic Indicator
Unemployment Rate
The Unemployment Rate, released by the US Bureau of Labor Statistics (BLS), is the percentage of the total civilian labor force that is not in paid employment but is actively seeking employment. The rate is usually higher in recessionary economies compared to economies that are growing. Generally, a decrease in the Unemployment Rate is seen as bullish for the US Dollar (USD), while an increase is seen as bearish. That said, the number by itself usually can't determine the direction of the next market move, as this will also depend on the headline Nonfarm Payroll reading, and the other data in the BLS report.
Read more.Last release: Fri Mar 06, 2026 13:30
Frequency: Monthly
Actual: 4.4%
Consensus: 4.3%
Previous: 4.3%
Source:
United States (US) President Donald Trump said that Iran’s only option is unconditional surrender and that after that happens, he will help select its next leader in a Truth Social post on Friday.
Key quotes:
There will be no deal with Iran except unconditional surrender.
After that, a selection of a great & acceptable leader(s).
US, allies, and partners will work to bring Iran back from brink of destruction, boost economy."
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.44% | 0.17% | 0.24% | -0.07% | 0.38% | 0.56% | 0.08% | |
| EUR | -0.44% | -0.27% | -0.22% | -0.51% | -0.06% | 0.12% | -0.35% | |
| GBP | -0.17% | 0.27% | 0.04% | -0.23% | 0.21% | 0.39% | -0.07% | |
| JPY | -0.24% | 0.22% | -0.04% | -0.30% | 0.14% | 0.30% | -0.15% | |
| CAD | 0.07% | 0.51% | 0.23% | 0.30% | 0.44% | 0.61% | 0.16% | |
| AUD | -0.38% | 0.06% | -0.21% | -0.14% | -0.44% | 0.18% | -0.29% | |
| NZD | -0.56% | -0.12% | -0.39% | -0.30% | -0.61% | -0.18% | -0.46% | |
| CHF | -0.08% | 0.35% | 0.07% | 0.15% | -0.16% | 0.29% | 0.46% |
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).
- Retail Sales in the US lost momentum in January.
- US Dollar Index advances marginally to the 99.00 region.
Retail Sales in the United States eased to $733.5 billion, or 0.2%, in January, the US Census Bureau reported on Friday. This print followed the flat reading recorded in the previous month and came in above market expectations for a drop of 0.3%. On a yearly basis, Retail Sales were up 3.2% in this period.
"Retail trade sales were down 0.2% from December 2025, and up 3.0% from last year. Nonstore retailers were up 10.9% from last year, while food service and drinking places were up 3.9% from January 2025," the press release read.
Market reaction
The US Dollar (USD) gives away some gains following the release, although the US Dollar Index (DXY) keeps the bid bias unchanged above the 99.00 barrier.
(This story was corrected on March 6 at 14:56 GMT to say in the first paragraph that the Retail Sales report was released on Friday, not Tuesday.)
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
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