Forex News
Rabobank's Head of Macro Strategy Elwin de Groot highlights that United Kingdom (UK) Consumer Price Index (CPI) inflation for April undershot consensus, with services inflation easing, while UK Producer Price Index (PPI) surprised to the upside. He stresses that UK labour market slack is increasing and wage growth is slowing, yet a symbolic Bank of England (BoE) rate hike cannot be ruled out as policymakers reinforce their inflation-fighting credentials.
Soft CPI, firm PPI complicate BoE
"UK CPI inflation numbers for April came in below consensus this morning, led by a fall in services inflation but UK PPI surprised on the upside."
"In the UK, unemployment has moved back to around 5%, vacancies have dropped to a five-year low, and wage growth continues to slow."
"As Stefan Koopman, our UK analyst, notes, these are not the conditions of an overheated economy requiring aggressive monetary tightening."
"In the UK, for instance, a symbolic rate hike cannot be ruled out, as policymakers seek to underscore their commitment to the inflation target, even if the case for a full tightening cycle remains weak."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- AUD/USD stages a modest recovery from the vicinity of its lowest level since April 14.
- Geopolitical risks and rising Fed rate hike bets lift the safe-haven USD to a six-week top.
- Traders now look to the release of FOMC Minutes before positioning for a firm direction.
The AUD/USD pair attracts some buyers following an intraday dip to the 0.7085 region on Wednesday and moves away from its lowest level since April 14, touched the previous day. Spot prices climb to the 0.7115 area during the first half of the European session, though any meaningful appreciation seems elusive amid a bullish US Dollar (USD).
Investors remain skeptical about a potential US-Iran peace deal amid major disagreements over Tehran's nuclear program and the critical Strait of Hormuz. In fact, US President Donald Trump said on Tuesday that America may need to strike Iran again if a deal is not reached. This keeps geopolitical risks in play, which, along with hawkish US Federal Reserve (Fed) expectations, lifts the USD to a six-week high and might cap the upside for the AUD/USD pair.
Investors remain worried that the war-driven surge in energy prices will rekindle inflationary pressure and force the US Federal Reserve (Fed) to tighten its monetary policy. According to the CME group's FedWatch Tool, traders are now pricing in over a 50% chance that the US central bank will hike interest rates by at least 25 basis points (bps) in 2026. This remains supportive of elevated US Treasury bond yields and backs the case for a further USD appreciation.
The USD bulls, however, might opt to wait for more cues about the Fed's policy path before placing fresh bets. Hence, the focus will remain glued to the release of FOMC Minutes later today. In the meantime, some repositioning trade prompts intraday short-covering and offers some support to the AUD/USD pair. The fundamental backdrop, however, makes it prudent to wait for strong follow-through buying before confirming that spot prices have bottomed out.
US Dollar Price Last 7 Days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.27% | 1.17% | 0.99% | 0.55% | 1.81% | 1.91% | 1.23% | |
| EUR | -1.27% | -0.11% | -0.37% | -0.73% | 0.56% | 0.66% | -0.06% | |
| GBP | -1.17% | 0.11% | -0.30% | -0.62% | 0.60% | 0.75% | 0.03% | |
| JPY | -0.99% | 0.37% | 0.30% | -0.36% | 0.90% | 0.95% | 0.27% | |
| CAD | -0.55% | 0.73% | 0.62% | 0.36% | 1.27% | 1.31% | 0.65% | |
| AUD | -1.81% | -0.56% | -0.60% | -0.90% | -1.27% | 0.10% | -0.62% | |
| NZD | -1.91% | -0.66% | -0.75% | -0.95% | -1.31% | -0.10% | -0.70% | |
| CHF | -1.23% | 0.06% | -0.03% | -0.27% | -0.65% | 0.62% | 0.70% |
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).
European Central Bank (ECB) policymaker and the head of Belgium's central bank, Pierre Wunsch, said during the European trading session on Wednesday that the central bank needs to act at some point, as “we are at the beginning of an inflation problem”.
Market reaction
There is to be no immediate impact of ECB Wunsch's comments on the Euro (EUR). As of writing, EUR/USD trades 0.15% lower to near 1.1590 due to US Dollar's (USD) continued outperformance.
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
Deutsche Bank analysts report Brent Oil trading above $110 per barrel as the Strait of Hormuz remains constrained, sustaining a tight link between Oil and global yields. They note that Brent eased slightly after comments from President Trump but then crept higher, while inflation expectations fell and real yields drove rates, with TTF gas prices also pushing higher in Europe.
High prices, geopolitical risk linger
"By the close, Brent crude (-0.73%) was down to $111.28/bbl, though that decline had come after Trump’s comments on Monday evening, with oil prices then creeping higher for most of yesterday’s session."
"There hasn't been a single catalyst, but with Brent crude holding above $110/bbl and the Strait of Hormuz still blocked, investors moved to price a growing probability of imminent rate hikes."
"Interestingly, yesterday’s rates move came despite pretty stable oil prices, which is noteworthy given how tight the correlation has been between Treasury yields and oil since the Iran conflict began."
"The drift lower in Europe came even as natural gas prices recorded an eighth consecutive increase, with TTF gas rising +3.12% to EUR 51.82/MWh, its highest since early April."
"Elsewhere, Eurozone trade data showed the bloc’s trade surplus falling to 9-month low in March amid higher oil prices and a rising deficit with China."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Silver price bounces back to near $75.20, outlook remains uncertain.
- US short and long-dated Treasury yields surge as traders price out dovish Fed bets.
- Investors await FOMC minutes for fresh cues on the US interest rate outlook.
Silver price (XAG) trades 2% higher to near $75.20 during the European trading session on Wednesday. The white metal recovers from its almost two-week low of $73.10 posted the previous day. However, the outlook of the Silver price remains bearish as United States (US) Treasury Yields remain firm due to expectations that the Federal Reserve (Fed) will hike benchmark lending rates this year.
10-Year US bond yields have posted a fresh over-a-year high at 4.69% during the day, while yields on 30-year US Treasuries jumped to 5.2%, the highest level seen beyond the sub-prime crisis.
Theoretically, higher yields on interest-bearing assets diminish demand for non-yielding assets, such as Silver.
The CME FedWatch tool shows that the odds of the Fed delivering at least one interest rate hike this year are 56.3%, a sharp turnaround from two interest rate cuts anticipated before the war started in the Middle East.
Dovish Fed bets have squeezed as US inflationary pressures have accelerated due to elevated oil prices. The US Consumer Price Index (CPI) data showed last week that the headline inflation accelerated to 3.8% Year-on-Year (YoY), the highest level seen in almost three years.
Higher US Treasury yields have also strengthened the US Dollar (USD). In the European trade, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, posts a fresh six-week high at 99.47.
Theoretically, a higher US Dollar makes the Silver price an unfavorable risk-reward bet for investors.
For more cues on the United States interest rate outlook, investors await Federal Open Market Committee (FOMC) minutes of the April policy meeting, which will be published at 18:00 GMT.
Silver technical analysis
XAG/USD trades higher at around $75.20; however, the near-term tone remains bearish, as it holds below the 20-day Exponential Moving Average (EMA) at around $78.05.
The Relative Strength Index (RSI) at about 46 hovers below the midline, hinting at subdued bullish momentum and reinforcing the idea that bounces are likely to face selling pressure into nearby overhead levels.
The white metal is at a make-or-break point near the upward-sloping border of the Ascending Triangle formation near $75.20. Fresh downside looks likely towards $70.00 if the Silver price fails to hold above its almost two-week low of $73.10. Looking up, the 20-day EMA will act as dynamic barrier; and a break above that is needed to ease downside pressure.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
FOMC Minutes
FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.
Next release: Wed May 20, 2026 18:00
Frequency: Irregular
Consensus: -
Previous: -
Source: Federal Reserve
Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.
- GBP/JPY looks for direction just below 213.00 halfway through the last few weeks' range.
- UK CPI softened beyond expectations in April, adding some pressure on the Pound.
- The wide differential between Japanese and US bond yields is acting as a headwind for Yen recovery.
The Pound (GBP) is trading practically flat against the Japanese Yen (JPY) on Wednesday, moving halfway through the last three weeks’ trading range, a few pips below 213.00. A sharper-than-expected decline in UK inflation in April hurt the Pound, but the Yen remains weighed down by the differential between Japanese and US Treasury yields as energy prices boost inflationary risks.
UK Consumer Prices Index (CPI) data for April showed inflation cooled to a 2.8% year-on-year from 3.3% in March, below the 3% forecast by market analysts. The core CPI eased to a 2.5% yearly growth from 3.1% in March, also below the 2.6% market consensus.
Producer Price Indexes (PPI), on the other hand, have shown higher-than-expected figures, with the Input prices jumping to more than three-year highs at a 7.7% YoY rate, although Output prices have shown a more moderate increase.
The market has taken these figures as a token that the Bank of England (BoE) will keep interest rates unchanged in June, and the Pound responded with minor pullbacks against most major currency peers.
The Yen, on the other hand, remains weighed down by the wide differential between US Treasury yields and the Japanese Government Bond (JGB) yields. This leaves the JPY as a currency of choice for carry trade, consisting of borrowing a low-yielding currency to buy a higher-yielding one. US Treasury Secretary Scott Bessent pressured the Japanese authorities, on his visit to Japan, to clear political hurdles for the Bank of Japan (BoJ) to tighten its monetary policy to support an ailing Yen.
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.
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.
