Forex News

• The Japanese Yen gains against the US Dollar, but is down against its other peers.
• Investors expect both the BoJ and the Fed to hold interest rates steady.
• Iran’s readiness to reach a permanent ceasefire with the US has diminished the US Dollar’s appeal.

The Japanese Yen (JPY) trades higher against the US Dollar (USD), with the USD/JPY pair dropping to near 159.15, during the European trading session on Monday. The pair comes under pressure as the US Dollar (USD) turns upside down amid signs of readiness from Iran regarding a permanent ceasefire with the United States (US).

During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.25% lower to near 98.25 after erasing strong opening gains.

Earlier in the day, a report from Axios showed that Iran has delivered another proposal regarding negotiations on Tehran’s nuclear ambitions with a precondition to lift the US blockade for the reopening of the Strait of Hormuz.

Over the weekend, US President Donald Trump announced that he had canceled the US envoys’ visit to Islamabad, calling it a waste of time, as the counteroffer by Iran, as received from Pakistan, is not good enough.

The US-Iran permanent truce, along with the Hormuz reopening, would be an unfavorable situation for the US Dollar, as it would anchor inflation expectations and diminish the hopes of interest rate hikes by the Federal Reserve (Fed) in the near term.

For more cues on the US interest rate outlook, investors await the Fed’s monetary policy announcement on Wednesday, in which it is expected to leave borrowing rates unchanged in the range of 3.50%-3.75%.

Though the JPY trades higher against the US Dollar, it is down against its other peers, ahead of the Bank of Japan’s (BoJ) monetary policy announcement on Tuesday. Investors expect the BoJ to hold interest rates steady at 0.75%, as energy price shocks have raised economic concerns.

MUFG’s Lee Hardman highlights that the Pound (GBP) has outperformed, pushing EUR/GBP to new lows as markets price a more hawkish Bank of England (BoE) stance on the back of stronger United Kingdom (UK) growth and sticky inflation. However, he warns that rising domestic political risks around Prime Minister Starmer’s leadership could trigger at least a temporary Pound sell-off in coming weeks.

BoE support versus UK political risks

"The pound outperformed last week resulting in EUR/GBP falling to a fresh low overnight of 0.8649."

"The pound has been supported by the hawkish repricing of BoE rate hike expectations encouraged by further evidence of stronger UK growth momentum at the start of this year while underlying inflation pressures remained uncomfortably high at the start of the energy price shock."

"We expect a hawkish hold this week with two MPC members Chief Economist Pill and MPC member Mann voting for a hike."

"Support for the pound from higher UK rates is currently offsetting headwinds from higher energy prices while the UK economy is holding up, and domestic political risks ahead of the local elections."

"Domestic political developments have the potential to trigger at least a temporary sell-off for the pound in the coming weeks."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• USD/CHF may test the descending channel’s lower boundary near 0.7690.
• The 14-day Relative Strength Index near 47 signals weak momentum, not a clear oversold condition.
• The initial resistance lies at the nine-day EMA of 0.7843.

USD/CHF remains subdued for the second successive day, trading around 0.7840 during European hours on Monday. The technical analysis of the daily chart indicates the pair is positioned within the descending channel pattern, signaling an ongoing bearish bias.

The USD/CHF pair keeps a bearish near-term bias as the spot price holds beneath both the nine-day and 50-day Exponential Moving Averages, respectively. The short-term EMA flattening just above the price and the longer EMA capping the pair hint at persistent overhead supply, while the 14-day Relative Strength Index (RSI) around 47 reflects subdued momentum rather than a decisive oversold condition.

The USD/CHF pair may navigate the region around the lower boundary of the descending channel around 0.7690. A successful break below the channel would reinforce the bearish bias and put downward pressure on the pair to test 0.7604, the lowest since August 2011, recorded in January.

On the upside, the immediate barrier lies at the nine-day EMA of 0.7843, followed by the 50-day EMA at 0.7862. A break above these EMAs would improve price momentum and support the USD/CHF pair to test the upper boundary of the descending channel around 0.7949. A sustained break above the channel would cause the emergence of the bullish bias and lead the pair to explore the region around the 10-month high of 0.8171, reached in August 2025.

(The technical analysis of this story was written with the help of an AI tool.)

Commerzbank analysts flag INR as the region’s laggard, with USD/INR hitting record highs on higher Oil prices, wider current account concerns and capital outflows. They describe RBI’s active defence via FX intervention and position limits, and project only modest INR stabilization ahead as reserves remain ample but policy aims to lean against, not fully reverse, currency weakness.

Record USD/INR and RBI defence

"INR is the weakest currency in Asia, down 4.6% YTD. USD/INR reached an all-time high of just above 95.00 at the start of April. This was due to higher oil prices, which are viewed as exacerbating the current account deficit, and net capital outflows on the geopolitical uncertainties."

"RBI has intervened directly along with measures to mitigate INR’s weakness, including capping banks’ net open rupee positions at USD100mn per day to prevent large speculative bets against the currency and restricted arbitrage opportunities on offshore linked FX products."

"We expect RBI to take a pragmatic approach and lean against INR’s weakness rather than offset it altogether. India’s FX reserves fell by over 5% in March 2026 to USD688bn as RBI sold USD to support the currency. It has since recovered to USD703bn as of 17 April, which is still at a healthy level of around 10.9 months of import cover."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• The Pound Sterling is under pressure against its peers amid uncertainty ahead of the BoE’s monetary policy.
• Investors expect the Fed and the BoE to leave interest rates unchanged.
• The UK core CPI growth cooled down to 3.1% in March.

The Pound Sterling (GBP) faces selling pressure against its major currency peers, but is marginally higher against the US Dollar (USD) around 1.3545, during the European trading session on Monday. The British currency drops amid uncertainty surrounding the Bank of England’s (BoE) monetary policy announcement on Thursday.

Market participants expect the BoE to leave interest rates unchanged at 3.75%, with an 8-1 majority, as the United Kingdom (UK) core Consumer Price Index (CPI) growth has squeezed in March, and higher oil prices in the wake of Middle East conflicts have raised uncertainty over the economic outlook.

BoE Chief Economist Huw Pill could be the one policymaker voting for an interest rate hike as he expressed the need to tighten monetary conditions, in an event last week, stressing the need to contain elevating price pressures.

However, BoE Governor Andrew Bailey stated, at the International Monetary Fund (IMF) meeting in Washington last week, that there is no rush for a monetary policy adjustment in the upcoming policy meeting on April 30 despite having a “very big negative shock”, Reuters reports.

Last week, the UK CPI report showed that the core inflation data – which excludes volatile items such as of food, energy, alcohol and tobacco – decelerated to 3.1% Year-on-Year (YoY) from the previous reading of 3.2%.

Ahead of the BoE‘s monetary policy announcement, investors await the Federal Reserve’s (Fed) policy on Wednesday. The Fed is also expected to hold interest rates steady in the current range of 3.50%-3.75% for the third time in a row.

• USD/CAD extends its reversal from 1.3713, nearing six-week lows at 1.3635.
• Moderate optimism about US-Iran negotiations is keeping the US Dollar on the defensive.
• The BoC and the Fed will release their monetary policy decisions on Wednesday.

The US Dollar (USD) is showing the weakest performance among the G8 majors on Monday, and depreciates against the Canadian Dollar (CAD) for the second consecutive day. The pair trades at 1.3630 at the time of writing, to test fresh six-week lows after a knee-jerk reaction at 1.3713 on Friday.

A moderate optimism about a negotiated end of the Middle East conflict is keeping the safe-haven US Dollar on the defensive on Monday. The second round of US-Iran peace talks has been cancelled, but a report from Axios affirming that Tehran has sent a new peace proposal to the US is feeding a mild risk appetite alive at the week's opening.

Axios, citing a US official and two sources familiar with the matter, reported that Iran has offered the US the possibility of ending the conflict and reopening the Strait of Hormuz, and leaving nuclear negotiations to a later stage.

The key waterway, which transports about a fifth of global Oil production, meanwhile, remains shut for almost two months, keeping Crude prices supported near the key $ 100-per-barrel level. The barrel of the US benchmark West Texas Intermediate (WTI) has gained about $6 over the last two days and is trading at $94.70 at the time of writing, providing support to the commodity-sensitive CAD.

Central banks return to the focus

Apart from that, central banks will take the spotlight this week. The Bank of Canada (BoC) is expected to leave its monetary policy unchanged for the fourth consecutive time on Wednesday. The BoC is likely to note the higher inflationary pressures but will request more time to decide its monetary policy amid the uncertainty in the Middle East.

The US Federal Reserve (Fed) is likely to follow suit a few hours later. The market is fully pricing interest rates to remain on hold throughout 2026, according to the CME Fed Watch Tool, which also shows that there is a 66% chance that the central bank keeps its monetary policy steady in December this year. 

Wednesday’s Fed meeting is likely to be also the last of Jerome Powell as the bank’s chairman, as his term ends in May, and former Governor Kevin Warsh has been appointed to replace him. What is not clear is whether Powell will keep his chair at the Board of Governors or will definitely leave the bank, as US President Donald Trump demands. The outcome of the Powell-Trump saga and the independence of the Fed are likely to remain an issue during the days following the meeting.

ING’s Chris Turner expects the Euro to trade in tight ranges as markets await Thursday’s European Central Bank (ECB) meeting. He notes the ECB is unlikely to hike but must keep a rate increase on the table given high Oil-driven inflation expectations. ING believes a strong warning about a possible June hike can keep EUR/USD supported near 1.1700 this week.

ECB communication key for Euro

"The highlight of the eurozone calendar this week will be Thursday's European Central Bank meeting."

"The stagflationary shock of the oil crisis is already starting to show up in European data, and while not hiking rates on Thursday, the ECB will still have to present a strong message that a rate hike is on the table."

"With high oil prices keeping inflation expectations at their highest (e.g., two-year EUR inflation expectations derived via the inflation swap are still above 2.80%), any signs that the ECB is looking through the inflation spike could see the euro punished."

"That is not our call, and we feel that a strong warning over a June rate hike can keep EUR/USD supported near 1.1700 this week."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• Gold regains positive traction as hopes for US-Iran peace talks exert some pressure on the USD.
• Softer Oil prices ease inflation fears and hawkish Fed bets, further benefiting the precious metal.
• The recent range-bound price action warrants caution for bulls ahead of the key FOMC meeting.

Gold (XAU/USD) struggles to build on a modest intraday move up, though it manages to hold above the $4,700 mark through the first half of the European session on Monday. Iran reportedly gave the ‌US a new proposal ​on ​reopening the Strait of ​Hormuz and  ​ending the war, with ​nuclear negotiations ​postponed for a ‌later stage. This, in turn, revives hopes for US-Iran peace talks and undermines the US Dollar's (USD) reserve currency status, which is seen as acting as a tailwind for the commodity.

The optimism exerts some downward pressure on Crude Oil prices and eases inflationary concerns, leaving the door open for at least one 25-basis-point (bps) interest rate cut by the US Federal Reserve (Fed) in 2026. This turns out to be another factor weighing on the Greenback and benefiting the non-yielding Gold. However, a combination of factors might hold back traders from placing aggressive bullish bets on the XAU/USD pair and keep a lid on any meaningful appreciating move.

Traffic through the Strait of Hormuz remains largely blocked due to Iran's restrictions on movement and the US naval blockade of Iranian ports. Furthermore, Israeli Prime Minister Benjamin Netanyahu said he has ordered the military to vigorously attack Hezbollah targets in Lebanon. This keeps geopolitical risks in play, which should limit losses for Crude Oil prices and the safe-haven USD, warranting some caution before positioning for any further move up for the XAU/USD pair.

Traders also seem reluctant and opt to move to the sidelines ahead of the crucial two-day FOMC policy meeting, starting on Tuesday. Investors will look for more cues about the Fed's policy path amid still sticky inflation and resilient US economic activity. The outlook, in turn, will play a key role in driving the USD demand. Apart from this, developments surrounding the US-Iran saga should contribute to infusing volatility and providing some meaningful impetus to the XAU/USD pair.

Meanwhile, Gold premiums in India climbed to their highest in over two-and-a-half months last week due to limited supplies. Moreover, bullion traded at premiums of $9 to $12 an ounce in China, up from the previous week's premium of $3 to $6 amid some renewed physical demand ​and fresh buying interest, further favoring bulls. This, in turn, backs the case for a further upside for the XAU/USD pair and suggests that intraday slides are more likely to be bought into and remain limited.

XAU/USD daily chart

Gold extends the range play as traders seem hesitant amid mixed setup

From a technical perspective, the precious metal has been consolidating in a familiar range since the beginning of this month. This comes on top of a solid rebound from the very important 200-day Simple Moving Average (SMA), tested in March, and suggests the broader uptrend remains intact, even as momentum cools. In fact, the Relative Strength Index (RSI) is hovering near a neutral 47, and the Moving Average Convergence Divergence (MACD) indicator is showing only modest positive readings. This hints at waning upside pressure rather than a decisive reversal, suggesting a period of sideways-to-soft consolidation before a clearer directional move emerges.

Meanwhile, weakness back below the $4,700 mark might continue to find decent support and attract fresh buyers near the lower boundary of the month-to-date range, around the $4,650-$4,645 region. A convincing break below might prompt aggressive technical selling and pave the way for deeper losses. On the upside, the $4,750 area could act as an immediate hurdle ahead of the $4,800 mark and the $4,860-$4,865 region. The latter represents the top end of the trading range, which, if cleared decisively, will be seen as a fresh trigger for bullish traders and set the stage for a further appreciating move beyond the $5,000 psychological mark.

HSBC Asset Management notes that upcoming meetings of the Federal Reserve (Fed), European Central Bank (ECB and Bank of England (BoE) are unlikely to deliver policy changes, but guidance on inflation and growth will be closely watched. Global equities have seen modest declines as Oil rebounds and US Treasury yields rise. The report stresses that equity volatility in 2026 remains historically normal despite geopolitical shocks.

Central banks, yields and equity swings

"This week’s meetings of the Federal Reserve (Fed), European Central Bank (ECB) and Bank of England (BoE) are likely to pass without any policy moves. But with the outlook still uncertain, investors will be listening carefully for clues on how policymakers are weighing up inflation and growth risks, although the central banks are likely to try and keep their options open."

"Global equities posted modest declines as oil prices rebounded amid ongoing geopolitical concerns. In developed markets, the S&P 500 pulled back from a new high despite solid Q1 US earnings and continued AI optimism, while tech shares led the gains in Nikkei 225, which also hit a fresh record."

"Markets feel chaotic in 2026, but equity volatility is actually… normal. Global stock market volatility typically sits in the mid-teens, which is where it is today."

"In summary, volatility is the price of admission in 2026. Staying disciplined, diversified, and avoiding the behavioural traps remain the investor’s edge."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• Dow Jones futures fall as risk aversion rises after Trump cancels Pakistan delegation for potential direct engagement.
• Rising energy prices intensify worries about persistent inflation and reinforce a hawkish central bank outlook.
• Traders await earnings from megacap tech firms this week, including Microsoft, Amazon, Alphabet, Meta, and Apple.

Dow Jones futures falls 0.16%, trading near 49,300 during the European hours on Monday, ahead of the United States (US) regular opening. Meanwhile, S&P 500 and Nasdaq 100 futures decline 0.10% and 0.06% to near 7,190 and 27,420, respectively.

US stock futures lose ground as risk aversion increases on stalled US–Iran peace talks. US President Donald Trump called off that delegation to Pakistan to potentially discuss directly with Iran. Iranian President Masoud Pezeshkian stated that his nation won’t enter “imposed negotiations under threats or blockade.” However, Axios reported on Monday, citing a US official and two informed sources, that Iran has proposed reopening the Strait of Hormuz and ending the war, while deferring nuclear talks.

Higher energy prices heighten concerns over persistent inflationary pressures and hawkish tone surrounding the central banks. However, the US Federal Reserve is expected to act cautiously, with gradual rate cuts anticipated under incoming Chair Kevin Warsh. Warsh is expected to assume the role in May.

The Fed is widely expected to keep interest rates unchanged at its upcoming April policy meeting due on Wednesday. Traders will closely watch the Fed’s press conference for more clues on how policymakers are interpreting the impact of higher energy costs and whether this alters their longer-term outlook on interest rates. Meanwhile, investor focus turns to earnings from megacap tech firms this week, including Microsoft, Amazon, Alphabet, Meta, and Apple.