Forex News
DBS Group Research economist Chua Han Teng assesses Singapore’s economic outlook as resilient but increasingly tested by Middle East tensions and energy risks. The bank highlights strong 1Q26 GDP data, robust AI-driven exports, and solid services and construction activity. However, DBS warns that external uncertainties and energy disruptions could weigh on growth, while keeping its 2026 GDP forecast at 2.8%.
AI exports offset energy disruptions risk
"Singapore is confronting the ongoing Middle East conflict from a position of strength, but the renewed geopolitical shock is testing the resilience of its highly open economy."
"Real GDP growth outperformed again, with an upward revision today to 6.0% yoy and 1.0% qoq sa in 1Q26, above advance estimates of 4.6% yoy and -0.3% qoq sa."
"The positive adjustment was driven by stronger-than-expected outcomes across the manufacturing, construction, and services sectors."
"We still see positive dynamics in key outward-oriented sectors, but expect growth to be uneven and challenged by external uncertainties as the year progresses."
"We maintain our 2026 economic growth forecast at 2.8%, and continue to monitor two-sided risks."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- WTI Oil falls below $90.00 for the first time in two weeks on reports of progress in the US-Iran peace talks.
- Crude prices remain about 35% above pre-war levels.
- Market analysts affirm that prices will remain high for a long time, even after Hormuz reopening.
Oil prices gapped lower at Monday’s opening times, accelerating the decline observed in the last half of the previous week. The barrel of the US benchmark West Texas Intermediate (WTI) crude is trading at $89.70 at the time of writing, about $15 down from last week’s highs, amid news of progress in the US-Iran peace talks.
US President Donald Trump boosted optimism over the weekend, affirming that a peace agreement is possible, although he ruled out any immediate breakthrough and said the US will keep the Strait of Hormuz closed until the agreement is sealed and signed.
Along the same line, the US Secretary of State Marco Rubio affirmed on Monday that negotiations with Tehran are “still a work in progress,” while the Iranian official news agency reported that central bank chiefs are flying to Qatar to deal with frozen funds from the Islamic Republic.
All these reports suggest that things are moving and contribute to keeping hopes of a swift end to the war and the reopening of the Strait of Hormuz alive. From a wider perspective, however, the barrel of Crude Oil remains about 35% above pre-war levels and is likely to remain high for some time.
The Chief of the International Energy Agency (EIA), Fatih Birol, warned last week that stockpiles are falling fast and that oil markets might enter “red” zone in July or August as the Western summer time boosts demand for Oil. Market experts have also cautioned about excessive enthusiasm as global crude supply is likely to take some time to get back to normal, even if the Strait of Hormuz reopens immediately. JP Morgan analysts have predicted that crude prices will be near $100 for most of the year.
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.
- GBP/USD remains firm near 1.3500 as the appeal of risk-sensitive assets remain upbeat.
- US President Trump said that agreement with Iran has “largely negotiates”.
- Iran said that it is not close to reaching a deal with the US.
The British Pound (GBP) clings to opening gains around 1.3500 against the US Dollar (USD) during the late European trading session on Monday. The GBP/USD pair trades higher as the market sentiment remains risk-on due to expectations that the United States (US) and Iran will reach a deal soon.
At the press time, S&P 500 futures are up almost 1% around 7,550, reflecting strong demand for riskier assets. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.33% lower to near 99.00.
The market sentiment remains favorable for riskier assets as US President Donald Trump stated over the weekend that the agreement with Iran is “largely negotiated”. However, comments from Iran appear to be in contrast with Trump’s statement.
“We've reached conclusions on many topics discussed, but that does not mean we're close to signing an agreement,” a spokesperson from Iranian Foreign Ministry said during the European trade.
GBP/USD technical analysis
GBP/USD trades firmly at around 1.3500 as of writing. The near-term tone of the pair turns modestly bullish bias as it has returned above the 20-day Exponential Moving Average (EMA), which is at 1.3474. The reclaimed short-term EMA suggests underlying demand is attempting to stabilize the recent advance, while the Relative Strength Index (RSI) around 52 aligns with a neutral-to-firm tone rather than overextended conditions.
On the topside, immediate resistance is located at the former downward resistance trend-line break level around 1.3612, and a sustained push through this barrier would open the way for further recovery towards 1.3700. Looking down, the pair could slide to 1.3400 if it fails to hold the 20-day EMA. The pair could witness more downside towards the May 18 low of 1.3302 once it breaks below 1.3400.
(The technical analysis of this story was written with the help of an AI tool.)
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.
Brown Brothers Harriman’s (BBH) Elias Haddad expects the National Bank of Hungary (MNB) to keep its policy rate at 6.25% for a third straight meeting. Haddad highlights the euro-convergence trade as a structural tailwind for the Hungarian Forint (HUF), noting Hungary’s new government aims to meet Euro adoption conditions by 2030, supporting a constructive medium-term HUF outlook.
Stable policy with structural HUF support
"MNB is widely expected to keep rates steady at 6.25% for a third consecutive meeting."
"The euro-convergence trade will continue to be an important structural tailwind for HUF."
"Hungary’s new government plans to meet euro adoption conditions by 2030."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
HSBC Asset Management discusses how rising global bond yields, including higher US 10-year Treasuries, are affecting global equities. The report argues that current yield moves are still consistent with an environment stocks can tolerate, as real yields remain low and profit growth is strong. It also notes recent softness in global equities as valuation concerns offset robust US earnings.
Stocks digest higher global yields
"Global bond yields are on the rise, with US 10-year Treasury yields up around 0.2% in recent weeks, and investors are asking whether this spike is finally what kills the stock market? The answer is that it depends on whether the bond move is “good” or “bad”."
"So, which is it now? The answer is: it’s not too bad. Since February, most of the move in bond yields has been at the short end, with a big shift in central bank policy expectations."
"But while nominal yields are up, inflation adjusted “real” yields remain low across the curve. That’s good news for stocks, which are naturally inflation hedged, and sensitive to real rates."
"It is worth keeping a close eye on bond yields… but right now, it’s a move that stocks can live with, albeit with some volatility. The weapon is blunt."
"Global equities softened as renewed concerns over high valuations offset strong Q1 US earnings. In the US, the S&P 500 and Nasdaq indices retreated, with Nikkei 225 also weak and Euro Stoxx 50 index little changed."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- XAU/USD reaches session highs near $4,580 from last week's lows near $4,450.
- Comments of avances in the US-Iran negotiations have hit the safe-haven US Dollar.
- An inverted Head & Shoulders hints at further recovery.
Gold (XAU/USD) is trading higher on Monday, favoured by a moderate risk appetite amid recent comments from the US and Iran hinting at progress in peace negotiations. Gold has extended its recovery from last week’s lows, near $4,450, to session highs at $4,579 on Monday, as the US Dollar Index retreated to the bottom of last week’s trading range.
US President Donald Trump and Secretary of State Marco Rubio have reported some advances in the negotiations with Tehran, yet discarding an immediate breakthrough and warning that the US blockade of the Strait of Hormuz will remain in place until the deal is signed and sealed.
On Monday, a spokesperson from Iran’s Foreign Ministry affirmed that both parties are negotiating the end of the war and assured that nuclear negotiations are off the table, which feeds hopes of a swifter agreement. He also reiterated that the Strait of Hormuz should be managed by coastal countries.
Technical Analysis: A bullish Head & Shoulder is in progress
XAU/USD trades at $4,572, keeping a mildly bullish near-term tone, with price action forming an inverted Head and Shoulders (H&S) pattern, which is considered a bullish figure. The Relative Strength Index (RSI) at 58.93 leans toward positive momentum, and the Moving Average Convergence Divergence (MACD) has turned decisively higher in positive territory, which together suggest buyers are gradually regaining control.
The precious metal, however, will not be out of the woods until the H&S neckline, now around $4,575, and the top of last week's trading range, at the $4,590 area, are broken. Further up, the next targets would be the previous support level around $4,640, and May's top at the $4,770 area.
On the downside, session lows are at the $4,530 area, which is likely to hold bears ahead of last week's lows at the mentioned $4,450 area. A break below here negates this view and exposes the March 23 lows near $4,350.
(The technical analysis of this story was written with the help of an AI tool.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
- The Indian Rupee strengthens following RBI Malhotra’s comments regarding further intervention and US-Iran deal hopes.
- RBI Governor Malhotra states that the central bank has more means to ensure INR’s orderly price discovery.
- US President Trump said that an agreement with Iran has “largely negotiated”.
The Indian Rupee (INR) opens on a strong note against the US Dollar (USD) at the start of the week. The USD/INR pair extends its losing streak for the fourth trading day on Monday, sliding to near 95.20, the lowest level seen in almost two weeks.
The Indian currency has appreciated due to hopes of further Reserve Bank of India’s (RBI) intervention in forex markets. Also, a significant decline in oil prices at open due to improved hopes of the United States (US)-Iran deal strengthened the Indian Rupee. While there has been a sharp recovery move in oil prices after Iran stated that the Strait of Hormuz issue belongs to coastal countries.
RBI Governor Malhotra keeps door open for further intervention in forex markets
In an interview with Mint, earlier in the day, RBI Governor Sanjay Malhotra assured that the central bank is ready to intervene against one-way excessive moves against the domestic currency. Malhotra added the central bank has enough tools in its kit, including nearly $700 billion in reserves to quell any undue speculative movement, which backs his confidence.
RBI’s Malhotra also expressed confidence that the Indian Rupee would start appreciating once the Middle East situation will start normalizing.
A significant Indian Rupee’s recovery after RBI Governor Malhotra’s interview suggests that his comments have brought at least an immediate improvement in investors’ sentiment toward the domestic currency. The Indian Rupee’s performance in the last year has been the worst among its Asian peers due to several reasons, especially the trade war with the US, elevated oil prices and significant Gold imports.
Iran says Hormuz issue belongs to coastal countries
In India's afternoon trading hours, the WTI Oil price recovers to near $91.60 after sliding over 6% at around $89.50, following Tehran's comments that issues relating to the Strait of Hormuz belong to costal nations. "Management of the Strait belongs to the coastal countries," the Iranian Foreign Ministry said, adding, that the potential MoU in disussion with the US has "no specific details about the Hormuz management
In the opening trade, oil prices cracked after US President Donald Trump expressed confidence, through post on Truth Social, that the agreement is “largely negotiated” with Iran and the Strait of Hormuz will be reopened soon. Trump added, “In addition to many other elements of the Agreement, the Strait of Hormuz will be opened.”
However, later in a post, US President Trump said that Washington is in “no rush for a deal” as “time is on our side”, adding, “The negotiations are proceeding in an orderly and constructive manner.”
Currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, attract bids following a sharp correction in oil prices.
FIIs remained net sellers for straight fourth trading day
Foreign Institutional Investors (FIIs) are turning out to be net sellers in the Indian stock market for the last four trading days, and have offloaded their stake worth Rs. 10,386.52 crore. Overseas investors continue to pare their stake in the Indian equity market due to growing concerns over India Inc.’s projected earnings amid energy price shock.
Lower US Dollar also hurts USD/INR
A decent correction in the US Dollar amid hopes of a breakthrough in the US-Iran negotiations has also hurt the USD/INR pair. During the press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.3% lower to near 99.00. Lower oil prices and hopes of the US-Iran resolution have diminished US Dollar’s safe-haven appeal and hawkish Federal Reserve (Fed) prospects for the year.
According to the CME FedWatch tool, the odds of the Fed delivering at least one interest rate hike this year are almost 57%, down from 67% recorded on Friday.
Technical Analysis: USD/INR could slide towards 95 if fails to hold 20-day EMA
USD/INR trades weakly at around 95.20 during the day. There has been a mean-reversion move in the pair toward the 20-day exponential moving average (EMA), which is at 95.3719, after a strong rally.
The Relative Strength Index (RSI) around 53 suggests neutral-to-slightly positive momentum, hinting that buyers still retain a modest edge while price action stabilizes above short-term trend support.
On the downside, the pair could slide toward 95.00 if it fails to hold the intraday low at 95.20. A downside move below 95.00 would open the door for further correction toward 94.00. Looking up, the pair needs to recover above the May 22 high at 96.37 to ease the downside pressure; and it could return toward 97.00 if it manages to do so.
(The technical analysis of this story was written with the help of an AI tool.)
According to Iran's official news agency, Iranian central bank chief travels to Qatar after Qatari delegation visited Tehran regarding frozen funds.
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