Forex News
The United States (US), Iran and regional mediators are discussing terms for a possible 45-day ceasefire that could lead to an end of fighting, Bloomberg reported on Monday, citing Axios. The people, who were not named, said chances of reaching a deal over the next 48 hours are low.
Earlier, US President Donald Trump extended his deadline by 20 hours, posting a new deadline of Tuesday at 8:00pm EST.
Market reaction
At the time of press, the WTI price is down 0.95% on the day at $102.85.
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.
- Asian stock markets open mixed following Trump's threat to target Iran's civilian infrastructure.
- Concerns about Iran's reciprocal attacks on targets in the Gulf states keep investors on edge.
- War-driven inflation fears fuel Fed rate hike bets and also undermine the global risk sentiment.
Asian equity markets opened mixed at the start of a new week as traders remain on edge amid the risk of a further escalation of tensions in the Middle East. US President Donald Trump threatened to destroy Iran's civilian infrastructure, including power plants and bridges, if the vital waterway is not open by Tuesday, if Tehran does not meet his deadline to reopen the Strait of Hormuz by Tuesday.
Iran, on the other hand, outlined a new condition and said that the transit through the strategic waterway could resume if part of the revenue is allocated to compensate Iran for war-related damages. Adding to this, Ali Akbar Velayati, an advisor to Iran’s new Supreme Leader Mojtaba Khamenei, warned that the resistance front could target the Bab el-Mandeb Strait in the Red Sea—another critical chokepoint. This fuel worries about a further disruption to key global trade routes and continues to weigh on investors' sentiment.
Meanwhile, persistent geopolitical uncertainties remain supportive of elevated Crude Oil prices, which, in turn, continue to fuel inflationary concerns. Apart from this, the upbeat US Nonfarm Payrolls (NFP) report released on Friday removes any near-term pressure on the Federal Reserve (Fed) to cut interest rates. Market players, instead, are now pricing in a greater chance that the US central bank will raise borrowing costs by the end of this year. This turns out to be another factor that undermines the global risk sentiment.
At the time of writing, Japan’s Nikkei 225 and South Korea’s Kospi are trading around 1% higher for the day. Meanwhile, Indonesia's IDX Composite and Malaysia's KLCI index are experiencing some downward pressure amid relatively thin liquidity on the back of the Easter Monday Holiday in many global financial markets.
Asian stocks FAQs
Asia contributes around 70% of global economic growth and hosts several key stock market indices. Among the region’s developed economies, the Japanese Nikkei – which represents 225 companies on the Tokyo stock exchange – and the South Korean Kospi stand out. China has three important indices: the Hong Kong Hang Seng, the Shanghai Composite and the Shenzhen Composite. As a big emerging economy, Indian equities are also catching the attention of investors, who increasingly invest in companies in the Sensex and Nifty indices.
Asia’s main economies are different, and each has specific sectors to pay attention to. Technology companies dominate in indices in Japan, South Korea, and increasingly, China. Financial services are leading stock markets such as Hong Kong or Singapore, considered key hubs for the sector. Manufacturing is also big in China and Japan, with a strong focus on automobile production or electronics. The growing middle class in countries like China and India is also giving more and more prominence to companies focused on retail and e-commerce.
Many different factors drive Asian stock market indices, but the main factor behind their performance is the aggregate results of the component companies revealed in their quarterly and annual earnings reports. The economic fundamentals of each country, as well as their central bank decisions or their government’s fiscal policies, are also important factors. More broadly, political stability, technological progress or the rule of law can also impact equity markets. The performance of US equity indices is also a factor as, more often than not, Asian markets take the lead from Wall Street stocks overnight. Finally, the broader risk sentiment in markets also plays a role as equities are considered a risky investment compared to other investment options such as fixed-income securities.
Investing in equities is risky by itself, but investing in Asian stocks comes along with region-specific risks to be taken into account. Asian countries have a wide range of political systems, from full democracies to dictatorships, so their political stability, transparency, rule of law or corporate governance requirements may diverge considerably. Geopolitical events such as trade disputes or territorial conflicts can lead to volatility in stock markets, as can natural disasters. Moreover, currency fluctuations can also have an impact on the valuation of Asian stock markets. This is particularly true in export-oriented economies, which tend to suffer from a stronger currency and benefit from a weaker one as their products become cheaper abroad.
- AUD/USD may find the initial support at the 11-week low of 0.6833.
- The 14-day Relative Strength Index hovers near 43, suggesting mild bullish pressure.
- The pair tests the immediate barrier at the nine-day EMA of 0.6918.
AUD/USD holds gains after two days of losses, trading around 0.6910 during the Asian hours on Monday. The technical analysis of the daily chart indicates that the pair remains within a descending wedge pattern, suggesting that selling pressure is gradually weakening as lower highs and lower lows converge. This structure often reflects a loss of bearish momentum, increasing the likelihood of a bullish breakout.
However, the 14-day Relative Strength Index (RSI) is around 43, suggesting a bearish bias, with momentum slipping below the midline after failing to sustain earlier strength. Moreover, the near-term bias is bearish as the AUD/USD pair holds below the nine-day Exponential Moving Average (EMA) and the flatter 50-day EMA.
The initial support lies at the 11-week low of 0.6833, which was recorded on March 30, followed by the lower boundary of the descending wedge around 0.6810. A break below the wedge would strengthen the bearish bias and open the doors for the AUD/USD pair to navigate the region around a deeper 0.6400 rebound support zone.
The AUD/USD pair could find the immediate barrier at the nine-day EMA of 0.6918, followed by the 50-day EMA at 0.6958 around the upper boundary of the wedge. A sustained break above this confluence resistance zone would lead the pair to test the 0.7187, the highest since June 2022, reached on March 11.
(The technical analysis of this story was written with the help of an AI tool.)
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.02% | -0.09% | -0.05% | -0.05% | -0.15% | -0.14% | 0.09% | |
| EUR | 0.02% | -0.04% | -0.06% | 0.00% | -0.14% | -0.14% | 0.09% | |
| GBP | 0.09% | 0.04% | -0.02% | -0.00% | -0.09% | -0.10% | 0.16% | |
| JPY | 0.05% | 0.06% | 0.02% | 0.02% | -0.11% | -0.11% | 0.13% | |
| CAD | 0.05% | -0.00% | 0.00% | -0.02% | -0.10% | -0.10% | 0.14% | |
| AUD | 0.15% | 0.14% | 0.09% | 0.11% | 0.10% | -0.01% | 0.24% | |
| NZD | 0.14% | 0.14% | 0.10% | 0.11% | 0.10% | 0.01% | 0.26% | |
| CHF | -0.09% | -0.09% | -0.16% | -0.13% | -0.14% | -0.24% | -0.26% |
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 Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
- USD/JPY edges down to near 159.55 as the US Dollar ticks lower.
- US President Trump promises an assault on Iran if it doesn’t reopen the Strait of Hormuz.
- Investors await the US ISM Services PMI data for March.
The USD/JPY pair trades marginally down at around 159.55 during the Asian trading session on Monday. The pair shows a subdued performance as the US Dollar (USD) ticks lower, while broadly remaining firm due to threats from United States (US) President Donald Trump that he will destroy Iranian infrastructure if it doesn’t agree to a deal.
During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades marginally lower to near 100.15.
Over the weekend, US President Trump promised “hell” for Iran’s power plants and bridges, through a post on Truth.Social, if Tehran doesn’t reopen the Strait of Hormuz before the deadline, which is Tuesday, April 7, at 9:00 PM Eastern time.
On the macro front, investors await the US ISM Services PMI data for March, which will be released at 14:00 GMT. The Services PMI is expected to arrive lower at 55.0 from 56.1 in February.
Meanwhile, fears of escalating Middle East war have also improved the safe-haven demand of the Japanese Yen (JPY).
USD/JPY technical analysis
USD/JPY ticks lower at around 159.55 as of writing. However, the near-term bias is bullish as price holds within an ascending channel and consolidates beneath the upper boundary. The pair trades above the 20-day exponential moving average around 158.90, which underpins the advance and aligns with the pattern of higher lows along the channel floor near 158.10.
The 14-day Relative Strength Index (RSI) has shifted into the 40.00-60.00 zone, indicating positive, though not extreme, momentum that supports ongoing upside pressure while the channel structure is respected.
Initial resistance emerges at 160.45, the recent swing high, with the channel top near 161.00 as the next barrier to extended gains. A clear break above the latter would open the way toward higher psychological levels beyond 162.00. On the downside, immediate support is seen at the 20-day EMA near 158.90, ahead of the channel base around 158.10, which defines the lower boundary of the current uptrend. A daily close below 158.10 would weaken the bullish structure and expose deeper retracement levels toward the mid-157.00s.
(The technical analysis of this story was written with the help of an AI tool.)
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
- Gold kicks off the new week on a weaker note, though it lacks follow-through and bounces off $4,600.
- Inflationary concerns bolster bets for higher interest rates globally and undermine the precious metal.
- The USD preserves its bullish bias and turns out to be another factor exerting pressure on the bullion.
Gold (XAU/USD) struggles to capitalize on Friday's goodish recovery from the vicinity of the $4,550 level and kicks off the new week on a weaker note. This marks the second straight day of a negative move and is sponsored by prospects for higher interest rates globally, which tends to undermine the non-yielding bullion. Adding to this, a modest US Dollar (USD) strength turns out to be another factor exerting pressure on the commodity, though the lack of follow-through selling warrants caution for bearish traders.
Investors now seem convinced that the war-driven surge in energy prices would revive inflationary pressures and force major central banks, including the US Federal Reserve (Fed), to adopt a more hawkish stance. In fact, Crude Oil prices advanced to a nearly four-week high on Monday in reaction to US President Donald Trump's threat to target Iran’s power plants and bridges if the Strait of Hormuz is not reopened by Tuesday. Adding to this, Tehran also outlined a new condition and said that the transit through the strategic waterway could resume if part of the revenue is allocated to compensate Iran for war-related damages.
Moreover, Ali Akbar Velayati, an advisor to Iran’s new Supreme Leader, Mojtaba Khamenei, warned that the resistance front could target the Bab el-Mandeb Strait in the Red Sea—another critical chokepoint. This raises the risk of a further disruption to global trade routes and remains supportive of elevated Crude Oil prices. Meanwhile, the upbeat US Nonfarm Payrolls (NFP) report released on Friday signaled a still resilient labor market and boosted speculation that the Fed will hold rates higher for longer to combat inflation. The outlook, in turn, benefits the USD, which contributes to the offered tone around the Gold price.
The XAU/USD pair, however, holds above Friday's swing low and finds decent support near the $4,600 mark. Hence, it will be prudent to wait for strong follow-through selling and acceptance below the said handle before confirming that the recent goodish rebound from the $4,100 mark, or a four-month low touched in March, has run out of steam. Traders now look forward to the release of the US ISM Services PMI for some impetus later during the North American session amid thin liquidity on the back of the Easter Monday Holiday in many global financial markets.
XAU/USD 4-hour chart
Gold remains vulnerable amid a bearish technical setup
From a technical perspective, the $4,600 mark coincides with the 38.2% Fibonacci retracement level of the March downfall and should act as a key pivotal point. The precious metal holds well below the 200-period Exponential Moving Average, keeping the broader trend under downside pressure. The Moving Average Convergence Divergence (MACD) line has slipped below its signal, and both fluctuate just under the zero line, with a negative histogram that suggests building selling momentum after the recent failure to sustain gains above $4,750.
Meanwhile, the Relative Strength Index (RSI) at 52 keeps a neutral stance, but its pullback from overbought territory reinforces the idea of fading upside pressure rather than fresh buying interest. In the meantime, immediate resistance emerges around $4,758, where the 50.0% retracement coincides with the latest swing high zone, while a recovery above that level would target the 200-period EMA near $4,791 and then the $4,913 region at the 61.8% Fibo. retracement. Only a clear move back above the EMA cluster would neutralize the current bearish bias.
On the downside, initial support aligns near the 38.2% Fibo. retracement, with a break there exposing a deeper pullback to the 23.6% retracement around $4,411. A sustained drop below that region would open the way toward the psychological $4,300 area.
(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.
- EUR/JPY may decline further as Japanese Yen strengthens on expectations the BoJ will tighten policy in April.
- The International Monetary Fund praised Japan’s economic resilience, backing gradual stimulus withdrawal.
- ECB’s Lagarde and policymakers reiterated that policy will stay restrictive until inflation sustainably returns to the 2% target.
EUR/JPY moves little after registering modest losses in the previous trading day, hovering around 183.80 during the Asian hours on Monday. The currency cross may extend its decline as the Japanese Yen (JPY) strengthens on growing expectations that the Bank of Japan (BoJ) will tighten policy in April to counter rising inflation driven by higher energy costs.
The International Monetary Fund (IMF) has backed the BoJ’s current path of rate hikes. Following a policy consultation on Friday, the IMF praised Japan’s economic resilience and supported a gradual withdrawal of monetary stimulus, with inflation projected to converge toward the 2% target by 2027.
However, the JPY faced pressure as oil prices surged after US President Donald Trump escalated threats against Iran. Japan remains particularly vulnerable to supply disruptions due to its heavy reliance on Middle East oil imports.
Trump issued a new deadline for Iran to reopen the Strait of Hormuz while intensifying threats against its power plants and civilian infrastructure. Iranian officials warned of reciprocal retaliation, targeting US-linked infrastructure, and stated the strait would stay closed until war damages are compensated.
Meanwhile, downside in the EUR/JPY cross may be limited as the Euro (EUR) finds support from the hawkish stance of the European Central Bank (ECB). ECB President Christine Lagarde and other policymakers have reiterated that policy will remain restrictive until inflation sustainably returns to the 2% target.
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
- AUD/JPY drifts higher to around 110.20 in Monday’s Asian session.
- The cross keeps a mildly bullish vibe, but further consolidation cannot be ruled out amid neutral RSI momentum.
- The first upside barrier emerges at 111.25; initial support is located at 110.00.
The AUD/JPY cross attracts some buyers to near 110.20 during the Asian trading hours on Monday. The Australian Dollar (AUD) edges higher against the Japanese Yen (JPY) on expectations of further interest rate hikes from the Reserve Bank of Australia (RBA).
However, the upside for the cross might be limited as escalating tensions in the Middle East could boost safe-haven demand for the JPY. Iran’s central military command on Monday warned of far more “devastating and widespread” retaliation if its adversaries hit civilian targets. The statement came after US President Donald Trump threatened to destroy Iran’s power plants and bridges if Tehran didn’t make a deal to fully reopen the Strait of Hormuz.
Technical Analysis:
In the daily chart, the near-term bias of AUD/JPY is mildly bullish as price holds above the rising 100-day exponential moving average near 107.35, extending the broader uptrend despite the latest pullback. The RSI eases to the midline, suggesting that further consolidation cannot be ruled out in the near term.
Immediate resistance emerges near the Bollinger middle band of 111.25. Above that, the next upside reference aligns near the March 19 high of 112.61, en route to the upper Bollinger Band of 113.65. On the downside, initial support is seen at the 110.00 psychological level. A deeper setback would target the lower limit of the Bollinger Band near 108.75, followed by the 100-day EMA around 107.35.
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.
- US Dollar Index gathers strength to around 100.25 in Monday’s Asian session.
- US NFP rose by 178,000 in March, stronger than expected; Unemployment Rate edged lower to 4.3%.
- The US March ISM Services PMI data is due later on Monday.
The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, currently trades near 100.25 during the Asian trading hours on Monday. The DXY edges higher on the stronger-than-expected US jobs data and heightened uncertainty in the Middle East.
Data released by the US Bureau of Labor Statistics (BLS) on Friday revealed that the US economy added 178,000 jobs in March, compared to a 133,000 decline (revised from -92,000) in February. This reading came in better than the estimations of a 60,000 gain. The Unemployment Rate edged lower to 4.3%, though that was largely from a sharp reduction in the labor force.
Following the upbeat jobs report, futures pointed to virtually no chance of a move at the April 28-29 Federal Open Market Committee (FOMC) meeting and a 77.5% probability the Fed will stay on hold through the end of the year, according to the CME FedWatch tool.
Rising tensions between the US and Iran might contribute to the US Dollar’s upside as a safe-haven asset. US President Donald Trump set a Tuesday deadline for Iran to reopen the Strait of Hormuz, threatening to hit the country’s power plants and bridges if it does not comply. Iran's foreign ministry spokesperson said that Tehran will reciprocate attacks on its infrastructure and target similar infrastructure owned by the US or related.
Traders brace for the US March ISM Services Purchasing Managers Index (PMI) data later on Monday. If the report shows a weaker-than-expected outcome, this could drag the DXY lower in the near term.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
- WTI attracts some intraday sellers following a modest Asian session rise to a nearly one-month peak.
- Rising geopolitical tensions and Fed rate hike bets support the USD, capping gains for the commodity.
- Supply disruption worries should act as a tailwind for Crude Oil prices and help limit further losses.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – struggles to capitalize on modest Asian session gains to the $106.45 region, or a nearly four-week high, and retreats to the lower end of its daily range in the last hour. The commodity slips below the $104.00 mark in the last hour, though the downside potential seems limited amid supply concerns.
Rising geopolitical tensions, along with growing bets for an interest rate hike by the US Federal Reserve (Fed), continue to act as a tailwind for the US Dollar (USD). A firmer buck caps the upside for the USD-denominated commodity. Meanwhile, US President Donald Trump threatened to target Iran’s power plants and bridges if the Strait of Hormuz is not reopened on Tuesday, while Iran introduced new conditions for reopening the strategic waterway. This raises the risk of a further disruption to global trade routes and should act as a tailwind for the black liquid.
From a technical perspective, the near-term bias is bullish against the backdrop of last week's rebound from the rising 100-period Exponential Moving Average (EMA) on the 4-hour chart and a breakout beyond the 100.00 psychological mark. This keeps the broader uptrend intact despite recent volatility. Furthermore, the latest Moving Average Convergence Divergence (MACD) reading has turned back up, with the line recovering into positive territory and the histogram improving, suggesting buyers are reasserting control after a brief loss of momentum.
Meanwhile, the Relative Strength Index (RSI) around 61 stays above its midline yet below overbought territory, indicating sustained upside pressure without signs of exhaustion. Hence, any subsequent pullback is likely to attract some buyers around $102.00, where recent intraday pullbacks have stabilized, followed by stronger support near $99.50. The rising 100-period EMA on the 4-hour chart, now clustered below $94.00, reinforces that deeper dips toward the low-$90s would be viewed as corrective while the indicator maintains its upward slope.
On the upside, initial resistance stands at the recent peak near $105.70, and a clear break above this area would open the way toward the $108.00 region next.
(The technical analysis of this story was written with the help of an AI tool.)
WTI 4-hour chart
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.
- Silver struggles as rising energy prices strengthen hawkish expectations for major central banks’ policy outlooks.
- Trump set a Tuesday deadline for Iran to reopen the Strait of Hormuz, escalating threats against its civilian infrastructure.
- Fed may delay rate cuts and could raise borrowing costs later this year if inflation remains persistently elevated.
Silver price (XAG/USD) holds losses for the third successive day, trading around $72.20 per troy ounce during the Asian hours on Monday. The non-interest-bearing Silver is under pressure as escalating Middle East tensions have driven a sharp rise in energy prices, reinforcing hawkish expectations for major central banks’ policy outlooks. The white metal has also failed to receive support from increased safe-haven demand, weighed down by forced liquidations as investors cover losses in other markets.
US President Donald Trump issued a fresh ultimatum to Iran, warning of strikes on its power plants and other civilian infrastructure if the Strait of Hormuz is not reopened. Trump threatened severe consequences, saying he would bring “hell” to Iran, and set a new deadline for Tuesday at 8 PM Eastern Time. Tehran has rejected the ultimatum and continues attacks on energy assets across the Middle East.
Markets are increasingly pricing in the US Federal Reserve (Fed) to delay rate cuts, with the possibility of higher borrowing costs later this year if inflation remains persistent. Investors now turn their focus to the latest Federal Open Market Committee (FOMC) Meeting Minutes for clearer signals on the policy path ahead.
Meanwhile, the Bank of England (BoE) unanimously kept the Bank Rate unchanged at 3.75% in March, pausing its recent easing cycle amid rising inflation risks linked to higher energy costs driven by Middle East tensions. Some analysts expect rate cuts to be pushed back until late 2026 or even 2027, while others warn that a pre-emptive rate hike remains possible if inflation expectations become unanchored. Moreover, European Central Bank (ECB) President Christine Lagarde and other Governing Council members have reiterated that policy will stay restrictive until inflation sustainably returns to the 2% target.
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.
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