Tag: Currencies

  • US inflation and jobs data take centre stage

    US inflation and jobs data take centre stage


    Finally, the Greenback managed to regain some composure and clocked acceptable gains following multi-month lows. The broader scenario, however, remained clouded by intense tariff uncertainty as well as fears of a US recession.

    Here is what you need to know on Thursday, March 13:

    The US Dollar Index (DXY) set aside part of the multi-day deep sell-off, retesting the 103.80 zone amid rising yields. Producer Prices will be in the spotlight seconded by the usual Initial Jobless Claims.

    EUR/USD met some resistance and receded to the sub-1.0900 region in response to the mild bounce in the US Dollar. Industrial Production in the euro area will be published along with speeches by the ECB’s De Guindos, Nagel and Villeroy.

    GBP/USD pushed harder and came just pips away from the key 1.3000 threshold, just to give away some impulse afterwards. The RICS House Price Balance will be the sole release across the Channel.

    USD/JPY added to Tuesday’s uptick, climbing to multi-day highs and briefly surpassing the 149.00 barrier. The weekly Foreign Bond Investment figures are due.

    Despite tariff concerns and the uptick in the US Dollar, AUD/USD rose further north of the 0.6300 hurdle, hitting two-day peaks at the same time. The final Building Permits and Private House Approvals are expected, followed by the speech by the RBA’s Jones.

    Prices of WTI rose to three-day highs near the $68.00 mark per barrel despite the ounce in the US Dollar and persistent trade war concerns.

    Gold prices advanced to two-week tops around $2,940 per troy ounce following tariff jitters and the lower-than-expected US CPI print. Silver prices rose past the $33.00 mark per ounce, coming just short of the yearly peak.



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  • FX option expiries for Mar 11 NY cut

    FX option expiries for Mar 11 NY cut


    FX option expiries for Mar 11 NY cut at 10:00 Eastern Time via DTCC can be found below.

    EUR/USD: EUR amounts

    • 1.0625 1.3b
    • 1.0635 801m
    • 1.0750 972m
    • 1.0885 1.5b

    GBP/USD: GBP amounts     

    USD/JPY: USD amounts                                 

    USD/CHF: USD amounts     

    AUD/USD: AUD amounts

    • 0.6275 932m
    • 0.6300 843m
    • 0.6385 2.7b

    USD/CAD: USD amounts       

    • 1.4265 768m
    • 1.4470 697m
    • 1.4570 690m

    NZD/USD: NZD amounts

    EUR/GBP: EUR amounts        



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  • US Dollar sees some gains on a quiet start of the week

    US Dollar sees some gains on a quiet start of the week


    • DXY stalls around 103.95 as market sentiment remains fragile.
    • Traders eye Wednesday’s US CPI data for fresh market direction.
    • Nasdaq slides 3.3%, dragging broader equities lower.

    The US Dollar (USD) remains under pressure on Monday, with DXY hovering around 103.95, struggling to find traction after last week’s steep decline. Federal Reserve (Fed) Chair Jerome Powell’s latest remarks on Friday reassured markets that the central bank sees no urgent need to adjust policy at the moment, though economic uncertainties are growing. Meanwhile, the Nasdaq is facing heavy market losses, down 3.3%, as investors remain cautious ahead of key United States (US) inflation data due midweek.

    Daily digest market movers: Fed in focus as CPI looms

    • Market participants are bracing for the release of February’s Consumer Price Index (CPI) on Wednesday, expected to provide key insights into inflation trends.
    • The Federal Reserve enters its blackout period ahead of the March 19 meeting, limiting central bank commentary for the week.
    • Fed Chair Jerome Powell reiterated on Friday that the Fed remains patient and does not see an urgent need to act, preferring to wait for additional economic data before making any policy changes.
    • US equities face a sharp correction, with the Nasdaq leading losses, down 3.3%.
    • CME FedWatch Tool indicates a majority expectation for rates to remain at current levels in May, while June rate cut expectations have risen significantly.
    • Ahead of the blackout media period, the Fed’s sentiment index on the daily chart has fallen towards neutral ground, which could also explain the USD’s decline.

    DXY technical outlook: Testing support near 103.50

    The US Dollar Index (DXY) stabilizes below 104.00, consolidating after last week’s steep drop. The 20-day and 100-day Simple Moving Averages (SMA) confirmed a bearish crossover near 107.00, reinforcing the negative trend. The Relative Strength Index (RSI) remains near oversold territory, signaling potential for a short-term rebound. Meanwhile, the Moving Average Convergence Divergence (MACD) remains bearish, suggesting further downside risk unless buyers step in near support levels. If DXY fails to reclaim 104.50, the next support is seen near 103.30, which could determine whether a deeper decline unfolds.

    Fed FAQs

    Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

    The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

    In extreme situations, the Federal Reserve may resort to a policy named 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 during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

    Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.

     



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  • No surprises expected at the ECB meeting

    No surprises expected at the ECB meeting


    The downtrend in the US Dollar gathered extra steam on Wednesday, fuelled by concerns over the US economy and some renewed hopes that the Trump administration could delay some planned tariffs.

    Here is what you need to know on Thursday, March 6:

    The US Dollar Index (DXY) broke below the 105.00 support, reaching news four-month lows amid further concerns over the US economy. The January Balance of Trade results are due, seconded by Challenger Job Cuts, the usual weekly Initial Jobless Claims, and Unit Labor Costs. In addition, the Fed’s. Waller and Harker are due to speak.

    EUR/USD extended its solid performance to the vicinity of the 1.0800 barrier, or new four-month peaks. The ECB’s interest rate decision will take centre stage, along with Lagarde’s press conference. Data wise, the HCOB Construction PMI in Germany and the euro area will be released along with Retail Sales in the whole bloc.

    GBP/USD climbed to just pips away from the key barrier at 1.2900 the figure, or multi-month tops. The S&P Global Construction PMI will be the sole release across the Channel, followed by the speech by the BoE’s Mann.

    USD/JPY resumed its downtrend and revisited the low-148.00s following the sharp pullback in the Greenback. The weekly Foreign Bond Investment figures will be published.

    AUD/USD rose markedly, advancing for the third straight day and reclaiming the area beyond the 0.6300 hurdle. The Balance of Trade results are expected, seconded by flash prints of Building Permits and Private House Approvals.

    Prices of the barrel of WTI dropped to new lows near the $65.00 mark in response to an increased in US crude oil supplies, tariff concerns and the expected OPEC+ intention to increase the oil output in April.

    Gold prices hit their third straight day of gains, retesting the $2,920 zone following the sharp decline in the US Dollar. Silver prices rallied further north of the $32.00 mark per ounce, flirting with eight-day highs.



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  • President Trump’s Capitol address: The agenda takes shape

    President Trump’s Capitol address: The agenda takes shape


    United States (US) President Donald Trump will address Congress from the US Capitol at around 02:00 GMT Wednesday, marking his first appearance before lawmakers since retaking the White House. He’s expected to outline his vision for a wide range of domestic and foreign policy initiatives.

    In his second term, President Trump has wasted no time getting started. He’s signed a series of executive orders in just a few weeks and he promises even more are on the way. During his inaugural speech, he declared that “the golden age of America” had arrived, identifying immigration, trade and national security as top priorities.

    On the international front, the President recently held a turbulent Oval Office meeting with Ukrainian President Volodymyr Zelensky. Following that meeting, he announced a pause on military aid to Ukraine.

    Turning to trade, another round of tariffs went into effect on March 4. Tariffs on Chinese imports have doubled to 20%, while imports from Canada and Mexico now face a 25% tariff (with a lower 10% rate for Canadian energy). President Trump also revealed plans to impose tariffs on “external” agricultural products starting April 2, along with automobile tariffs and country-by-country reciprocal tariffs set to begin the same day.



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  • Japan is not pursuing so-called currency devaluation policy

    Japan is not pursuing so-called currency devaluation policy


    Japanese Prime Minister (PM) Shigeru Ishiba said on Tuesday that “Japan is not pursuing so-called currency devaluation policy.”

    Ishiba further noted that they “have had no phone call from US President Trump regarding forex policy.”

    Market reaction

    The Japanese Yen (JPY) is recovering some ground against the US Dollar (USD) following these comments. At the press time, USD/JPY is down 0.25% on the day at 149.11.

     



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  • US Dollar tumbles as Ukraine peace talks gain traction

    US Dollar tumbles as Ukraine peace talks gain traction


    • DXY erases Friday’s gains, slipping as European leaders back Ukraine peace deal guarantees.
    • US Manufacturing PMI beats estimates, while ISM Manufacturing PMI misses expectations.
    • Bond yields edge lower, reinforcing expectations of Fed rate cuts later in 2025.
    • Technical indicators suggest further downside as key moving averages converge near 107.00.

    The US Dollar Index (DXY), which tracks the performance of the Greenback against a basket of six major currencies, is diving sharply on Monday as optimism surrounding a potential Ukraine peace deal weighs on safe-haven demand. European leaders have signaled their willingness to back security guarantees for Ukraine, boosting risk sentiment across global markets.

    Meanwhile, United States (US) economic data provided mixed signals. The ISM Manufacturing PMI missed forecasts, while the S&P Global Manufacturing PMI came in stronger than expected. As a result, DXY slides back from last week’s highs, undoing Friday’s advance. Regarding tariffs, Trump was on the wires on Monday during the American session and reiterated its plan to double Chinese tariffs from 10% to 20%, but had little impact on the USD.

    Daily digest market movers: US Dollar plunges as geopolitical optimism lifts sentiment, US data comes mixed

    • DXY tumbles as investors reduce safe-haven exposure amid Ukraine peace deal optimism. This came after several European leaders cooled down the jitters after Friday’s heated conversations between the American and Ukrainian presidents.
    • On the data front, S&P Global’s final Manufacturing PMI for February exceeded estimates at 52.7, strengthening from the preliminary reading.
    • ISM Manufacturing PMI came in at 50.3, slightly below the 50.5 forecast and down from January’s 50.9.
    • The ISM Prices Paid subindex spiked to 62.4, surpassing estimates and accelerating from January’s 54.9.
    • New Orders component dropped to 48.6, reflecting a significant decline from 55.1 in January.
    • As a reaction, Wall Street trades mixed, with major US indices posting marginal gains and losses. US Treasury yields drift lower, extending the downtrend from last week’s highs.
    • The CME FedWatch Tool indicates an increasing probability of a Fed rate cut in June, though some odds still favor steady rates.

    DXY technical outlook: Bearish crossover looms as downside momentum builds

    The US Dollar Index (DXY) turns lower, slipping below the 20-day and 100-day Simple Moving Averages (SMA), which are nearing a bearish crossover around the 107.00 level. Momentum indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are reinforcing the negative outlook. Key support levels emerge at 106.00 and 105.50, while 107.00 remains the first resistance level should the index attempt a rebound. However, with fundamental and technical factors aligning to the downside, further weakness is likely in the short term.

    US-China Trade War FAQs

    Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.

    An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.

    The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.

     



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  • US Dollar gets some air ahead of GDP and PCE data

    US Dollar gets some air ahead of GDP and PCE data


    • US Dollar Index stabilizes around 106.40, hovering near its lowest levels of 2025.
    • Traders anticipate rate cuts, with Fed bets now pricing in two reductions for 2025.
    • US President Trump confirms 25% tariffs on Canada, Mexico, and the EU but delays implementation until April.
    • Markets await the Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge, on Friday.

    The US Dollar Index (DXY), which tracks the performance of the US Dollar against a basket of six major currencies, is attempting a modest recovery on Wednesday but remains near yearly lows at 106.50. Traders continue to weigh increased Federal Reserve (Fed) rate cut expectations and the latest tariff developments from US President Donald Trump.

    Daily digest market movers: US Dollar steadies as tariff tensions rise

    • The US Dollar stabilizes around 106.40 as traders digest escalating tariff risks and growing Fed rate cut expectations.
    • On the tariff front, President Trump confirms 25% tariffs on Canada, Mexico, and the EU but delays their implementation until April.
    • On the Fed front, markets now expect two rate cuts in 2025, marking a shift from previous Fed guidance.
    • Traders await Friday’s Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge.
    • Personal income and spending reports due this week could further shape market expectations.
    • US Q4 GDP figures will provide insights into the economy’s momentum heading into 2025.

    DXY technical outlook: Bulls struggle to gain control

    The US Dollar Index is attempting to recover above 106.50, but momentum remains fragile. The 100-day Simple Moving Average (SMA) at 106.60 is proving a key resistance level, with technical indicators still favoring bearish conditions.

    The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) both signal persistent downside pressure. If the DXY fails to reclaim 106.60, further declines toward 106.00 could materialize. Bulls need stronger catalysts to regain control, with the 107.00 level serving as the next key upside barrier.

    Inflation FAQs

    Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.

    The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.

    Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.

    Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.

     



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  • US data and Fedspeak come to the fore

    US data and Fedspeak come to the fore


    The US Dollar kicked off the new trading week slightly on the defensive, managing to rebound from fresh multi-week lows amid tariff concerns, lower yields, and renewed jitters on the health of the US economy.

    Here is what you need to know on Tuesday, February 25:

    The US Dollar Index (DXY) dropped to new two-month lows, trading at shouting distance from the key support at the 106.00 mark. The Consumer Confidence gauged by the Conference Bord will take centre stage seconded by the FHFA’s House Price Index, The Richmond Fed Manufacturing Index, and the API’s weekly report on US crude oil inventories. In addition, the Fed’s Logan, Barr and Barkin are due to speak.

    EUR/USD briefly surpassed the 1.0500 barrier on fresh optimism following the results of the German election on Sunday. The final Q4 GDP Growth Rate in Germany will be at the centre of the debate, along with the ECB’s Negotiated Wage Growth and the speech by the ECB’s Nagel.

    GBP/USD resumed its uptrend on Monday, rising to new highs in levels closer to the 1.2700 hurdle. The CBI Distributive Trades will be the only data release across the Channel, seconded by the speech by the BoE’s Pill.

    After three daily pullbacks in a row, USD/JPY finally regained the smile and charted decent gains to the proximity of the key 150.00 barrier. Next on tap on the Japanese calendar will be the final prints of the December Coincident Index and Leading Economic Index.

    AUD/USD treaded water around 0.6350 following an unsuccessful attempt to hit the 0.6400 level earlier in the day. The RBA’s Jones will speak on Tuesday, while the RBA’s Monthly CPI Indicator, and Construction Done figures, are expected on February 26.

    Once again, supply concerns lent some much-needed oxygen to crude oil prices, prompting the barrel of American WTI to clock acceptable gains above the $70.00 mark.

    Prices of Gold advanced to a record high closer to $2,960 per ounce troy on the back of intense uncertainty surrounding US tariffs. Silver prices added to Friday’s pullback, reaching multi-day lows near the £2.00 mark per ounce.

     



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  • Bulls pause as pair faces key technical test

    Bulls pause as pair faces key technical test


    • EUR/USD slips to 1.0450 on Tuesday, cooling off after last week’s strong rally.
    • RSI declines sharply to 55, signaling waning bullish momentum while MACD remains flat with green bars.
    • The 20-day and 100-day SMAs are converging near 1.0450, raising concerns over a potential bearish crossover.

    EUR/USD took a step back on Tuesday, shedding 0.32% to trade near 1.0450 as bulls lost some ground after last week’s impressive rally. The pair remains above the 20-day Simple Moving Average (SMA), keeping the broader outlook constructive for now. However, the latest price action suggests that buying momentum is fading.

    Technical indicators reflect this shift. The Relative Strength Index (RSI) has sharply declined to 55, showing weakening bullish traction, while the Moving Average Convergence Divergence (MACD) histogram remains flat with green bars, highlighting hesitation among buyers. A key technical factor to watch is the 20-day and 100-day SMA convergence around 1.0450. If a bearish crossover materializes, it could invalidate recent gains and reinforce a downside bias.

    For now, as long as EUR/USD holds above the 20-day SMA, buyers still have a chance to push higher. However, a sustained break below this level would expose the pair to further losses, with immediate support at 1.0420 and deeper downside risks toward 1.0380.

    EUR/USD daily chart



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  • NZD/USD advances to two-month peak, around mid-0.5700s amid weaker USD

    NZD/USD advances to two-month peak, around mid-0.5700s amid weaker USD


    • NZD/USD gains positive traction for the third straight day amid sustained USD selling.
    • The divergent Fed-RBNZ expectations warrant caution for aggressive bullish traders. 
    • Last week’s breakout above the 0.5700 mark supports prospects for additional gains.

    The NZD/USD pair attracts buyers for the third successive day on Monday and climbs to a two-month peak, around the 0.5750 area during the Asian session amid the prevalent US Dollar (USD) selling bias. 

    The global risk sentiment gets a minor lift from the latest optimism led by US President Donald Trump’s approach to ending the protracted Russia-Ukraine war. Apart from this, a delay in Trump’s reciprocal tariffs keeps the USD depressed near its lowest level since 17 touched on Friday and acts as a tailwind for the NZD/USD pair. 

    The Greenback is further undermined by Friday’s disappointing US Retail Sales, which dropped by the most in nearly two years in January. In fact, The US Census Bureau reported that Retail Sales declined by 0.9% during the reported month, worse than the decrease of 0.1% expected and the 0.7% increase (revised from 0.4%) in December. 

    That said, the growing acceptance that the Federal Reserve (Fed) would stick to its hawkish stance amid still-sticky inflation could help limit further USD losses. Apart from this, the increasing likelihood that the Reserve Bank of New Zealand (RBNZ) will deliver a third supersized rate cut later this month might cap the NZD/USD pair. 

    From a technical perspective, last week’s breakout through the 0.5700 round figure favors bullish traders and supports prospects for a further near-term appreciating move for spot prices. Hence, any corrective pullback might still be seen as a buying opportunity and remain limited ahead of the crucial RNNZ meeting on Wednesday.

    New Zealand Dollar FAQs

    The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

    The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

    Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

    The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.

     



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  • Surges as US yields rise, eyes on 200-day SMA

    Surges as US yields rise, eyes on 200-day SMA


    • USD/JPY rebounds 0.35% from 151.64 low, driven by bond yield movements.
    • Technical analysis hints at bullish shift; resistance near 200-day SMA at 152.76.
    • Downside risks if SMA not surpassed; supports at 152.00 and 150.93 in focus.

    The USD/JPY climbed during the North American session. It trades at 152.52 and posts gains of over 0.35% after hitting a daily low of 151.64. The rise of the US 10-year T-note bond yield spurred the rise of the pair, which is positively correlated to the yield of the 10-year.

    USD/JPY Price Forecast: Technical outlook

    The USD/JPY remains biased downward, even though buyers could challenge the 200-day Simple Moving Average (SMA) at 152.76. The momentum shifted slightly bullish even though the relative strength index (RSI) remains bearish, and the slope aims upwards.

    If buyers regain the 200-day SMA, the following key resistance would be the 153.00 mark before testing the Senkou Span B base at 153.76.

    On the other hand, if USD/JPY stays below the 200-day SMA, the first support would be the 152.00 figure. Further losses lie below the February 7 daily low of 150.93, followed by the December 3 swing low of 148.64.

    USD/JPY Price Chart – Daily

    Japanese Yen PRICE Today

    The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Swiss Franc.

      USD EUR GBP JPY CAD AUD NZD CHF
    USD   -0.53% -0.60% 0.30% -0.16% -0.28% -0.23% 0.16%
    EUR 0.53%   -0.08% 0.85% 0.39% 0.25% 0.30% 0.70%
    GBP 0.60% 0.08%   0.93% 0.46% 0.31% 0.36% 0.76%
    JPY -0.30% -0.85% -0.93%   -0.45% -0.59% -0.53% -0.14%
    CAD 0.16% -0.39% -0.46% 0.45%   -0.13% -0.08% 0.31%
    AUD 0.28% -0.25% -0.31% 0.59% 0.13%   0.05% 0.44%
    NZD 0.23% -0.30% -0.36% 0.53% 0.08% -0.05%   0.39%
    CHF -0.16% -0.70% -0.76% 0.14% -0.31% -0.44% -0.39%  

    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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

     



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  • PBOC sets USD/CNY reference rate at 7.1707 vs. 7.1699 previous

    PBOC sets USD/CNY reference rate at 7.1707 vs. 7.1699 previous


    On Monday, the People’s Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead at 7.1707 as compared to Friday’s fix of 7.1699 and 7.3050 Reuters estimates.

    PBOC FAQs

    The primary monetary policy objectives of the People’s Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.

    The PBoC is owned by the state of the People’s Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.

    Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.

    Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.

     



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  • Canadian Dollar flattens ahead of key labor prints

    Canadian Dollar flattens ahead of key labor prints


    • The Canadian Dollar churned on Thursday, holding flat against the Greenback.
    • PMI figures from Canada contracted sharply in January, limiting Loonie gains.
    • Key US NFP and Canadian employment figures are due on Friday.

    The Canadian Dollar (CAD) spun in a tight circle on Thursday, churning chart paper near 1.4300 against the US Dollar (USD) as markets gear up for another Nonfarm Payrolls (NFP) Friday. Markets are treading water near familiar levels as investors shrug off the early week’s trade war fears and resume focusing on hopes for future Federal Reserve (Fed) rate cuts.

    Canadian Purchasing Managers Index (PMI) figures for January sharply missed the mark on Thursday. Canadian Net Change in Employment and Average Hourly Wages numbers are due on Friday but will be overshadowed by the much larger US NFP jobs data package.

    Daily digest market movers: Canadian Dollar flattens ahead of NFP

    • The Canadian Dollar has fought back from 21-year lows this week, but remains trapped in familiar consolidation territory against the Greenback.
    • Canada’s Ivey PMI for January contracted sharply on a seasonally adjusted basis, falling to a four-year low of 47.1.
    • US tariffs on Mexico and Canada have been kicked down the road by another 30 days, and market tensions are loosening for the time being. 
    • US tariffs on China are still in place, as are reciprocal tariffs on the US from China, but these tit-for-tat import fees are largely symbolic and markets are expected to circumvent them quickly.
    • Canada is expected to add far fewer jobs in January compared to December, down to 25K from 90.9K, and the Canadian Unemployment rate is forecast to tick up to 6.8% from 6.7%.
    • Friday’s US NFP is likewise expected to shift lower to 170K net new jobs additions from 256K, but bumper labor prints from earlier in the week could signal an upside surprise.

    Canadian Dollar price forecast

    With key data due to wrap up the trading week, the Canadian Dollar is stuck back in familiar consolidation territory against the US Dollar. USD/CAD remains hung up on the 1.4300 handle, at the bottom end of a choppy sideways grind that has kept the pair traveling horizontally since mid-December.

    The Loonie tumbled early this week to a 21-year low against the Greenback, sending USD/CAD to a two-decade high near 1.4800, but the move was unsustainable and the pair is now back to its middling ways. Price action is drawing into the midrange at the 50-day Exponential Moving Average (EMA), and it will take a material shift in markets to punch in new technical levels.

    USD/CAD daily chart

    Canadian Dollar FAQs

    The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

    The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

    The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

    While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

    Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.

     



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  • Australian Dollar defends its ground despite tariffs-related cautious market mood

    Australian Dollar defends its ground despite tariffs-related cautious market mood


    • AUD/USD hovers above 0.6200, defending mild bids amid US tariff concerns and weak Chinese data.
    • US PCE data showed no surprises, Fed remains cautious.
    • RBA dovish bets continue to pressure the pair.

    The Australian Dollar clings to mild gains on Friday, trading around 0.6215 after briefly touching a two-week low. The pair remains under pressure as US President Donald Trump reaffirmed plans to impose tariffs on Chinese imports, dampening risk sentiment.

    Meanwhile, speculation over a potential rate cut by the Reserve Bank of Australia (RBA) in February and ongoing economic struggles in China continue to weigh on the Aussie.

    Daily digest market movers: Aussie struggles on US tariffs concerns

    • US confirms 25% tariffs on Canada and Mexico, 10% on China, effective February 1.
    • US Dollar retreats as weak economic data erases weekly gains, pushing the DXY lower from its peak near 108.00.
    • China’s PMI data disappoints with manufacturing contracting and services barely expanding, pressuring the Aussie.
    • Iron ore prices hit yearly highs, offering mild support to AUD despite concerns over China’s weak demand.
    • Markets consider that the RBA cutting rates in February is a done deal, which is also weakening the Aussie.
    • On the US data front, the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation measure, rose by 0.3% MoM in December, following a 0.1% increase in November.
    • On an annual basis, the PCE inflation rate increased to 2.6% from the previous month’s 2.4%. The core PCE, which excludes food and energy prices, remained steady at 2.8% YoY for the third consecutive month.
    • Markets are expecting no rate cut by the Fed in March.

    Technical outlook: AUD/USD struggles for direction

    AUD/USD remains confined within a narrow range, facing resistance near 0.6230 while holding support at 0.6200. The Relative Strength Index (RSI) stands at 42 in negative territory, reflecting a lack of clear directional momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram prints decreasing green bars, suggesting fading bullish strength.

    Despite recent recovery attempts, the Aussie’s upside potential appears limited. A break below 0.6200 could trigger further losses, while a move above 0.6230 may offer short-term relief.

     

    Tariffs FAQs

    Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

    Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

    There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

    During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

     



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  • Investors’ focus shifts to the ECB meeting and data

    Investors’ focus shifts to the ECB meeting and data


    The US Dollar traded in a positive fashion after the Fed left its interest rates unchanged, as widely anticipated, and Chief Powell delivered a neutral message at his press conference.

    Here is what you need to know on Thursday, January 30:

    The US Dollar Index (DXY) kept the weekly bid bias in place helped by rising yields and Powell’s tone. Another revision of Q4 GDP Growth Rate is due seconded by the weekly Initial Jobless Claims, and Pending Home Sales.

    EUR/USD dropped to the sub-1.0400 region, or four-day lows, in response to further strength in the Greenback and prudence ahead of the ECB event on Thursday. The ECB meeting and press conference by President C. Lagarde will take centre stage, followed by preliminary Q4 GDP Growth Rate prints in Germany and the broader Euroland, as well as EMU’s Unemployment Rate, Consumer Confidence and Economic Sentiment.

    GBP/USD rebounded from lows in the sub-1.2400 region, eventually ending the day around Tuesday’s closing levels. The BoE’s M4 Money Supply and Consumer Credit figures are expected along with Mortgage Approvals and Mortgage Lending.

    USD/JPY remained choppy, trading just above the 155.00 hurdle and fading part of Tuesday’s advance. The usual weekly Foreign Bond Investment figures will be released followed by the speech by the BoJ’s Himino.

    AUD/USD retreated for the third consecutive day, this time putting the 0.6200 support to the test. Export and Import Prices in Australia are due along with the speech by the RBA’s Jones.

    WTI resumed its bearish leg and broke below the $73.00 mark per barrel to flirt with fresh four-week lows.

    Gold prices faced renewed downside pressure, briefly revisiting the $2,750 zone per ounce troy following USD dynamics and the FOMC gathering. Silver prices added to Tuesday’s advance and flirted with multi-day peaks near the $31.00 mark per ounce.



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  • Surges as US yields rise, eyes on 200-day SMA

    Will closely monitor the impact of rate hike on economy


    Japan’s Economy Minister Ryosei Akazawa said on Tuesday that he ”will closely monitor the impact of the rate hike on the economy.”

    Separately, the Bank of Japan (BoJ) announced that it would provide JPY200 billion through the outright purchase of commercial paper.

    The Japanese central bank added that it would supply the US Dollar (USD) funds against pooled collateral.

    Market reaction

    USD/JPY is off the high but stays firm near 155.30 following these headlines, still up 0.50% on the day.

    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.

     



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