Forex News Timeline

Tuesday, February 18, 2025

GBP/JPY halts its three-day losing streak, trading around 191.50 during the early European hours on Tuesday.

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The currency cross finds fresh demand on the release of the employment data from the United Kingdom (UK). The Office for National Statistics (ONS) reported on Tuesday that the ILO Unemployment Rate held steady at 4.4% in the three months leading up to December, aligning with previous figures. Market expectations had anticipated a slight increase to 4.5%. Claimant Count Change, showing that the number of people claiming jobless benefits, climbed by 22K in January, compared with a revised drop of 15.1K in December, missing the estimated 10K figure. The Employment Change data for December came in at 107K versus November’s 35K. The GBP/JPY cross also appreciates as the Japanese Yen (JPY) loses ground amid increased market optimism due to the postponement of the implementation of US President Donald Trump's reciprocal tariffs. However, the Japanese Yen may regain its ground amid increased hawkish sentiment surrounding the Bank of Japan’s (BoE) policy outlook, driven by a robust Japan’s Gross Domestic Product (GDP) report that exceeded expectations. Markets are now pricing-in an additional 37 basis points rate increase by the Bank of Japan in 2025, driving the yield on the benchmark 10-year Japanese government bond to its highest level since April 2010. Economic Indicator ILO Unemployment Rate (3M) The ILO Unemployment Rate released by the UK Office for National Statistics is the number of unemployed workers divided by the total civilian labor force. It is a leading indicator for the UK Economy. If the rate goes up, it indicates a lack of expansion within the UK labor market. As a result, a rise leads to a weakening of the UK economy. Generally, a decrease of the figure is seen as bullish for the Pound Sterling (GBP), while an increase is seen as bearish. Read more. Last release: Tue Feb 18, 2025 07:00 Frequency: MonthlyActual: 4.4%Consensus: 4.5%Previous: 4.4%Source: Office for National Statistics Why it matters to traders? The Unemployment Rate is the broadest indicator of Britain’s labor market. The figure is highlighted by the broad media, beyond the financial sector, giving the publication a more significant impact despite its late publication. It is released around six weeks after the month ends. While the Bank of England is tasked with maintaining price stability, there is a substantial inverse correlation between unemployment and inflation. A higher than expected figure tends to be GBP-bearish.  

Switzerland Industrial Production (YoY): 2.3% (4Q) vs previous 3.5%

The EUR/GBP cross edges lower to near 0.8295 during the early European trading hours on Tuesday.

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Data released by the UK Office for National Statistics on Tuesday showed that the country’s ILO Unemployment Rate remained steady at 4.4% in the three months to December. This figure beated the expectations of 4.5% during the reported period. Meanwhile, the Claimant Count Change increased by 22K in January versus -15.1K prior (revised from 0.7K), missing the estimated 10K figure. The GBP remains firm in an immediate reaction to the mixed UK employment report. 

Earlier this month, the BoE cut its benchmark interest rate to 4.50% from 4.75%. The UK central bank policymakers said inflation was likely to hit 3.7% later this year, almost double the BoE's 2% target. This might trigger the BoE to add the word "careful" to its message about a likely "gradual" further reduction in borrowing costs.

On the Euro front, the dovish stance from the European Central Bank (ECB) might drag the Euro (EUR) lower against the GBP. The ECB policymakers remain comfortable with the outlook for three more rate cuts this year, following a 25 basis points (bps) reduction to 2.75% last month. Pound Sterling FAQs What is the Pound Sterling? The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE). How do the decisions of the Bank of England impact on the Pound Sterling? The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects. How does economic data influence the value of the Pound? Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall. How does the Trade Balance impact the Pound? Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.  

West Texas Intermediate (WTI) Oil price advances on Tuesday, according to FXStreet data.

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Bank of Japan (BoJ) Governor Kazuo Ueda said on Tuesday, “we are aware of views we had not been clear enough in our policy guidance.” “Last summer's volatility was mainly caused by market concern over weak US jobs data, US economic slowdown,” he added.

Bank of Japan (BoJ) Governor Kazuo Ueda said on Tuesday, “we are aware of views we had not been clear enough in our policy guidance.” “Last summer's volatility was mainly caused by market concern over weak US jobs data, US economic slowdown,” he added.

United Kingdom Claimant Count Rate: 4.6% (January)

United Kingdom Average Earnings Excluding Bonus (3Mo/Yr) meets forecasts (5.9%) in December

The United Kingdom’s (UK) ILO Unemployment Rate remained at 4.4% in the three months to December, the data published by the Office for National Statistics (ONS) showed on Tuesday.

.fxs-major-currency-prices-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-major-currency-prices-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-major-currency-prices-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:8px 16px}table.fxs-major-currency-prices-currency-prices-table{width:100%;text-align:center;border-collapse:collapse;font-size:1rem}table.fxs-major-currency-prices-currency-prices-table th{background-color:#f2f2f2}table.fxs-major-currency-prices-currency-prices-table td{color:#fff}table.fxs-major-currency-prices-currency-prices-table td.green{background-color:#9cd6cd}table.fxs-major-currency-prices-currency-prices-table td.red{background-color:#faafb5}table.fxs-major-currency-prices-currency-prices-table td.blue-grey{background-color:#888a93}.fxs-major-currency-prices-currency-prices-legend{font-size:11px;margin:8px;color:#49494f}@media (min-width:680px){.fxs-major-currency-prices-content{font-size:16px;line-height:21.6px}.fxs-major-currency-prices-title{font-size:19.2px;line-height:27.2px}}.fxs-major-currency-prices-currency-price td.dark-green{background-color:#39ad9a}.fxs-major-currency-prices-currency-price td.light-green{background-color:#9cd6cd}.fxs-major-currency-prices-currency-price td.gray{background-color:#888a93}.fxs-major-currency-prices-currency-price td.light-red{background-color:#faafb5}.fxs-major-currency-prices-currency-price td.strong-red{background-color:#f55e6a}The UK Unemployment Rate held steady at 4.4% in three months to December.The Claimant Count Change for Britain came in at 22K in January.GBP/USD trims losses to regain 1.2600 after mixed UK employment dataThe United Kingdom’s (UK) ILO Unemployment Rate remained at 4.4% in the three months to December, the data published by the Office for National Statistics (ONS) showed on Tuesday. The market forecast was for a 4.5% print in the reported period. Additional details of the report showed that the number of people claiming jobless benefits climbed by 22K in January, compared with a revised drop of 15.1K in December, missing the estimated 10K figure. The Employment Change data for December came in at 107K versus November’s 35K. Meanwhile, Average Earnings, excluding Bonus, in the UK increased by 5.9% three months year-on-year (3M YoY) in December versus a 5.6% growth booked previously. Markets expected a 5.9% reading. Another measure of wage inflation, Average Earnings, including Bonus, rose 5.9% in the same period after accelerating by 5.6% in the quarter through November. The data surpassed the market consensus of 5.9%. GBP/USD reaction to the UK employment reportGBP/USD finds fresh demand and trims losses on the release of the UK employment data. The pair is trading 0.09% lower on the day at 1.2613, as of writing. British Pound PRICE Today The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the US Dollar.   USD EUR GBP JPY CAD AUD NZD CHF USD   0.18% 0.10% 0.30% 0.05% 0.00% 0.42% 0.13% EUR -0.18%   -0.08% 0.11% -0.13% -0.17% 0.23% -0.05% GBP -0.10% 0.08%   0.23% -0.05% -0.10% 0.31% 0.03% JPY -0.30% -0.11% -0.23%   -0.26% -0.31% 0.08% -0.19% CAD -0.05% 0.13% 0.05% 0.26%   -0.05% 0.36% 0.09% AUD -0.01% 0.17% 0.10% 0.31% 0.05%   0.40% 0.10% NZD -0.42% -0.23% -0.31% -0.08% -0.36% -0.40%   -0.28% CHF -0.13% 0.05% -0.03% 0.19% -0.09% -0.10% 0.28%   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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).  

United Kingdom Employment Change (3M) climbed from previous 35K to 107K in December

United Kingdom ILO Unemployment Rate (3M) below forecasts (4.5%) in December: Actual (4.4%)

United Kingdom Average Earnings Including Bonus (3Mo/Yr) came in at 6%, above forecasts (5.9%) in December

United Kingdom Claimant Count Change registered at 22K above expectations (10K) in January

The USD/CAD pair trades in positive territory near 1.4205 during the early European session on Tuesday, supported by the firmer Greenback.

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The headline CPI is estimated to show an increase of 1.8% YoY in January. On a monthly basis, the CPI inflation is projected to rise to 0.1% in January from a decline of 0.4% in December. 

According to the 4-hour chart, the bearish outlook of USD/CAD prevails as the pair is below the key 100-period Exponential Moving Average (EMA). The downward momentum is reinforced by the Relative Strength Index (RSI), which stands below the midline near 46.25, supporting the sellers in the near term. 

The initial support level for the cross is seen at 1.4151, the low of February 14. Any follow-through selling below the mentioned level could see a drop to 1.4130, the lower limit of the Bollinger Band. Further south, the next contention level to watch is the 1.4100 psychological level.

The first upside barrier for the pair emerges near 1.4265, the upper boundary of the Bollinger Band. A decisive break above this level could pave the way to 1.4310, the 100-period EMA. Extended gains could see a rally to the next hurdle at 1.4380, the high of February 10.  USD/CAD 4-hour chartCanadian Dollar FAQs What key factors drive the Canadian Dollar? 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. How do the decisions of the Bank of Canada impact 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. How does the price of Oil impact the Canadian Dollar? 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. How does inflation data impact the value of the Canadian Dollar? 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. How does economic data influence the value of 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.    

EUR/JPY retraces its recent losses, trading around 159.10 during the Asian hours on Tuesday.

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The EUR/JPY cross appreciates as the Japanese Yen (JPY) loses ground amid increased market optimism due to the postponement of the implementation of US President Donald Trump's reciprocal tariffs. However, the upside of the EUR/JPY cross could be limited as the Japanese Yen may regain its ground amid increased hawkish sentiment surrounding the Bank of Japan’s (BoE) policy outlook, driven by a robust Japan’s Gross Domestic Product (GDP) report that exceeded expectations. Markets are now pricing-in an additional 37 basis points rate increase by the Bank of Japan in 2025, driving the yield on the benchmark 10-year Japanese government bond to its highest level since April 2010. The Euro could face downward pressure as several European Central Bank (ECB) officials remain comfortable with the outlook for three more rate cuts this year, following a 25 basis point reduction to 2.75% last month. However, the Euro could gain support if a ceasefire in Ukraine is reached and gas supplies resume. A JP Morgan note suggests that the EUR/USD pair could appreciate by up to 5% under such circumstances. Reports indicate that US President Donald Trump and Russian President Vladimir Putin have agreed to initiate negotiations to end the conflict. Officials from the Trump administration are scheduled to meet with their Russian counterparts in Saudi Arabia on Tuesday to discuss a potential peace agreement. Interest rates FAQs What are interest rates? Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation. How do interest rates impact currencies? Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money. How do interest rates influence the price of Gold? Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold. What is the Fed Funds rate? The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.  

Silver (XAG/USD) reverses an Asian session dip to the $32.00 neighborhood and climbs to the top end of its intraday trading range in the last hour.

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The white metal currently trades around the $32.35-$32.40 region, nearly unchanged for the day, though it remains well below the highest level since late October touched last Friday.  Looking at the broader picture, the XAG/USD – barring a couple of knee-jerk spikes – has been oscillating in a familiar range over the past two weeks or so. Against the backdrop of the year-to-date strong move up, this might still be categorized as a bullish consolidation phase. Adding to this, positive oscillators on the daily chart suggest that the path of least resistance for the commodity is to the upside.  That said, it will still be prudent to wait for some follow-through strength beyond the $32.55 horizontal barrier before positioning for a move toward the $33.00 mark. The XAG/USD might then climb further towards last Friday's swing high, around the $33.35-$33.40 zone en route to the $34.00 round figure, the $34.45 intermediate hurdle, and the $35.00 neighborhood, or the multi-year peak touched in October.  On the flip side, weakness below the $32.00-$31.90 region now seems to have emerged as an immediate strong support. This is followed by the lower boundary of the short-term trading range, around the $31.75-$31.70 region, below which the XAG/USD could slide toward retesting the 100-day Simple Moving Average (SMA), currently pegged near the $31.20 area, before dropping to the $31.00 round figure mark.  Some follow-through selling below the latter might shift the near-term bias in favor of bearish traders and pave deeper losses. The subsequent fall has the potential to drag the XAG/USD towards the next relevant support near the $30.25 region en route to the $30.00 psychological mark and the $29.55-$29.50 horizontal zone. Silver daily chartSilver FAQs Why do people invest in Silver? 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. Which factors influence Silver prices? 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. How does industrial demand affect Silver 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. How do Silver prices react to Gold’s moves? 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.  

The USD/CHF pair extends its recovery to around 0.9030 during the early European session on Tuesday, bolstered by a firmer US Dollar (USD).

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Last week's data showed U.S. consumer prices climbed at the highest pace in almost 18 months in January, highlighting the Fed's message that it was not in a hurry to continue reducing rates despite rising economic uncertainties. This, in turn, continues to underpin the Greenback in the near term. "An extended pause during the first half of this year looks justified and will give the Fed time to assess the impact of trade measures on inflation,” said ANZ strategists.

Israeli warplanes launched airstrikes on the villages of Tayr Harfa and Aaichiyehin in the Jezzine district on Monday night, as well as two explosions in the border town of Odaisseh in the Marjayoun district, breaking the ceasefire in southern Lebanon just before it is due to leave the area, according to Anadolu Agency.

Investors will closely monitor the development surrounding geopolitical tensions in the Middle East. Any signs of escalation in the region could boost the safe-haven currency like the Swiss Franc (CHF) and create a headwind for the pair.  Swiss Franc FAQs What key factors drive the Swiss Franc? The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone. Why is the Swiss Franc considered a safe-haven currency? The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in. How do decisions of the Swiss National Bank impact the Swiss Franc? The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF. How does economic data influence the value of the Swiss Franc? Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate. How does the Eurozone monetary policy affect the Swiss Franc? As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.  

Gold price (XAU/USD) trades with a mild positive bias above the $2,900 mark during the Asian session on Tuesday, though it lacks bullish conviction and remains confined in a familiar range that has held over the past week or so.

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Investors remain worried that US President Donald Trump's threat of reciprocal tariffs would trigger a global trade war. This turns out to be a key factor that continues to underpin demand for the safe-haven bullion.  Adding to this, expectations that the Federal Reserve (Fed) might cut interest rates further this year, bolstered by the unforeseen drop in US Retail Sales, offers support to the non-yielding Gold price. That said, a goodish bounce in the US Treasury bond yields and a modest US Dollar (USD) uptick hold back the XAU/USD bulls from placing fresh bets. Nevertheless, the uncertainty over Trump's trade policies should act as a tailwind for the commodity.  Gold price continues to attract haven flows amid worries about Trump’s trade policies US President Donald Trump threatened on Friday, saying that levies on automobiles would be coming as soon as April 2. This comes on top of Trump's reciprocal tariff plans on countries that charge duties on US imports and continues to underpin the safe-haven Gold price.  The disappointing release of US Retail Sales figures on Friday, along with mixed signals on inflation, suggests that the Federal Reserve could possibly cut rates at the September or October policy meeting. Fed Funds Futures see the possibility of a 40 basis point rate cut in 2025. Philadelphia Fed President Patrick Harker said on Monday that the labor market is largely in balance and the current economy argues for a steady policy as inflation has been sticky over recent months. Future Fed rate policy choices will be data-driven, Harker added further.  Fed Board of Governors member Michelle Bowman noted that high asset prices may have impeded progress on inflation and more certainty is needed on declining inflation before reducing rates. Bowman added that wage growth above level is consistent with the Fed inflation target. Fed Board of Governors member Christopher Waller said that inflation progress last year has been excruciatingly slow and that rate cuts would be appropriate in 2025 if inflation repeats the 2024 pattern. Waller expects disinflation and interest rate cuts to resume year on year. The US Dollar attracts some buyers and for now, seems to have snapped a three-day losing streak to its lowest level since December 17. This might hold back traders from placing aggressive bullish bets around the XAU/USD and keep a lid on any further appreciating move.  Traders look to the release of the Empire State Manufacturing Index from the US for some impetus later during the North American session. Apart from this, speeches by influential FOMC members would drive the USD demand and produce short-term trading opportunities. Gold price might confront some resistance near $2,925 before testing all-time peakFrom a technical perspective, the range-bound price action witnessed over the past week or so could be categorized as a bullish consolidation phase against the backdrop of the recent rally to a record high. Moreover, oscillators on the daily chart are holding comfortably in the positive territory and suggest that the path of least resistance for the Gold price remains to the upside. That said, the daily Relative Strength Index (RSI) remains close to overbought territory. Hence, any subsequent move up is more likely to confront stiff resistance near the $2,925 horizontal zone. This is followed by the $2,942-2,943 area, or the all-time peak, which if cleared decisively will mark a fresh breakout and pave the way for an extension of a two-month-old uptrend. On the flip side, weakness below the $2,900 mark now seems to find decent support near the $2,878-2,876 region. Any further decline towards the $2,860-2,855 area could be seen as a buying opportunity, which should help limit the downside for the Gold price near the $2,834 zone. A convincing break below the latter, however, might prompt some technical selling and drag the XAU/USD towards the $2,815 region en route to the $2,800 mark and the $2,785-2,784 support. Gold FAQs Why do people invest in Gold? 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. Who buys the most Gold? 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. How is Gold correlated with other assets? 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. What does the price of Gold depend on? 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. Tariffs FAQs What are tariffs? 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. What is the difference between taxes and tariffs? 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. Are tariffs good or bad? 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. What is US President Donald Trump’s tariff plan? 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.  

Gold prices rose in India on Tuesday, according to data compiled by FXStreet.

.fxs-related-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-related-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-related-module-related-link a{font-size:19.2px;line-height:25.92px}.fxs-related-module-related-link a{text-decoration:none;color:#1b1c23;font-weight:700;font-size:16px;font-style:normal;line-height:20px}.fxs-related-module-related-link a:hover,.fxs-related-module-related-link:hover,.fxs-related-module-related-link:hover a{color:#e4871b}.fxs-related-module-related-link a:hover{text-decoration:none}@media (min-width:680px){.fxs-related-module-title{font-size:19.2px;line-height:27.2px}.fxs-related-module-related-link a{font-size:19.2px;line-height:25.92px}} .fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} Gold prices rose in India on Tuesday, according to data compiled by FXStreet. The price for Gold stood at 8,126.38 Indian Rupees (INR) per gram, up compared with the INR 8,096.88 it cost on Monday. The price for Gold increased to INR 94,784.55 per tola from INR 94,440.36 per tola a day earlier. Unit measure Gold Price in INR 1 Gram 8,126.38 10 Grams 81,263.85 Tola 94,784.55 Troy Ounce 252,740.80   FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly. Related newsGold Price Forecast: XAU/USD turns cautious, awaits US-Russia talks, FedspeakGold price gains amid uncertainty on US trade policiesGold Price Forecast: XAU/USD struggles around $2,900 in dull trading  Gold FAQs Why do people invest in Gold? 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. Who buys the most Gold? 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. How is Gold correlated with other assets? 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. What does the price of Gold depend on? 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. (An automation tool was used in creating this post.)

Reserve Bank of Australia (RBA) Governor Michele Bullock is speaking at the press conference, following the announcement of the February monetary policy decision on Tuesday.

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Earlier this Tuesday, the RBA lowered the benchmark interest rate to 4.1% as widely expected.   Key quotes Clear that high rates have worked. Cannot declare victory on inflation yet. Strength of jobs market has been surprising. Further rate cuts implied by market not guaranteed. Cannot get too ahead of ourselves on rates. Rate cut was a difficult decision. Further cuts will depend on data. Need to see upside risks to inflation abate a bit, including wage costs. Would be good to see some recovery in supply side of economy.developing story ....Market reaction AUD/USD is back above 0.6350 on the above comments, still losing 0.06% on the day, as of writing. RBA FAQs What is the Reserve Bank of Australia and how does it influence the Australian Dollar? The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening. How does inflation data impact the value of the Australian Dollar? While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar. How does economic data influence the value of the Australian Dollar? Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD. What is Quantitative Easing (QE) and how does it affect the Australian Dollar? Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD. What is Quantitative tightening (QT) and how does it affect the Australian Dollar? Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.  

GBP/USD breaks its five-day winning streak, trading around 1.2600 during Tuesday's Asian session.

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Traders are awaiting UK employment data set to be released later in the day. The Claimant Count Change for January is expected to rise to 10K new unemployment benefit claimants, up from the previous 0.7K. The ILO Unemployment Rate is also forecast to increase to 4.5% from 4.4%. British Prime Minister Keir Starmer stated on Monday that any peace deal for Ukraine would require a "US backstop" to prevent Russia from attacking again, according to Reuters. Starmer emphasized that Ukraine's future is a crucial issue for Europe, and it is urgent for Europe to share the responsibility in addressing the situation. The downside risk for the GBP/USD pair could be linked to the strengthening US Dollar as Treasury yields rise. The US Dollar Index (DXY), which tracks the USD against six major currencies, edges higher after losing ground in the previous three sessions, trading around 106.90. At the same time, 2-year and 10-year US Treasury yields stand at 4.27% and 4.51%, respectively.Federal Reserve Governor Michelle Bowman remarked on Monday that rising asset prices may have slowed the Fed's progress on inflation. While she expects inflation to decline, she warned that upside risks persist and stressed the need for more certainty before considering rate cuts. Meanwhile, Fed Governor Christopher Waller acknowledged on Monday that while inflation has improved, progress has been “excruciatingly” slow. Waller emphasized the importance of not letting policy uncertainty hinder data-driven decisions. Pound Sterling FAQs What is the Pound Sterling? The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE). How do the decisions of the Bank of England impact on the Pound Sterling? The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects. How does economic data influence the value of the Pound? Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall. How does the Trade Balance impact the Pound? Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.  

FX option expiries for Feb 18 NY cut at 10:00 Eastern Time via DTCC can be found below.

FX option expiries for Feb 18 NY cut at 10:00 Eastern Time via DTCC can be found below. EUR/USD: EUR amounts 1.0300 3.5b 1.0340 1.8b 1.0400 1b 1.0450 947m 1.0500 1.3b 1.0625 867m GBP/USD: GBP amounts      1.2600 614m USD/JPY: USD amounts                                  154.00 1.1b 155.00 1.1b USD/CAD: USD amounts        1.4185 472m 1.4295 1.1b 1.4300 929m EUR/GBP: EUR amounts         0.8315 650m

The AUD/JPY cross attracts some buyers to around 96.55 during the early Asian session on Tuesday.

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As widely expected, the RBA board members decided to lower the Official Cash Rate (OCR) by 25 basis points (bps) from 4.35% to 4.10% at its February policy meeting on Tuesday. This marks the first rate cut in four years. In the absence of fresh dovish remarks, the Aussie strengthens against the Japanese Yen (JPY). 

Additionally, US President Donald Trump's decision to delay the implementation of reciprocal tariffs contributes to the AUD’s upside. The process of Trump's ultimate tariff policies might take longer than many analysts had expected. Westpac analysts are leaning toward further gains in the AUD in the near term.

On the JPY’s front, the rising bets for more interest rate hikes by the Bank of Japan (BoJ) could lift the Japanese Yen (JPY) and create a headwind for AUD/JPY. Former BoJ official Nobuyasu Atago sees the chance of a hike at the April 30-May 1 meeting, given the BOJ's rising attention to the risk of an inflation overshoot. Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.  

EUR/USD extends its losses for the second successive session, trading near 1.0460 during the Asian hours on Tuesday.

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}EUR/USD declines as the US Dollar strengthens following three consecutive sessions of losses.Fed Governor Michelle Bowman warned that upside inflation risks persist, stressing the need for more clarity before considering rate cuts.The Euro faces downward pressure from the ECB's forecast of three additional rate cuts this year.EUR/USD extends its losses for the second successive session, trading near 1.0460 during the Asian hours on Tuesday. This downside could be attributed to the improved US Dollar (USD) amid rising Treasury yields. The US Dollar Index (DXY), which tracks the US Dollar's performance against six major currencies, edges higher after registering losses in the previous three successive sessions and trades around 106.90, while yields on 2-year and 10-year US Treasury bonds stand at 4.27% and 4.51%, respectively, at the time of writing.Federal Reserve Governor Michelle Bowman stated on Monday that rising asset prices may have slowed the Fed’s recent progress on inflation. While Bowman expects inflation to decline, she cautioned that upside risks remain and emphasized the need for more certainty before considering rate cuts. Meanwhile, Fed Governor Christopher Waller acknowledged late Monday that while inflation has improved, progress has been “excruciatingly” slow. Waller stressed that the Fed must not allow policy uncertainty to hinder data-driven decision-making. The Euro faces downward pressure as several European Central Bank (ECB) officials remain comfortable with the outlook for three more rate cuts this year, following a 25 basis point reduction to 2.75% last month. However, the Euro could gain support if a ceasefire in Ukraine is reached and gas supplies resume. A JP Morgan note suggests that the EUR/USD pair could appreciate by up to 5% under such circumstances. Reports indicate that former US President Donald Trump and Russian President Vladimir Putin have agreed to initiate negotiations to end the conflict. Officials from the Trump administration are scheduled to meet with their Russian counterparts in Saudi Arabia on Tuesday to discuss a potential peace agreement. Euro FAQs What is the Euro? The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%). What is the ECB and how does it impact the Euro? The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde. How does inflation data impact the value of the Euro? Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money. How does economic data influence the value of the Euro? Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy. How does the Trade Balance impact the Euro? Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.  

The AUD/NZD cross stages a goodish rebound from over a one-week low, around the 1.1075 region touched during the Asian session on Tuesday, and gains follow-through traction after the Reserve Bank of Australia (RBA) announced its policy decision.

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Spot prices currently trade around the 1.1130 area, up nearly 0.50% for the day, and remain close to a multi-month peak touched last week.  The RBA board members decided to lower the Official Cash Rate (OCR) by 25 basis points (bps) from 4.35% to 4.1% at the end of the February policy meeting. This was the first RBA rate cut since November 2020 and was fully priced in the market. In the absence of fresh dovish signals, the Australian Dollar (AUD) strengthens across the board and turns out to be a key factor that provides a goodish lift to the AUD/NZD cross.  The New Zealand Dollar (NZD), on the other hand, continues with its relative underperformance amid rising bets that the Reserve Bank of New Zealand (RBNZ) will deliver a third supersized rate cut later this month. This further contributes to the strong bid tone surrounding the AUD/NZD cross. Traders now look to the RBA's post-meeting presser, where comments from RBA Governor Michele Bullock might influence the AUD. Economic Indicator RBA Interest Rate Decision The Reserve Bank of Australia (RBA) announces its interest rate decision at the end of its eight scheduled meetings per year. If the RBA is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Australian Dollar (AUD). Likewise, if the RBA has a dovish view on the Australian economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for AUD. Read more. Last release: Tue Feb 18, 2025 03:30 Frequency: IrregularActual: 4.1%Consensus: 4.1%Previous: 4.35%Source: Reserve Bank of Australia  

Australia RBA Interest Rate Decision in line with expectations (4.1%)

AUD/JPY remains attempts to recover its recent losses registered in the previous session, hovering around 96.40 during Tuesday’s Asian hours.

.fxs-major-currency-prices-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-major-currency-prices-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-major-currency-prices-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:8px 16px}table.fxs-major-currency-prices-currency-prices-table{width:100%;text-align:center;border-collapse:collapse;font-size:1rem}table.fxs-major-currency-prices-currency-prices-table th{background-color:#f2f2f2}table.fxs-major-currency-prices-currency-prices-table td{color:#fff}table.fxs-major-currency-prices-currency-prices-table td.green{background-color:#9cd6cd}table.fxs-major-currency-prices-currency-prices-table td.red{background-color:#faafb5}table.fxs-major-currency-prices-currency-prices-table td.blue-grey{background-color:#888a93}.fxs-major-currency-prices-currency-prices-legend{font-size:11px;margin:8px;color:#49494f}@media (min-width:680px){.fxs-major-currency-prices-content{font-size:16px;line-height:21.6px}.fxs-major-currency-prices-title{font-size:19.2px;line-height:27.2px}}.fxs-major-currency-prices-currency-price td.dark-green{background-color:#39ad9a}.fxs-major-currency-prices-currency-price td.light-green{background-color:#9cd6cd}.fxs-major-currency-prices-currency-price td.gray{background-color:#888a93}.fxs-major-currency-prices-currency-price td.light-red{background-color:#faafb5}.fxs-major-currency-prices-currency-price td.strong-red{background-color:#f55e6a}AUD/JPY tests the immediate support at the nine-day EMA of 96.34.The 14-day RSI remains just below the 50 mark, reinforcing the prevailing bearish momentum.The primary barrier appears around the descending channel’s upper boundary at the 97.00 level.AUD/JPY remains attempts to recover its recent losses registered in the previous session, hovering around 96.40 during Tuesday’s Asian hours. Traders await the Reserve Bank of Australia’s (RBA) policy decision later in the day. The central bank is widely expected to lower its Official Cash Rate (OCR) by 25 basis points (bps) to 4.10%, marking the first rate cut in four years. A review of the daily chart shows the currency cross trading sideways within a descending channel pattern, indicating a prevailing bearish bias. The 14-day Relative Strength Index (RSI) remains slightly below the 50 level, reinforcing bearish momentum. However, the AUD/JPY cross continues to trade around the nine-day Exponential Moving Average (EMA), indicating that short-term price momentum is neutral. Further movement will offer a clear understanding of the directional price movement. The immediate support level for the AUD/JPY cross is at the nine-day EMA of 96.34. A decisive break below this level could lead the currency cross to navigate the region around the five-month low of 94.37, recorded on February 10. Further support appears at the six-month low of 93.59, recorded on September 11, followed by the lower boundary of the descending channel around 93.50. On the upside, the AUD/JPY cross could approach the upper boundary of the descending channel at the psychological level of 97.00, followed by the 50-day EMA at 97.18. A break above this critical resistance zone could cause the emergence of the bullish bias and support the currency cross to test the six-week high at 98.77 level, which was recorded on January 24. AUD/JPY: Daily ChartAustralian 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 New Zealand Dollar.   USD EUR GBP JPY CAD AUD NZD CHF USD   0.15% 0.17% 0.26% 0.07% 0.24% 0.47% 0.09% EUR -0.15%   0.02% 0.11% -0.08% 0.10% 0.32% -0.06% GBP -0.17% -0.02%   0.10% -0.10% 0.08% 0.30% -0.08% JPY -0.26% -0.11% -0.10%   -0.19% -0.02% 0.19% -0.18% CAD -0.07% 0.08% 0.10% 0.19%   0.17% 0.40% 0.02% AUD -0.24% -0.10% -0.08% 0.02% -0.17%   0.22% -0.16% NZD -0.47% -0.32% -0.30% -0.19% -0.40% -0.22%   -0.37% CHF -0.09% 0.06% 0.08% 0.18% -0.02% 0.16% 0.37%   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).  

The National Development and Reform Commission (NDRC), China’s state planner, said in a statement on Tuesday that “precise' policies to be implemented to help ease difficulties faced by private companies.” Additional takeaways 'Current' political, economic and social environment very conducive to development of private economy.

.fxs-related-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-related-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-related-module-related-link a{font-size:19.2px;line-height:25.92px}.fxs-related-module-related-link a{text-decoration:none;color:#1b1c23;font-weight:700;font-size:16px;font-style:normal;line-height:20px}.fxs-related-module-related-link a:hover,.fxs-related-module-related-link:hover,.fxs-related-module-related-link:hover a{color:#e4871b}.fxs-related-module-related-link a:hover{text-decoration:none}@media (min-width:680px){.fxs-related-module-title{font-size:19.2px;line-height:27.2px}.fxs-related-module-related-link a{font-size:19.2px;line-height:25.92px}} The National Development and Reform Commission (NDRC), China’s state planner, said in a statement on Tuesday that “precise' policies to be implemented to help ease difficulties faced by private companies.” Additional takeaways 'Current' political, economic and social environment very conducive to development of private economy. China will further break down barriers to market access, revise and introduce a new version of the negative list for market access as soon as possible. Will continue to solve difficulties and high-cost of financing for private enterprises. To speed up preparations for implementation of private economy promotion law. Will resolutely crack down on smearing and defaming the image and reputation of enterprises. To promote fair opening of competitive areas of infrastructure and major national research infrastructure to private enterprises. Related newsPBOC Governor Pan: Will continue to let the market play a decisive role in deciding the Yuan exchange rateAustralian Dollar depreciates ahead of RBA decisionChina President Xi calls to boost country’s private sector 

The Japanese Yen (JPY) attracts some sellers during the Asian session on Tuesday, which, along with a modest US Dollar (USD) uptick, assists the USD/JPY pair in staging a modest recovery from the 151.25 area or over a one-week low.

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Investors cheered a delay in the implementation of US President Donald Trump's reciprocal tariffs. This, in turn, is seen as a key factor undermining the safe-haven JPY. Any meaningful JPY depreciation, however, still seems elusive in the wake of rising bets for more interest rate hikes by the Bank of Japan (BoJ), bolstered by the release of robust Q4 GDP print from Japan on Monday. Meanwhile, hawkish BoJ expectations led to a significant rise in Japanese government bond yields, to a multi-year high. Adding to this, the recent decline in the US Treasury bond yields, backed by expectations that the Federal Reserve (Fed) would cut interest rates further, has resulted in a narrowing of the US-Japan rate differential. This might further hold back traders from placing aggressive bearish bets around the lower-yielding JPY. Hence, it will be prudent to wait for strong follow-through buying before confirming that the USD/JPY pair has bottomed out and positioning for any further recovery. Japanese Yen bulls have the upper hand amid hawkish BoJ expectations US President Donald Trump said on Thursday that he plans to unveil reciprocal tariffs, which would aim at every country that charges duties on US imports, though he stopped short of giving any details.  Furthermore, the optimism over talks between the US and Russia aimed at ending the war in Ukraine boosted investors' confidence and undermined demand for the safe-haven Japanese Yen on Tuesday.  Against the backdrop of strong inflation figures from Japan, the solid Q4 Gross Domestic Product (GDP) released on Monday cemented the case for imminent rate hikes from the Bank of Japan this year. Markets are now pricing in roughly another 37 basis points worth of increases by December, pushing the yield on the benchmark 10-year Japanese government bond to its highest level since April 2010. Meanwhile, a surprise drop in US Retail Sales, along with mixed signals on inflation, suggests that the Federal Reserve could possibly cut interest rates at the September or October policy meeting.  Philadelphia Fed President Patrick Harker said on Monday that the labor market is largely in balance and the current economy argues for a steady policy as inflation has been sticky over recent months. Fed Board of Governors member Michelle Bowman noted that high asset prices may have impeded progress on inflation and more certainty is needed on declining inflation before reducing rates. Fed Board of Governors member Christopher Waller said that inflation progress last year has been excruciatingly slow and that rate cuts would be appropriate in 2025 if inflation repeats the 2024 pattern. Nevertheless, Fed Funds Futures see a 40 basis point Fed rate cut in 2025, causing the recent decline in the US Treasury bond yields and contributing to the narrowing of the US-Japan rate differential. Traders look to the release of the Empire State Manufacturing Index from the US, which, along with speeches by influential FOMC members, would drive the US Dollar and the USD/JPY pair.  USD/JPY might struggle to build on intraday recovery beyond the 152.00 markFrom a technical perspective, last week's failure near the 50% retracement level of the January-February down leg and the subsequent slide below the very important 200-day Simple Moving Average (SMA) favors bearish traders. Moreover, oscillators on the daily chart are holding in negative territory and suggest that the path of least resistance for the USD/JPY pair is to the downside. Hence, any further move up towards the 152.00 mark could be seen as a selling opportunity, which should cap spot prices near the 152.65 region (200-day SMA). This is followed by the 100-day SMA, currently pegged near the 153.15 region, which if cleared could trigger a short-covering rally beyond the 154.00 mark, towards the 154.45-154.50 supply zone en route to last week's swing high, around the 154.75-154.80 region.  On the flip side, the 151.25 area, or the Asian session low, now seems to act as immediate support ahead of the 151.00-150.90 zone, or the year-to-date trough touched earlier this month. A convincing break below the latter would expose the 150.00 psychological mark. Some follow-through selling should pave the way for a fall toward the 149.60-149.55 region en route to the 149.00 round figure and the December 2024 swing low, around the 148.65 region. Japanese Yen FAQs What key factors drive the Japanese Yen? 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. How do the decisions of the Bank of Japan impact the Japanese Yen? 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. How does the differential between Japanese and US bond yields impact the Japanese 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. How does broader risk sentiment impact the Japanese Yen? 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. Tariffs FAQs What are tariffs? 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. What is the difference between taxes and tariffs? 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. Are tariffs good or bad? 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. What is US President Donald Trump’s tariff plan? 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.  

The NZD/USD pair attracts some sellers to around 0.5710 during the early Asian session on Tuesday.

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The RBNZ is expected to slash the Official Cash Rate (OCR) by 50 basis points (bps) on Wednesday, bringing the rate down to 3.75%. Our base case is the RBNZ will cut by 25bp at each of the following two meetings, in April and May," said ASB chief economist Nick Tuffley.

RBNZ Governor Adrian Orr will hold a press conference after the rate decision, which might offer some hints about the interest rate path in New Zealand. Any dovish remarks from the RBNZ policymakers could exert some selling pressure on the Kiwi.

The concerns of tariffs and trade war might boost the safe-haven flows, benefiting the Greenback. US President Donald Trump on Friday maintained his drumbeat of tariff threats, stating that taxes on autos will begin as soon as April 2. This was the latest action in a series of trade measures he has announced since taking office for the second term. Meanwhile, the prospect that the US Federal Reserve (Fed) would stick to its hawkish stance amid elevated inflation might act as a tailwind for the pair in the near term.  RBNZ FAQs What is the Reserve Bank of New Zealand? The Reserve Bank of New Zealand (RBNZ) is the country’s central bank. Its economic objectives are achieving and maintaining price stability – achieved when inflation, measured by the Consumer Price Index (CPI), falls within the band of between 1% and 3% – and supporting maximum sustainable employment. How does the Reserve Bank of New Zealand’s monetary policy influence the New Zealand Dollar? The Reserve Bank of New Zealand’s (RBNZ) Monetary Policy Committee (MPC) decides the appropriate level of the Official Cash Rate (OCR) according to its objectives. When inflation is above target, the bank will attempt to tame it by raising its key OCR, making it more expensive for households and businesses to borrow money and thus cooling the economy. Higher interest rates are generally positive for the New Zealand Dollar (NZD) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken NZD. Why does the Reserve Bank of New Zealand care about employment? Employment is important for the Reserve Bank of New Zealand (RBNZ) because a tight labor market can fuel inflation. The RBNZ’s goal of “maximum sustainable employment” is defined as the highest use of labor resources that can be sustained over time without creating an acceleration in inflation. “When employment is at its maximum sustainable level, there will be low and stable inflation. However, if employment is above the maximum sustainable level for too long, it will eventually cause prices to rise more and more quickly, requiring the MPC to raise interest rates to keep inflation under control,” the bank says. What is Quantitative Easing (QE)? In extreme situations, the Reserve Bank of New Zealand (RBNZ) can enact a monetary policy tool called Quantitative Easing. QE is the process by which the RBNZ prints local currency and uses it to buy assets – usually government or corporate bonds – from banks and other financial institutions with the aim to increase the domestic money supply and spur economic activity. QE usually results in a weaker New Zealand Dollar (NZD). QE is a last resort when simply lowering interest rates is unlikely to achieve the objectives of the central bank. The RBNZ used it during the Covid-19 pandemic.  

The Australian Dollar (AUD) pauses its three-day winning streak against the US Dollar (USD) as traders await the Reserve Bank of Australia’s (RBA) policy decision on Tuesday.

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The central bank is widely expected to lower its Official Cash Rate (OCR) by 25 basis points (bps) to 4.10%, marking the first rate cut in four years. However, policymakers may adopt a cautious stance, as trimmed mean inflation remains above the RBA’s 2%-3% target range. Signs of easing inflation in Australia have increased expectations for a rate cut in February. December data indicated slowing price pressures, with the latest quarterly Consumer Price Index (CPI) rising less than forecast in the final quarter of 2024. The RBA’s preferred inflation measure, the Trimmed Mean CPI, climbed 0.5% for the quarter—below the expected 0.6%—while the annualized rate declined to 3.2% from 3.5%. The AUD/USD pair found support following US President Donald Trump's decision to delay the implementation of reciprocal tariffs. Additionally, the US Dollar (USD) weakened as a disappointing US retail sales report fueled speculation that the Federal Reserve (Fed) might cut interest rates later this year, despite lingering inflation concerns. Australian Dollar declines as US Dollar gains ground on improved Treasury yields The US Dollar Index (DXY), which tracks the US Dollar's performance against six major currencies, edges higher after registering losses in the previous three successive sessions due to improved US Treasury yields. The DXY trades around 106.80, while yields on 2-year and 10-year US Treasury bonds stand at 4.26% and 4.50%, respectively. Federal Reserve Governor Michelle Bowman stated on Monday that rising asset prices may have slowed the Fed’s recent progress on inflation. While Bowman expects inflation to decline, she cautioned that upside risks remain and emphasized the need for more certainty before considering rate cuts. Meanwhile, Fed Governor Christopher Waller acknowledged late Monday that while inflation has improved, progress has been “excruciatingly” slow. Waller stressed that the Fed must not allow policy uncertainty to hinder data-driven decision-making. US Census Bureau reported on Friday that Retail Sales fell by 0.9% in January, following a revised 0.7% increase in December (previously reported as 0.4%). This decline was sharper than the market’s expectation of a 0.1% drop. Fed Chair Jerome Powell said in his semi-annual report to Congress that the board officials “do not need to be in a hurry" to cut interest rates due to strength in the job market and solid economic growth. He added that US President Donald Trump's tariff policies could put more upward pressure on prices, making it harder for the central bank to lower rates. On Monday, Chinese President Xi Jinping led a meeting with Alibaba co-founder Jack Ma and other prominent entrepreneurs, signaling Beijing’s renewed support for the private sector, which is now seen as crucial to economic recovery, according to Bloomberg. Xi emphasized the need to eliminate barriers that hinder equal access to production resources and fair market competition. Australian Dollar moves below 0.6350; support appears at nine-day EMA AUD/USD trades near 0.6340 on Tuesday, trending upward within an ascending channel pattern, indicating a bullish market bias. The 14-day Relative Strength Index (RSI) remains above the 50 level, further supporting the bullish outlook. On the upside, the AUD/USD pair may challenge the upper boundary of the ascending channel at 0.6390, followed by the key psychological resistance at 0.6400. Support levels include the nine-day EMA at 0.6316, followed by the 14-day EMA at 0.6300. A stronger support zone lies near the lower boundary of the ascending channel at 0.6280. AUD/USD: Daily ChartAustralian Dollar PRICE Today The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the US Dollar.   USD EUR GBP JPY CAD AUD NZD CHF USD   0.18% 0.20% 0.24% 0.13% 0.29% 0.39% 0.12% EUR -0.18%   0.03% 0.05% -0.05% 0.11% 0.21% -0.06% GBP -0.20% -0.03%   0.06% -0.07% 0.09% 0.19% -0.08% JPY -0.24% -0.05% -0.06%   -0.09% 0.06% 0.15% -0.11% CAD -0.13% 0.05% 0.07% 0.09%   0.16% 0.26% -0.01% AUD -0.29% -0.11% -0.09% -0.06% -0.16%   0.10% -0.18% NZD -0.39% -0.21% -0.19% -0.15% -0.26% -0.10%   -0.27% CHF -0.12% 0.06% 0.08% 0.11% 0.00% 0.18% 0.27%   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). Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.  

The Indian Rupee (INR) depreciates on Tuesday. Analysts expect the local currency to trade with negative bias amid weakness in the domestic equities and Foreign Institutional Investors (FII) outflows.

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Nonetheless, any significant decline in the INR might be capped amid further intervention by the Reserve Bank of India (RBI). Investors await the release of the NY Empire State Manufacturing Index for February, which will be released later on Tuesday. Also, the Federal Reserve's (Fed) Mary Daly is set to speak.  Indian Rupee remains vulnerable amid FII outflows India's trade deficit widened to $22.99 billion in January from December's $21.94 billion, according to government data on Monday. India’s Exports stood at $36.43 billion in January, while Imports rose to $59.4 billion during the same reported period, said the government data. The narrowing of the trade deficit was likely influenced by a decline in gold imports, as higher global prices reduced demand, according to a Union Bank of India report. "The Indian rupee declined today on a weak tone in the domestic markets and a recovery in the US dollar index from intraday lows. However, a weak tone in crude oil prices and a decline in US Treasury yields cushioned the downside," said Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan. On Friday, US President Donald Trump maintained his drumbeat of tariff threats, stating that taxes on autos will begin as soon as April 2. It was the latest in a series of trade measures he has announced since taking office for the second time. USD/INR’s broader trend remains constructive The Indian Rupee trades on a softer note on the day. According to the daily chart, the USD/INR pair keeps the bullish vibe as the price is above the key 100-day Exponential Moving Average (EMA). Furthermore, upward momentum is supported by the 14-day Relative Strength Index (RSI), which stands above the midline near 55.0, hinting that the path of least resistance is to the upside. 

The first upside barrier for USD/INR emerges at the 87.00 psychological level. A decisive break above this level, the pair could set its sights back up on an all-time high near 88.00, en route to 88.50. 

In the bearish event, the initial support level is located at 86.35, the low of February 12. A breach of the mentioned level could set off a drop to 86.14, the low of January 27.   Indian Rupee FAQs What are the key factors driving the Indian Rupee? The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee. How do the decisions of the Reserve Bank of India impact the Indian Rupee? The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference. What macroeconomic factors influence the value of the Indian Rupee? Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee. How does inflation impact the Indian Rupee? Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.  

The People’s Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead on Tuesday at 7.1697 as compared to the previous day's fix of 7.1702 and 7.2538 Reuters estimates.

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} The People’s Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead on Tuesday at 7.1697 as compared to the previous day's fix of 7.1702 and 7.2538 Reuters estimates. PBOC FAQs What does the People's Bank of China do? 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. Who owns the PBoC? 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. What are the main policy tools used by the PBoC? 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. Are private banks allowed in China? 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.  

On Monday, Chinese President Xi Jinping presided over a meeting with Alibaba co-founder Jack Ma and other prominent entrepreneurs, signaling Beijing’s support for a long-marginalized private sector now considered key to reviving the economy, per Bloomberg.

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} On Monday, Chinese President Xi Jinping presided over a meeting with Alibaba co-founder Jack Ma and other prominent entrepreneurs, signaling Beijing’s support for a long-marginalized private sector now considered key to reviving the economy, per Bloomberg.   Key quotes It is necessary to resolutely remove all kinds of obstacles to the equal use of production factors and fair participation in market competition. 

Continue to promote the fair opening of the competitive field of infrastructure to all kinds of business entities, and continue to make great efforts to solve the problem of difficult and expensive financing for private enterprises. Market reaction At the press time, AUD/USD is down 0.15% on the day to trade at 0.6351.  Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

 

British Prime Minister Keir Starmer said late Monday that any Ukraine peace deal would require a "US backstop" to deter Russia from attacking its neighbor again, per Reuters.

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The future of Ukraine is an existential issue for Europe. 

It is pressing that they now share the burden.

Europe must play its role. 

There must be a US backstop.  Market reaction At the press time, the Gold price is up 0.07% on the day to trade at $2,899.  Risk sentiment FAQs What do the terms"risk-on" and "risk-off" mean when referring to sentiment in financial markets? 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. What are the key assets to track to understand risk sentiment dynamics? 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. Which currencies strengthen when sentiment is "risk-on"? 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. Which currencies strengthen when sentiment is "risk-off"? 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.  

EUR/USD swamped out at the 1.0500 handle on Monday, snapping a four-day win streak as Fiber bulls re-think their position.

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Money markets were constrained by a notable lack of order flow during the US market session, with most major US exchanges dark for the President’s Day holiday. FX markets will return to the fold in force on Tuesday, but Euro bidders may not find much momentum with a thin data docket. European economic sentiment survey results for both Germany and the wider European region are due early Tuesday, but consumers tend to be reactionary and behind the curve on economic factors, so market impact will likely remain limited. Regardless, the February’s figures are expected to improve from January’s print. The key US data print this week will be the upcoming Meeting Minutes from the Federal Reserve’s (Fed) latest rate call, due on Wednesday. US Purchasing Managers Index (PMI) survey results are also due this week, but not until Friday. EUR/USD price forecast EUR/USD failed to climb over 1.0500 again on Monday, churning just beneath the key technical level as bidders risk running out of gas. Technical oscillators including the Stochastic indicator are flashing warning signs of an overbought technical stance, though confirmation of a turnaround into the low side have yet to materialize. The pair is trading just north of the 50-day Exponential Moving Average (EMA) at 1.0432, and a firm technical floor appears to be priced in near 1.0300. EUR/USD daily chartEuro FAQs What is the Euro? The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%). What is the ECB and how does it impact the Euro? The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde. How does inflation data impact the value of the Euro? Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money. How does economic data influence the value of the Euro? Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy. How does the Trade Balance impact the Euro? Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.  

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $71.20 during the early Asian session on Tuesday.

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The Caspian Pipeline Consortium said on Monday that drones struck the Kropotkinskaya pipeline pumping station in Russia's southern Krasnodar region, reducing oil flows from Kazakhstan to world markets by Western producers. This, in turn, provides some support to the WTI price. 

"Although those drone attacks so far had limited disruption impacts on Russian crude exports, the rising frequency of those attacks is a concern that at some point it triggers some supply risks," said UBS analyst Giovanni Staunovo.

Investors will closely watch the developments surrounding a possible Moscow-Kiev ceasefire agreement that could ease sanctions and increase global supplies. The potential ceasefire talks in the Russia-Ukraine war might cap the upside for the black gold in the near term. 

Additionally, the prospect of a global trade war might weigh on the WTI. Last week, US President Donald Trump ordered his administration to consider imposing reciprocal tariffs on numerous trading partners. WTI Oil FAQs What is WTI Oil? 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. What factors drive the price of WTI Oil? 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. How does inventory data impact the price of WTI Oil 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. How does OPEC influence the price of WTI Oil? 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 traded its way into an easy fifth straight gain on Monday, climbing nearly one-third of one percent and crossing back over the 1.2600 handle.

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Money market flows were constrained to kick off the new trading week with US market dark for the President’s Day holiday. UK Average Earnings for the three months ended in December are expected to tick higher on an annualized basis on Tuesday. The headline figure for both with and without bonuses factored in is expected to print at 5.9%, compared to the previous print of 5.6%. The UK Claimant Count Change for January is also projected to swing higher to 10K net new unemployment benefits seekers over the month, compared to the previous 0.7K print. The ILO Unemployment Rate is also expected to rise to 4.5% from 4.4%. The key US data print this week will be the upcoming Meeting Minutes from the Federal Reserve’s (Fed) latest rate call, due on Wednesday. US Purchasing Managers Index (PMI) survey results are also due this week, but not until Friday. GBP/USD price forecast GBP/USD staged another intraday gain on Monday, closing north of the 1.2600 handle for the first time mid-December. The pair is grinding its way steadily higher, but price action still remains capped just south of the 200-day Exponential Moving Average (EMA) near 1.2660. Cable bidders have pushed the pair up from its last swing low into 1.2100 in January, and the current bull run has added 4.4% to GBP/USD. However, bullish sentiment is proving to be a fickle beast, and the latest upswing is still fresh out of a noisy congestion period that kept Cable bids battling around the 1.2400 handle. GBP/USD daily chartPound Sterling FAQs What is the Pound Sterling? The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE). How do the decisions of the Bank of England impact on the Pound Sterling? The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects. How does economic data influence the value of the Pound? Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall. How does the Trade Balance impact the Pound? Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.  

The USD/CAD pair flat lines near 1.4185 during the late American session on Monday.

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On Friday, US President Donald Trump maintained his drumbeat of tariff threats, stating that taxes on autos will begin as soon as April 2. It was the latest in a series of trade measures he has announced since taking office for the second time. Investors will closely monitor the developments surrounding further tariff policies. Any signs of escalating trade tensions could boost the US Dollar (USD) against the Canadian Dollar (CAD). 

On the Loonie front, the Canadian CPI data will be in the spotlight on Tuesday. The headline CPI is expected to show an increase of 1.8% YoY in January. On a monthly basis, the CPI inflation is projected to rise to 0.1% in January from a decline of 0.4% in December. In case of a softer-than-expected inflation outcome, this could drag the CAD lower and create a tailwind for the pair. 

However, a rise in crude oil prices might help limit the commodity-linked Loonie’s losses. It's worth noting that Canada is the largest oil exporter to the United States (US), and higher crude oil prices tend to have a positive impact on the CAD value. Canadian Dollar FAQs What key factors drive the Canadian Dollar? 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. How do the decisions of the Bank of Canada impact 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. How does the price of Oil impact the Canadian Dollar? 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. How does inflation data impact the value of the Canadian Dollar? 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. How does economic data influence the value of 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.  

Federal Reserve (Fed) Board of Governors member Christopher Waller noted late Monday that while inflation progress has been made, it has been "excruciatingly" slow.

Federal Reserve (Fed) Board of Governors member Christopher Waller noted late Monday that while inflation progress has been made, it has been "excruciatingly" slow. Key highlights Fed must not let uncertainty about policy paralyze action guided by data. Inflation progress in past year excruciatingly slow. Recent cpi disappointing, but could be the result of seasonally adjusted issues. Cuts appropriate in 2025 if inflation repeats 2024 pattern. Labor market remains strong, solid growth appears to be continuing in first quarter of 2025. Expects disinflation and rate cuts to resume year on year. Expects tariffs to have modest and non-persistent impact on prices that Fed should try to look through in setting policy. Seasonal effects may distort inflation data. Waiting for uncertainty to lift is a recipe for paralysis. Not putting much weight on January retail sales given impact of cold weather. Tariffs to have slight, enduring impact on prices.

Silver price edges higher and registered gains of over 0.70% on Monday as US financial markets remained closed in observance of Presidents’ Day.

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At the time of writing, XAG/USD trades at $32.35 as Tuesday’s Asian session begins, virtually unchanged. XAG/USD Price Forecast: Technical outlook The grey metal shifted from neutral to upward biased, though a quick rejection candle printed on February 14 after hitting a three-month high of $33.39 could pave the way for further downside. The Relative Strength Index (RSI) remains bullish, but it is worth noting that as XAG/USD spiked past $33.00, the RSI failed to record a higher high, indicating that a ‘negative divergence’ looms. If Silver drops below the February 17 swing low of $31.92, the grey metal would be poised to test the 100-day Simple Moving Average (SMA) at $31.15. A breach of the latter will expose the 50 and 200-day SMAs, each at $30.60 and $30.42. On the other hand, if XAG/USD rallies past $32.50, the psychological $33.00 mark would be the key resistance. Once surpassed, the year-to-date (YTD) high would be up next at $33.39. XAG/USD Price Chart – DailySilver FAQs Why do people invest in Silver? 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. Which factors influence Silver prices? 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. How does industrial demand affect Silver 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. How do Silver prices react to Gold’s moves? 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.  

AUD/JPY continued its downward movement on Monday, losing 0.42% to settle around 96.30.

AUD/JPY declines by 0.42% to 96.30 on Monday, extending its recent losing streak.RSI drops to negative territory, signaling increasing bearish pressure.The breach of the 20-day SMA confirms a shift in sentiment, putting sellers in control.AUD/JPY continued its downward movement on Monday, losing 0.42% to settle around 96.30. The break below the 20-day Simple Moving Average (SMA) reinforces the weakening trend, as buyers struggle to regain momentum. The pair has now given up most of its recent gains, with sellers gaining traction. Momentum indicators paint a bearish picture. The Relative Strength Index (RSI) has fallen sharply to 48, reflecting increased downside pressure, while the Moving Average Convergence Divergence (MACD) histogram shows decreasing green bars, suggesting that bullish attempts are fading. The pair’s inability to hold above the 20-day SMA indicates that selling momentum could intensify. If the downward trend persists, the next key support lies around 96.00, followed by 95.50. On the upside, buyers would need to push AUD/JPY back above the 20-day SMA near 96.60 to regain short-term control and shift sentiment toward a more neutral stance. AUD/JPY daily chart
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