Gold recovers a major part of intraday losses and climbs closer to the $4,400 mark heading into the European session, though any meaningful recovery still seems elusive. The Iran war continues to fuel inflation fears, curbing bets for interest rate cuts, and could act as a headwind for the non-yielding yellow metal. Furthermore, the emergence of some US Dollar buying might further contribute to capping the upside for the commodity.
Fed: War fog clouds rate path – BNY
BNY strategist John Velis says the March FOMC broadly matched expectations, with no rate change and minimal forward guidance, while markets swiftly repriced toward a more hawkish path. He highlights that the Middle East conflict and higher energy prices have driven inflation expectations up, leaving the Federal Reserve (Fed) on hold and making the future rate trajectory highly uncertain.
FOMC uncertainty and shifting expectations
“The March FOMC met our expectations, with no rate changes, no major changes to the Summary of Economic Projections, and little – if any – forward guidance to the future path for policy rates. None of this surprises us, although markets were quick to price in a more hawkish path for rates thereafter. This, too, shouldn’t be terribly surprising given the increase in inflation expectations due to higher energy (and other industrial materials prices) costs and a Fed that is clearly on hold for now.”
“On February 27, the day before the start of the Middle East conflict, implied expectations from the OIS curve indicated around 60bp in cuts by December this year. As of this writing, just before the Monday open in the U.S., the market now sees nearly 18bp of tightening, essentially moving from two cuts to nearly a full hike by year end.
“While this repricing is understandable, we think the rate path is far from set in stone. The duration of the war and the increase in energy and other industrial materials prices are major unknowns. Just this morning, word of a U.S. standdown has moved markets for now.”
“We feel at a loss to assign meaningful, high-conviction probabilities to any plausible scenario. However, another scenario would be for inflation to remain elevated or rise further, taking inflation expectations with it. In that scenario, with no changes in rates, the real policy rate, net of inflation, would actually be falling, preventing the Fed from cutting the nominal rate for the remainder of the year.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Silver Price Forecast: XAG/USD weakens to $66.50, bears retain control below 100-day SMA
Silver (XAG/USD) struggles to capitalize on the previous day’s solid recovery move from the $61.00 mark, or its lowest level since December 12, and meets with a fresh supply during the Asian session on Tuesday. The white metal dives back closer to mid-$66.00s in the last hour and remains vulnerable to prolong a two-week-old downtrend.
From a technical perspective, last week’s breakdown and the daily close below the 100-day Simple Moving Average (SMA) for the first time since April 2025 were seen as key triggers for the XAG/USD bears. This break also places the commodity back into a downside phase within a broader uptrend context, as the Moving Average Convergence Divergence (MACD) turns negative and the line holds below its signal with an expanding negative histogram, signaling strengthening selling pressure.
Furthermore, the Relative Strength Index (RSI) around 33 stays below the 50 midline and leans toward oversold territory, reinforcing the downside momentum rather than showing clear exhaustion. Meanwhile, the current low near $67.00 acts as initial support, and a sustained break below this level would expose $63.00 as the next support area, followed by $60.00, where dip-buying could attempt to stabilize the broader bullish structure.
On the upside, immediate resistance emerges at the recent breakdown zone near $73.00, aligned with the 100-day SMA around $74.00, where any rebound would face initial selling interest. A daily close above that area would open the way toward $80.00 as the next resistance before the $85.00 region caps the upside.
(The technical analysis of this story was written with the help of an AI tool.)
XAG/USD daily chart
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold’s. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold’s moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
NZD/USD rises as risk sentiment improves, US Dollar consolidates
The NZD/USD pair is trading near the 0.5860 price region at the start of the Asian session, having receded almost half its intraday gains late in the American session.
The earlier gains came amid a boost in global risk appetite, which rose after Donald Trump signaled a potential de-escalation of tensions with Iran, stating that talks show “major points of agreement” and expressing hopes for a meeting soon. The headlines reduced demand for safe-haven assets and supported risk-sensitive currencies like the Kiwi.
On the US side, the US Dollar Index (DXY) is trading below the 100.00 mark at 99.10, as investors reassess the Federal Reserve’s policy outlook.
Meanwhile, the New Zealand Dollar finds additional support from stable sentiment in Asia and firm commodity dynamics, though gains remain capped by lingering uncertainty about global growth and trade conditions.
Short-term technical analysis:
In the 4-hour chart, NZD/USD trades at 0.5856. The near-term bias leans neutral-to-bullish as price holds above clustered horizontal support and stabilizes after the recent pullback. Spot is trading just above the 20-period Moving Average (0.5837), while the 100-period Moving Average around 0.5884 still caps the broader recovery, outlining a shallow upside grind rather than a clear trend. The Relative Strength Index at 53 signals balanced but improving momentum, consistent with buyers attempting to regain control without entering overbought territory.
Immediate support sits at 0.5842, reinforced by the nearby 20-period Moving Average, with a break exposing the next downside level at 0.5804, followed by 0.5763. On the topside, initial resistance emerges at 0.5881, aligning with the 100-period Moving Average overhead and acting as the key barrier for a more decisive bullish extension. A sustained move above 0.5881 would open the way toward higher levels, while failure to hold 0.5842 would shift focus back to the lower supports and weaken the nascent positive tone.
(The technical analysis of this story was written with the help of an AI tool.)
XRP rises on Trump’s Iran strike suspension, ETF inflows improve
Ripple (XRP) is testing its rebound strength, rising by nearly 3% on Monday to $1.42. The upswing from the daily low of $1.36 follows United States (US) President Donald Trump’s order to the Department of War to suspend planned attacks on Iran’s energy infrastructure amid ongoing talks between the nations.
XRP tests recovery potential as Trump delays strikes on Iran
President Trump has directed the Department of War to suspend attacks on Iran’s power plants and energy infrastructure, citing productive talks between the two nations. Trump said that discussions will continue throughout the week, aiming at resolving hostilities in the Middle East.
“The United States and Iran have had productive discussions over the past two days toward fully resolving hostilities in the Middle East. As talks continue this week, I’ve ordered a five-day pause on any military strikes against Iranian energy infrastructure, contingent on progress,” Trump wrote on Truth Social.
Crypto prices generally rebounded following Trump’s directive, with XRP rising above $1.42. As reported, sentiment had deteriorated over the weekend as Trump warned that the US would strike Iranian power plants and energy infrastructure unless the chokehold on the Strait of Hormuz is removed.
In its quest to retaliate against the US and Israel’s attacks, Iran has restricted passage through the Strait of Hormuz and attacked energy and Oil facilities across Gulf countries. As a result, Oil prices skyrocketed past $100, putting the global economy at risk of higher inflation. The price of Oil has adjusted to $88 post Trump’s directive.
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XRP ETF inflows mildly return
US-listed XRP spot Exchange-Traded Funds (ETFs) attracted minor inflows of $1.98 million on Friday following two days of muted activity. CoinGlass data shows a minor positive turnaround, with weekly inflows averaging $635,000 through Friday.
Cumulative inflows stand at $1.21 billion and net assets at $1.01 billion, according to SoSoValue data. Inflows often support a positive outlook for XRP by shaping sentiment as risk appetite improves.
Technical outlook: XRP reclaims key support
XRP is trading above $1.42 amid a neutral near-term bias. Still, the price oscillates well below the clustered 50-day, 100-day and 200-day Exponential Moving Averages (EMAs), which all run above $1.49 and underscore a broader downtrend. The long-running descending resistance trend line from the $3.66 record high, which has capped multiple recovery attempts, remains intact overhead, framing the current bounce from the mid-$1.30s as corrective within a larger bearish structure.
Momentum shows fading upside pressure, with the Moving Average Convergence Divergence (MACD) green histogram bars easing after a recent positive stretch and the MACD line still marginally positive but rolling over on the daily chart, while the Relative Strength Index (RSI) at 49 stays near neutral territory, reinforcing a consolidative tone rather than a sustained breakout.
Initial resistance aligns near $1.45, where recent daily highs converge with short-term exhaustion signals, followed by a more important barrier around $1.54, the latest swing high that failed beneath the descending trend line. A daily close above $1.54 would be needed to challenge the broader bearish framework and expose the $1.67 zone, where the shorter exponential averages begin to cluster.
On the downside, immediate support appears around $1.40, close to the recent pivot area, with a break lower opening the way toward the $1.36 intraday low and then $1.32, where prior reaction lows emerge as the next demand areas. A decisive loss of $1.32 would reassert the dominant downside trend and could drag XRP back toward the psychological $1.12 region.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin’s market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
(The technical analysis of this story was written with the help of an AI tool.)
TTF gas: LNG shock ends surplus era – Rabobank
Rabobank’s Florence Schmit and Joe DeLaura argue the Ras Laffan strike and extended Hormuz closure have effectively ended the LNG glut, forcing a sharp repricing of TTF gas. They now see Q2 2026 TTF at €61/MWh, with full-year 2026 around €50/MWh and 2027 at €42/MWh, as European buyers compete with Asia for constrained cargoes.
European benchmark moves into deficit
“This latest escalation in the Gulf has forced a significant reassessment of the near-term LNG balance and our forecast trajectory. When we last revised our outlook, we had already priced in a closure of the Strait of Hormuz through early April, as Iran had effectively halted maritime traffic after multiple strikes on merchant vessels and coastal infrastructure, reducing tanker movements to near zero and disrupting roughly one-fifth of global LNG flows.”
“The situation has since deteriorated materially and as a result, we must raise our forecast again to reflect this large, multi-year capacity loss. In addition, we now expect the Strait of Hormuz to remain effectively closed until late-April, with LNG supply curtailments lasting significantly longer.”
“As a result, we now expect total available LNG supply in 2026 to be around 443 million tons—almost unchanged from 2025 levels of 442 million tons. New U.S. LNG additions this year will no longer offset outages across the Middle East and North Africa (with Egypt remaining a net importer through 2026). Even under assumptions of modest LNG demand growth, the market moves into deficit.”
“With a potential late-April Hormuz reopening, a restoration of energy flows is unlikely before July or August given the time it needs to backfill supply and return production. A return to pre-war flows has been rendered impossible after the attacks on Qatari LNG infrastructure.”
“We are raising our Q2 TTF gas forecast to €61/MWh, with Q3-Q4 also higher at €50/MWh and €48/MWh. Given the current supply shortfall and the expected easing of restrictions later in the year, we continue to expect a significant Q2 price premium over later quarters. With both Asia and Europe competing for limited cargoes, the region that moves first will dictate the other’s response.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
EUR/USD Forecast: Euro buyers hesitate as mood sours
EUR/USD struggles to hold its ground after opening with a bearish gap and trades in the red below 1.1550 on Monday. The risk-averse market atmosphere helps the US Dollar (USD) gather strength and makes it difficult for the pair to stage a rebound.
Euro Price This week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.09% | 0.18% | 0.10% | 0.07% | 0.65% | 0.50% | 0.14% | |
| EUR | -0.09% | 0.10% | 0.04% | -0.02% | 0.55% | 0.42% | 0.06% | |
| GBP | -0.18% | -0.10% | -0.11% | -0.12% | 0.47% | 0.31% | -0.11% | |
| JPY | -0.10% | -0.04% | 0.11% | -0.09% | 0.52% | 0.34% | -0.08% | |
| CAD | -0.07% | 0.02% | 0.12% | 0.09% | 0.61% | 0.44% | 0.07% | |
| AUD | -0.65% | -0.55% | -0.47% | -0.52% | -0.61% | -0.15% | -0.58% | |
| NZD | -0.50% | -0.42% | -0.31% | -0.34% | -0.44% | 0.15% | -0.42% | |
| CHF | -0.14% | -0.06% | 0.11% | 0.08% | -0.07% | 0.58% | 0.42% |
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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
EUR/USD gained more than 1% in the previous week as the European Central Bank’s (ECB) hawkish tone helped the Euro find demand.
Early Monday, escalating tensions in the Middle East triggered an intense flight-to-safety and supported the USD.
Over the weekend, United States (US) President Donald Trump delivered an ultimatum to Iran, saying that they will “obliterate” Iran’s power plants if they refuse to open the Strait of Hormuz within 48 hours.
In response, Iran said that they will retaliate and target all US-linked energy infrastructure in the Middle East if the US attacks its power plants. Additionally, Iran’s Revolutionary Guards said that the Strait of Hormuz will be completely closed if the US carries on with its threats.
Reflecting the negative shift seen in risk sentiment, US stock index futures lose between 0.9% and 1.2% in the European morning on Monday. In case the selloff in US stocks gathers momentum after the opening bell, the USD could preserve its strength and weigh on EUR/USD. On Tuesday, preliminary March Manufacturing and Services Purchasing Managers’ Index (PMI) data from Germany, the Eurozone and the US will be watched closely, as they could provide key insights into the impact of rising Oil prices on the private sector’s input inflation.
EUR/USD Technical Analysis:
In the 4-hours chart, EUR/USD trades at 1.1532. The technical outlook points to a loss of bullish momentum as the Relative Strength Index (RSI) indicator declines toward 50, while the pair tests the 20-period and the 50-period Simple Moving Averages, located in the 1.1530-1.1520 region. The broader setup remains capped by the descending 100- and 200-period SMAs clustered well above the market, which limits trend extension and frames the advance as corrective within a broader downside context. Bollinger Bands are relatively flat with price sitting close to the middle band, indicating contained volatility.
In case the pair drops below the 1.1530-1.1520 area, 1.1500 (static level, round level) could be seen as the next support before 1.1460-1.1450, where the lower Bollinger Band coinscides with a static level. On the topside, initial resistance area emerges at 1.1590-1.1610 (100-period SMA, upper Bollinger Band) ahead of 1.1670 (static level).
(The technical analysis of this story was written with the help of an AI tool.)
Euro FAQs
The Euro is the currency for the 20 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%).
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.
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.
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.
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.
Crypto Market Overview: Bitcoin loses $69,000 as war escalates – River, Sign, and DeXe rise through
Bitcoin (BTC) trades below $69,000 at press time on Monday, pulling down Ethereum (ETH) and Ripple (XRP) below $2,100 and $1.40, respectively, as the Middle East war escalates, involving the US, Israel, and Iran. The war is weighing down on the broader cryptocurrency market sentiment, with liquidations of over $300 million in the last 24 hours.
Amid corrective measures across the market, River (RIVER), Sign (SIGN), and DeXe (DEXE) extend gains over the last 24 hours, with bulls aiming to break above key resistances.
Trump’s threat to Iran falters the crypto market’s sentiment as liquidations surge
US President Donald Trump has threatened to bomb Iran’s power plant unless they reopen the Strait of Hormuz, which could stabilize the volatile Oil prices and ease inflation risk across Asia and Europe.
Still, the threat has reinfused fear into the crypto market, leading to forced liquidations. According to CoinMarketCap’s Fear and Greed Index, which stands at 25, suggesting that fear is gripping investor sentiment. If it drops below 20, it would indicate extreme fear in the market, risking a steeper correction in Bitcoin and major altcoins.
Meanwhile, CoinGlass data shows that the crypto market suffered total liquidations of $335 million over the last 24 hours, led by $241 million in long liquidations, reflecting a bullish wipeout.
Top Crypto Gainers: River, Sign, and DeXe extend gains
River trades near $30 at press time on Monday, holding the 15% gains from the previous day. The near-term bias is mildly bullish, as price holds well above the 50- and 100-day Exponential Moving Averages (EMAs) at $19.20 and $17.24, respectively, keeping the broader uptrend intact despite recent volatility.
RIVER holds above the 50% retracement level at $25.22, measured from $87.60 to $7.26, which has now been broken and turns into nearby support, underpinning the latest breakout. As long as RIVER holds above $25.22, focus stays on the next Fibonacci resistance level at the 78.6% retracement at $51.41.
The Moving Average Convergence Divergence (MACD) line remains above its signal line and in positive territory, while the histogram stays positive, suggesting sustained upside momentum rather than a topping pattern. The Relative Strength Index (RSI) at 67 is close to overbought but not extreme, suggesting strong buying pressure and scope for further gains before a deeper correction.
On the downside, initial support is seen at $25.22, followed by the rising 50-day EMA at $19.20, where a deeper pullback would be expected to attract dip buyers and protect the broader bullish tone.
At the same time, DeXe is trading above $7 on Monday, sustaining its 37% gains from the previous week. The near-term bias is bullish as DEXE extends above the 200-day EMA while the 50-day and 100-day EMAs mark a Golden Cross.
The MACD line remains above its signal line and the zero line, with a positive histogram suggesting strengthening upside momentum. The RSI at 85 signals overbought conditions, suggesting stretched upside and a growing risk of a corrective pause, even as buyers retain control.
Immediate resistance is aligned with the 78.6% Fibonacci retracement at $8.75, measured from $16.63 to $1.72.
On the downside, initial support emerges at the 200-day EMA at $5.29, followed by the 50% retracement at $4.85 if profit-taking deepens.
Meanwhile, Sign is up 4% at the time of writing on Monday, extending gains above the $0.0500 psychological level. The rising 50- and 100-day EMAs are on the verge of a bullish crossover, which could confirm the near-term bullish bias.
The MACD remains just above the zero line, with the MACD line edging over its signal line and a modest positive histogram, suggesting rebuilding upside momentum after the recent consolidation. The RSI at 72 stays in overbought territory but has flattened, indicating strong but no longer accelerating buying pressure.
Initial support lies at the recent breakout area near $0.0500, followed by the resistance-turned-support R2 Pivot Point at $0.04762.
On the upside, immediate resistance lies at the R3 Pivot Point at $0.056, and a sustained close above this level could extend the uptrend toward the R4 Pivot Point at $0.064.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling declines as US prepares ground operation to seize Iran’s Kharg Island
The GBP/USD pair faces some selling pressure near 1.3320 during the early Asian session on Monday, pressured by risk-off sentiment. Ongoing conflicts in the Middle East fuel demand for safe-haven currencies such as the US Dollar (USD) and create a headwind for the major pair.
The Jerusalem Post reported early Monday that the US is considering launching a ground military operation to seize the Iranian island of Kharg. A US official confirmed to the Post that “the US military has accelerated the deployment of thousands of Marines and Navy personnel to the Middle East.”
US President Donald Trump said on Saturday that they will “obliterate” Iran’s power plants, starting with the biggest one, if they refuse to open the Strait of Hormuz within 48 hours.
The Bank of England (BoE) kept interest rates steady at 3.75% at its March meeting on Thursday, as widely expected. BoE Governor Andrew Bailey said that the Middle East conflict will cause a “shock to the economy” that will push up inflation in the near term, adding that restoring safe shipping through the Strait of Hormuz is key to addressing energy price rises.
Pound Sterling FAQs
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).
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.
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.
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.
Middle East Conflict Latest: Trump gives Iran 48-hour ultimatum to open Strait of Hormuz
Here is a rundown of latest headlines surrounding the crisis in the Middle East as the United States (US) and Israel’s war against Iran enters the fourth week:
- US President Donald Trump said on Saturday that they will “obliterate” Iran’s power plants, starting with the biggest one, if they refuse to open the Strait of Hormuz within 48 hours.
- Iran warned that it will retaliate and target all US-linked energy infrastructure in the Middle East if the US attacks its power plants. In a statement published on Sunday, Iran’s Revolutionary Guards said that the Strait of Hormuz will be completely closed if the US executes threats against its energy facilities, adding that companies with US shares will be ‘completely destroyed.’
- Iran’s representative to the United Nations’ maritime agency stated that the Strait of Hormuz remains open to all shipping, excluding vessels linked to its enemies.
- In a joint statement released on Saturday, foreign ministers of the Group of Seven (G7) countries called for “immediate and unconditional cessation of all attacks by Iran,” and reiterated that the G7 stands ready to take necessary steps to support the global energy supply.
- Iran fired long-range missiles for the first time since the beginning of the conflict and hit the southern Israeli town of Dimona, located near military bases and Israel’s Negev Nuclear Research Center. The International Atomic Energy Agency said it had received no indication of damage to the nuclear facility. The BBC reported that more than 160 people have been injured – some seriously – in the attack.