Currency Hedger No Comments

Japanese Yen holds steady ahead of Trump–Xi summit, US Retail Sales data

  • USD/JPY flat lines around 157.85 in Thursday’s early Asian session. 
  • US inflation came in hotter than expected, with the PPI rising by 6.0% YoY in April. 
  • Trump will hold a high-stakes meeting with Xi Jinping in China. 

The USD/JPY pair trades on a flat note near 157.85 during the early Asian session on Thursday. The major pair steadies as traders prefer to wait on the sidelines ahead of the US President Donald Trump-Chinese President Xi Jinping summit in Beijing and the release of the US April Retail Sales data later on Thursday. 

The latest US inflation data came in hotter than expected, fueling expectations that the US Federal Reserve (Fed) will maintain elevated long-term interest rates. This, in turn, could underpin the US Dollar (USD) against the Japanese Yen (JPY). 

The US Producer Price Index (PPI) jumped 6.0% YoY in April, following the 4.3% seen in March, according to the US Bureau of Labor Statistics on Wednesday. On a monthly basis, the PPI inflation rose to 1.4% in April from 0.7% in March and much higher than the estimate of 0.5%.

Bloomberg reported on Wednesday that Trump arrived in Beijing for a state visit to China, where he will meet with Xi Jinping to discuss topics including trade and the Iran war. This is the first state visit to China by a US leader in nine years. 

Nonetheless, the potential upside for the pair might be limited amid fears of further currency intervention from Japanese authorities. Japan’s Finance Minister Satsuki Katayama said last week that “regarding recent currency moves, we confirmed that Japan and the US have been coordinating very well and have maintained close communication.” 

Currency Hedger No Comments

Canadian Dollar moves little as traders adopt caution ahead of US-China summit

  • USD/CAD remains steady as traders await the high-stakes Trump-Xi summit.
  • Trump and Xi may lower tariffs on $30 billion of non-sensitive goods, excluding items vital to national security.
  • The commodity-linked CAD may weaken as falling oil prices reduce demand for Canada’s primary export.

USD/CAD remains calm after six days of gains, trading around 1.3700 during the Asian hours on Thursday. The pair stays silent as the US Dollar (USD) moves little as market caution prevails ahead of a pivotal summit in Beijing between US President Donald Trump and Chinese President Xi Jinping. Traders will also shift their focus to the US Retail Sales report for April due later in the day.

As the world’s two largest economies attempt to stabilize their relationship, they are reportedly considering a framework to reduce tariffs on roughly $30 billion worth of goods, excluding those tied to national security. However, geopolitical tensions remain a major factor. The summit is taking place against the backdrop of the war in Iran. Washington has recently increased pressure on Tehran by imposing new sanctions on entities involved in selling Iranian oil to China and threatening banks that facilitate those transactions.

On Wednesday, the US Bureau of Labor Statistics (BLS) reported that wholesale inflation hit its highest level since late 2022. The Producer Price Index (PPI) surged to 6.0% year-over-year (YoY) in April, up from 4.3% in March and well above the 4.9% expected by the market. On a monthly basis, PPI rose 1.4%, doubling the previous month’s 0.7% and far exceeding the anticipated 0.5% increase.

The USD/CAD pair may regain its ground as the commodity-linked Canadian Dollar (CAD) may lose ground amid lower oil prices, given Canada’s status as the largest crude exporter to the United States (US).

However, Oil supply concerns also loom over the market as the US Energy Information Administration (EIA) stated that crude and fuel flows through the Strait of Hormuz dropped by nearly 6 million barrels per day in the first quarter following the outbreak of the Middle East conflict in late February.

Currency Hedger No Comments

Offshore Yuan Holds Firm on Trump-Xi Summit

The offshore yuan traded around 6.78 per dollar, holding near its strongest level since February 2023 as investors closely watched a high-stakes summit between US President Donald Trump and Chinese President Xi Jinping aimed at stabilizing relations between the world’s two largest economies. Trump arrived in Beijing on Wednesday and is set to meet Xi at the Great Hall of the People for talks covering a range of contentious issues. Trump is expected to urge Beijing to help facilitate the reopening of the Strait of Hormuz through its ties with Tehran, though he has downplayed the Iran conflict as a central topic, emphasizing trade and market access instead. Moreover, Trump has signaled that he will urge China to roll back barriers facing American companies and further “open up” its economy. The summit, delayed for weeks amid tensions tied to the Iran conflict, is being closely watched by markets for signs of a diplomatic breakthrough that could shape US-China relations and global trade.

Currency Hedger No Comments

GBP/USD Forecast – Holds modest upside while staying anchored above 100-day EMA support

  • GBP/USD trades with mild gains near 1.3550 in Wednesday’s early European session. 
  • The positive outlook of the pair remains intact above the key 100-day EMA. 
  • The immediate resistance level is seen at 1.3630; the initial support level is located at 1.3540. 

The GBP/USD pair trades on a positive note around 1.3550 during the early European trading hours on Wednesday. Nonetheless, the potential upside for the major pair might be limited, as UK political turmoil and ongoing tensions in the Middle East could weigh on the British Pound (GBP) against the Greenback. 

UK Prime Minister Keir Starmer is facing rising pressure to set a date for his departure after elections across much of the country resulted in massive losses for his ruling Labour Party. While Starmer stated he will not resign, the resulting political “noise” and rising UK gilt yields have created localized pressure on the GBP. 

Traders will closely watch the US Producer Price Index (PPI) report, which is due later on Wednesday. Markets expect the US PPI inflation to rise to 4.9% YoY in April from 4.0% in March. The core PPI, excluding volatile food and energy prices, is expected to show a rise of 4.3% YoY in April versus 3.8% prior. If the report shows a hotter-than-expected outcome, this could boost the US Dollar (USD) and create a headwind for the major pair. 

Chart Analysis GBP/USD

Technical Analysis:

In the daily chart, GBP/USD holds a mild bullish bias as spot remains above the 20-day Bollinger simple moving average (SMA) and comfortably over the 100-day SMA, suggesting underlying dip-buying interest. The Relative Strength Index (RSI) hovers close to the mid-50s, hinting at steady rather than overstretched upside momentum while price grinds higher within the Bollinger envelope.

On the topside, immediate resistance emerges at the upper Bollinger band near 1.3630, where recent rallies could stall if buyers fail to extend the breakout. On the downside, initial support is seen at the 20-day Bollinger SMA around 1.3540, followed by the 100-day SMA at roughly 1.3483; a deeper pullback would then look to the lower Bollinger band near 1.3458 as a stronger floor.

Currency Hedger No Comments

EUR/USD Forecast – Consolidates below mid-1.1700s as Iran risks, Fed bets support USD

  • EUR/USD struggles to gain any meaningful traction as a combination of factors supports the USD.
  • Fed rate hike bets and rising US-Iran tensions underpin the buck, capping the upside for the pair.
  • The technical setup warrants some caution for bearish traders and positioning for deeper losses.

The EUR/USD pair is seen consolidating the previous day’s heavy losses and oscillating in a narrow band, below mid-1.1700s, during the Asian session on Wednesday. Traders now seem hesitant and opt to move to the sidelines ahead of a meeting between US President Donald Trump and his Chinese counterpart, Xi Jinping.

In the meantime, hotter-than-expected US consumer inflation figures released on Tuesday lifted market bets for an interest rate hike by the US Federal Reserve (Fed) in 2026. Apart from this, the diminishing odds for a US-Iran peace deal, amid disagreements over Tehran’s nuclear program and the Strait of Hormuz, continue to underpin the US Dollar (USD) and act as a headwind for the EUR/USD pair.

From a technical perspective, the recent move up witnessed over the past two weeks or so has been along an upward-sloping channel. Moreover, spot prices hold above the 200-period Simple Moving Average (SMA) on the 4-hour chart, maintaining a modestly constructive near-term tone despite softening momentum.

Meanwhile, the Relative Strength Index (RSI) has eased towards the mid-40s, while the Moving Average Convergence Divergence (MACD) has slipped slightly below zero with the histogram turning negative. This hints that upside traction is losing strength even as the EUR/USD pair stays supported by its underlying trend structure.

That said, it will still be prudent to wait for a sustained break below the ascending channel support near the 1.1715 region and the 200-period SMA at 1.1692 before positioning for further losses. Acceptance below the latter would weaken the EUR/USD pair’s current constructive bias and expose deeper retracements within the broader range.

On the topside, initial resistance is aligned with the upper boundary of the parallel channel around 1.1830. A convincing breakout through the said barrier would open the way for a more decisive bullish extension.

(The technical analysis of this story was written with the help of an AI tool.)

EUR/USD 4-hour chart

Chart Analysis EUR/USD

US Dollar Price This week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Japanese Yen.

USDEURGBPJPYCADAUDNZDCHF
USD0.12%0.16%0.69%0.11%-0.15%-0.03%0.35%
EUR-0.12%0.03%0.65%-0.03%-0.29%-0.20%0.21%
GBP-0.16%-0.03%0.11%-0.05%-0.34%-0.21%0.17%
JPY-0.69%-0.65%-0.11%-0.64%-0.86%-0.73%-0.30%
CAD-0.11%0.03%0.05%0.64%-0.17%-0.09%0.22%
AUD0.15%0.29%0.34%0.86%0.17%0.12%0.51%
NZD0.03%0.20%0.21%0.73%0.09%-0.12%0.36%
CHF-0.35%-0.21%-0.17%0.30%-0.22%-0.51%-0.36%

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

Currency Hedger No Comments

Swiss Franc steadies above 0.7800 as traders brace for US PPI data

  • USD/CHF flat lines near 0.7805 in Wednesday’s early European session. 
  • Chinese and US leaders will hold talks in Seoul ahead of a high-profile leaders’ summit. 
  • SNB is expected to hold rates at zero through 2026, according to Reuters poll. 

The USD/CHF pair trades on a flat note around 0.7805 during the early European trading hours on Wednesday. Traders await the key US inflation data and continue to assess the developments surrounding US-China talks later this week. 

The South China Morning Post reported on Wednesday that US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng will hold trade and economic talks in South Korea ahead of US President Donald Trump’s official visit to China.

The Trump-Chinese President Xi Jinping summit will take place in Beijing on Thursday and Friday. Earlier on Tuesday, Trump said that he would prioritize trade discussions during his summit with Chinese President Xi Jinping, and downplayed the amount of attention they would devote to the Iran war. 

The US Producer Price Index (PPI) report will take center stage later on Wednesday. Markets expect the headline US PPI to show a rise of 4.9% YoY in April, compared to 4.0% in March, while the core PPI is projected to show an increase of 4.3% YoY in April versus 3.8% prior. Any signs of hotter inflation in the US could fuel bets on Federal Reserve (Fed) interest rate hikes later this year, which support the Greenback against the Swiss Franc (CHF). 

The Swiss National Bank (SNB) has kept its policy rate unchanged at 0%. Reuters economists predict rates will hold at zero throughout the remainder of 2026, forcing the bank to rely primarily on currency intervention to control Franc strength.

“The SNB is not willing to introduce negative rates at this stage as the bar remains higher than back in 2015 … We continue to expect the SNB to remain on hold for the foreseeable future,” said Nikolay Markov, lead economist at Pictet Asset Management.

Currency Hedger No Comments

AUD/USD – Holds steady below mid-0.7200s as bulls await Trump-Xi summit

  • AUD/USD remains on the back foot for the second straight day amid a bullish US Dollar.
  • The lack of follow-through selling warrants caution before positioning for further losses.
  • The bullish technical setup backs the case for the emergence of dip-buying at lower levels.

The AUD/USD pair struggles to capitalize on the overnight bounce from the 0.7200 neighborhood and trades with a negative bias for the second straight day on Wednesday. Spot prices, however, lack bearish conviction and currently trade around the 0.7235 region as investors opt to move to the sidelines ahead of the Trump-Xi summit.

In the meantime, the US Dollar (USD) stands firm near its highest level in over one week amid reviving bets for an interest rate hike by the US Federal Reserve’s (Fed), bolstered by Tuesday’s hot US consumer inflation figures. Furthermore, fading hopes for a US-Iran peace deal underpin the USD’s safe-haven status and contribute to capping the risk-sensitive Aussie. However, the Reserve Bank of Australia’s (RBA) hawkish outlook continues to act as a tailwind for the AUD/USD pair.

Spot prices hold well above the 100-period Exponential Moving Average (EMA), keeping a mild bullish bias. Moreover, the Relative Strength Index (RSI) hovers just above the neutral 50 line, hinting at modest upside pressure. However, the Moving Average Convergence Divergence (MACD) flattens slightly below zero and suggests only tentative momentum, making it prudent to wait for acceptance above mid-0.7200s before placing fresh bullish bets on the AUD/USD pair.

On the downside, initial support is seen at the 100-period EMA around 0.7190, where a break would expose a deeper corrective pullback and weaken the current constructive tone. As long as the AUD/USD pair remains above this moving average, dips are likely to be contained, keeping the broader focus on whether buyers can sustain the recovery and build a more convincing advance in the sessions ahead.

(The technical analysis of this story was written with the help of an AI tool.)

AUD/USD 4-hour chart

Chart Analysis AUD/USD
Currency Hedger No Comments

EUR moves little against JPY as risk aversion increases

  • EUR/JPY remains steady as the Euro declines, offsetting Yen weakness.
  • The OECD projects the Bank of Japan will increase short-term policy rates to 2% by the end of 2027.
  • Bundesbank President Joachim Nagel warned that rising energy costs make an ECB interest rate hike increasingly likely.

EUR/JPY remains flat after registering modest losses in the previous day, trading around 185.00 during the Asian hours on Wednesday. The currency cross remains stable as the Euro’s (EUR) decline is driven by a wave of risk aversion following faded hopes for Middle East peace, which effectively offsets Japanese Yen (JPY) weakness.

However, the Japanese Yen may gain ground against its major peers as the Bank of Japan’s April Summary of Opinions revealed that policymakers are considering further rate hikes as early as their next meeting, driven largely by inflation risks linked to rising oil prices.

The Organisation for Economic Co-operation and Development (OECD) has recommended that Japan primarily utilize consumption tax increases to bolster its national revenue. On the monetary front, the Bank of Japan (BOJ) is projected to raise short-term policy rates to 2% by the end of 2027, though it must remain flexible enough to modify the pace and maturity of its bond-buying activities should financial or bond market disruptions occur.

The Euro may also receive support from a hawkish tone surrounding the European Central Bank (ECB) policy outlook. Bundesbank President Joachim Nagel said on Wednesday that the probability that the central bank will need to raise borrowing costs due to the Iran war is rising. Meanwhile, ECB Governing Council member Martin Kocher said on Monday that there’s no need to delay the interest rate hikes if energy prices don’t improve swiftly.

On the data front, Japan’s current account surplus increased to JPY 4,681.5 billion in March from JPY 3,625.3 billion in the same month a year earlier. These figures surpassed market expectations of JPY 3,879 billion, marking the largest amount on record. Traders now await the Eurozone quarterly Gross Domestic Product (GDP) and Employment Change data for the first quarter of 2026 due later in the day.