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Currencies - Page 2

Currency and forex news with live moves of the US dollar, euro, and major pairs.

Dollar Rises as Middle East Peace Hopes Slip Away This Week

Dollar Rises as Middle East Peace Hopes Slip Away This Week

​ As trading opened on May 12, 2026, the dollar climbed after fading hopes for a Middle East peace deal rattled markets and lifted oil prices above $100 a barrel. Dollar Rebounds as Oil Shock Fuels Inflation Fears The U.S. dollar strengthened against currencies on Thursday after Donald Trump cast doubt on a ceasefire proposal with Tehran, reviving fears of disruption in energy markets. Brent crude traded near $105 a barrel, intensifying concerns that inflation could keep interest rates elevated for longer. “Peace talks are hanging by a thread,” traders warned as investors rushed toward safer assets. The euro and British pound weakened, while emerging-market currencies stayed under pressure from the greenback. Inflation Data Takes Center Stage Attention now turns to the U.S. inflation report, expected to show prices rising 0.6% in April after a 0.9% jump in March. Rising fuel costs kept markets tense ahead of meetings in Asia.

UA Finance•12 May
Dollar Slips Ahead of Nvidia Earnings; Euro Edges Higher

Dollar Slips Ahead of Nvidia Earnings; Euro Edges Higher

The U.S. dollar slipped slightly on Wednesday, trading lower amid caution ahead of Nvidia’s earnings report, which could influence market sentiment in the coming days.At 03:50 ET (08:50 GMT), the Dollar Index, which tracks the U.S. dollar against a basket of six major currencies, dipped 0.1% to 97.707. The index has gained nearly 1% over the past month.Nvidia Earnings Loom LargeThe dollar has been trading within a narrow range after the new 10% global tariff imposed by President Donald Trump took effect on Tuesday, with markets bracing for a possible increase to 15%. Although Trump reaffirmed his tariff agenda during his State of the Union address, his ability to impose new tariffs may be limited, as he will need Congressional approval for further duties.With the tariff situation in focus, the spotlight is now turning to Nvidia’s quarterly earnings, which are scheduled to be released after the close of Wall Street. The tech sector has been experiencing elevated valuations, and Nvidia's results are seen as a crucial indicator of investor sentiment around artificial intelligence (AI) investments."Nvidia will probably need to beat consensus and provide strong guidance to reassure investors," ING analysts wrote in a note. "At this stage, the downside risks from a miss seem larger than the potential upside from a beat."ING also pointed out that if the U.S. dollar were to fall alongside high-beta currencies, it could signal broader concerns about U.S. economic stability, particularly in relation to the AI sector's revaluations. However, ING believes the dollar will likely maintain its relatively weak correlation with U.S. equities, despite market uncertainty.Euro Supported by German Economic GrowthIn Europe, the euro gained 0.2%, trading at 1.1792 against the U.S. dollar, helped by positive economic data from Germany. The German economy, the largest in the eurozone, grew by 0.3% in Q4 2025, an improvement over the flat growth seen in the previous quarter.However, the euro's gains remain modest, with Friday's inflation data expected to be the key driver for the currency this week. Despite the growth, concerns about potential concentration risks in the U.S. economy continue to support buying on EUR/USD dips. ING analysts believe the support level of 1.1750-1.1760 is likely to hold for now.GBP/USD: Slight Bounce After Lower Inflation ExpectationsGBP/USD rose 0.2% to 1.3521, recovering slightly from a one-month low. This uptick came after Bank of England Governor Andrew Bailey indicated that while an interest rate cut in March remains a possibility, services price inflation—closely monitored by the central bank—has not decreased as much as expected. Earlier this month, Bailey voted with a 5-4 majority to keep interest rates steady.Yen Slips FurtherIn Asia, USD/JPY rose 0.1% to 156.00, maintaining a two-week high. Speculation around Japan’s future interest rate policy increased after media reports suggested Prime Minister Sanae Takaichi expressed concerns about further rate hikes during a meeting with Bank of Japan Governor Kazuo Ueda. This sparked speculation that political resistance could slow the BOJ’s tightening plans.Meanwhile, USD/CNY traded 0.2% lower at 6.8672, while AUD/USD surged 0.7% to 0.7106 following the release of Australian inflation data. Headline inflation for January rose 3.8% year-on-year, unchanged from December but above market expectations. Core inflation also climbed to 3.4%, its highest level in over a year, prompting markets to raise their expectations of a potential rate hike by the Reserve Bank of Australia in May.

UA Finance•25 February
Supreme Court to Tackle Multi-Billion Dollar US-Cuba Property Dispute

Supreme Court to Tackle Multi-Billion Dollar US-Cuba Property Dispute

The U.S. Supreme Court is set to deliberate on a high-stakes legal battle rooted in the 1959 Cuban Revolution. On Monday, the justices will hear arguments regarding the Helms-Burton Act of 1996, specifically focusing on the scope of Title III—a provision that allows U.S. nationals to sue entities "trafficking" in property confiscated by the Cuban government.The Corporate Giants at the CenterThe Court will examine two pivotal cases that could set a massive legal precedent:ExxonMobil vs. CIMEX: The oil giant is seeking over $1 billion from the Cuban state-owned firm for refineries and assets seized in 1960.Cruise Lines vs. Havana Docks: Major carriers including Carnival, Royal Caribbean, Norwegian, and MSC Cruises are facing claims from a firm that owned Havana’s port docks prior to the revolution.Legal Background: The End of the SuspensionWhile the Helms-Burton Act was signed decades ago, Title III remained dormant for years. Every U.S. President from Clinton to Obama suspended the provision to avoid diplomatic friction with allies like Canada and Spain. However, the Trump administration lifted the suspension, triggering a wave of approximately 40 lawsuits in 2019 and 2020.What’s at Stake?Billions of dollars in nationalized assets—ranging from sugar mills to power plants—are currently at the heart of these disputes. The Supreme Court's interpretation will determine whether Congress intended Title III to be a "powerful remedy" for claimants or if significant legal barriers will remain in place for those seeking compensation from multinational and state-owned entities.

UA Finance•22 February
The Aussie Ascendancy: Why Bank of America Now Sees AUD/USD Hitting 0.73

The Aussie Ascendancy: Why Bank of America Now Sees AUD/USD Hitting 0.73

SYDNEY/NEW YORK — In a major update to its 2026 currency outlook, Bank of America (BofA) has raised its year-end forecast for the AUD/USD pair to 0.73. This bullish revision comes as the Australian economy enters a unique phase of outperformance compared to its G10 peers.1. The Yield Advantage: RBA Finally Overtakes the FedThe primary driver behind BofA's optimism is the interest rate differential. For the first time in nearly a decade, the Reserve Bank of Australia’s (RBA) policy rates have exceeded those of the U.S. Federal Reserve.The Shift: While the Fed has pivoted toward easing to support a softening labor market, the RBA’s recent hike (the first since 2022) has made the "Aussie" the highest-yielding major currency.2. Commodity Tailwinds & A Weaker GreenbackBofA analysts highlight two additional pillars supporting the 0.73 target:Energy & Metals: A gradual but steady increase in commodity prices—especially copper and natural gas—is providing a robust trade surplus for Australia.Asian Currency Rebound: As the U.S. dollar softens against major Asian counterparts like the Yen and Yuan, the AUD is naturally catching a bid as the primary "proxy" for Asia-Pacific growth.3. The "Superannuation" Upside RiskBofA identified a "wildcard" that could push the AUD even higher: Hedge Ratios. If the historical correlation between the AUD and risk assets (like stocks) remains weak, Australia's massive $3.5 trillion superannuation funds may be forced to adjust their currency hedges, triggering a wave of "forced" AUD buying.

UA Finance•04 February
Currency Divergence 2026: Aussie Dollar Reclaims $0.70 Handle as RBA Defies Global Trend

Currency Divergence 2026: Aussie Dollar Reclaims $0.70 Handle as RBA Defies Global Trend

GLOBAL MARKETS — The U.S. Dollar’s aggressive two-day rally took a breather on Wednesday, February 4, 2026. After surging 1.5% following the nomination of Kevin Warsh as the next Fed Chair, the Dollar Index (DXY) retreated 0.2% to 97.42, eclipsed by a hawkish bombshell from the Land Down Under.1. The RBA’s Bold Move: First Hike of 2026In a move that caught many off-guard, the Reserve Bank of Australia (RBA) raised its official cash rate by 25 basis points to 3.85%.Market Reaction: The AUD/USD pair skyrocketed 1%, reclaiming the critical 0.7018 level.The Justification: RBA Governor Michele Bullock cited a "resurgence in inflation" in late 2025, with core inflation stubbornly staying above the 2-3% target band. Analysts now expect the RBA cash rate to stay higher than the US Fed funds rate for the first time in six years.2. The "Warsh Effect" vs. Manufacturing StrengthWhile the dollar slipped today, its underlying fundamentals remain robust:Nomination Impact: Markets are still pricing in a "less dovish" Fed under Kevin Warsh, who is expected to prioritize shrinking the Fed’s massive balance sheet.Economic Resilience: The ISM Manufacturing Index surged to 52.6 in January—its strongest reading since mid-2022—confirming that the U.S. industrial sector has officially returned to expansion.3. Washington Watch: Shutdown Ends, Data ResumesThe brief, four-day partial government shutdown ended Tuesday after President Trump signed a $1.2 trillion funding bill.Delayed Data: While the Non-Farm Payrolls (NFP) report for January was originally postponed, it is now expected to be released next week, providing the next major catalyst for the greenback.

UA Finance•04 February
"The Shine is Off": Citadel’s Ken Griffin Warns of Eroding Confidence in the US Dollar

"The Shine is Off": Citadel’s Ken Griffin Warns of Eroding Confidence in the US Dollar

WEST PALM BEACH, FL — Speaking at the WSJ Invest Live event on Tuesday, February 3, 2026, Ken Griffin, the billionaire founder of Citadel, delivered a sobering assessment of the U.S. Dollar’s standing in the global financial system. According to Griffin, while the U.S. remains a primary "safe harbor," the greenback has lost significant appeal over the past 12 months.1. The Erosion of Dollar PrimacyThe U.S. Dollar recently slumped to a four-year low, fueled by investor anxiety over volatile fiscal policies and the anticipation of further Federal Reserve rate cuts. Griffin pointed directly at administrative actions as a core cause.The Culprit: "Policies relating to tariffs and some of the rhetoric from the administration have taken some of the shine off of the dollar," Griffin noted.The Risk: He emphasized that protectionist trade regimes often breed "cronyism" and hurt the very consumers they are intended to protect.2. Praise for Kevin Warsh & Fed IndependenceIn a notable shift, Griffin applauded the nomination of Kevin Warsh as the next Chair of the Federal Reserve (succeeding Jerome Powell in May).3. Criticism of "Enrichment" and Government SpendingGriffin was less complimentary regarding the business dealings of the current administration.Conflicts of Interest: He questioned overseas investments into administration-linked cryptocurrency ventures, suggesting that public interest must always come before family enrichment.Fiscal Discipline: He called for a return to rigorous fiscal discipline, specifically urging the government to pay down debts accumulated during the pandemic era.4. AI and the Labor MarketAddressing the 2026 labor market, Griffin described conditions as "reasonably robust." He dismissed the idea that Artificial Intelligence is currently causing widespread job cuts, arguing that businesses have yet to realize the massive productivity gains required to trigger such shifts.

UA Finance•04 February
Canadian Dollar (CAD) Gains Ground as Oil Rally and Bond Yields Provide Fresh Tailwinds

Canadian Dollar (CAD) Gains Ground as Oil Rally and Bond Yields Provide Fresh Tailwinds

TORONTO — The Canadian Dollar (Loonie) showed resilience in mid-week trading, gaining 0.3% against the U.S. Dollar. The currency's strength is primarily driven by a resurgence in the energy sector and a significant spike in domestic sovereign yields.The Oil CatalystAs one of Canada’s primary exports, the 1.5% jump in crude oil prices acted as a direct propellant for the CAD. The USD/CAD pair fluctuated within a tight range of 1.3637 to 1.3685, reflecting a "risk-on" sentiment among commodity-linked currency traders.Bond Yields Hit 4-Week HighSupporting the currency's upward trajectory, the yield on Canada’s 10-year government bond touched a one-month peak of 3.465%. This rise in yields indicates shifting market expectations regarding the Bank of Canada’s (BoC) monetary policy path for the remainder of 2026.

UA Finance•04 February
Australia Reverses Course with Rate Hike as Markets Bet on More

Australia Reverses Course with Rate Hike as Markets Bet on More

Australia’s central bank reversed course on Tuesday, raising interest rates for the first time in two years as it struggles to rein in persistent inflation in a supply-constrained economy, prompting markets to ramp up bets on further tightening later this year.The move places the Reserve Bank of Australia alongside the Bank of Japan as one of the few developed-world central banks currently tightening policy, even as markets continue to expect rate cuts across the United States, Britain and Canada.Australia Rate Hike Signals Policy PivotWrapping up its February policy meeting, the RBA lifted the cash rate by 25 basis points to 3.85% in a unanimous decision, marking a clear pivot just six months after its last rate cut.In its statement, the central bank said it remained uncertain whether financial conditions were sufficiently restrictive, despite stronger economic momentum and renewed inflation pressures.Governor Michele Bullock struck a cautious tone, saying the decision should be seen as an adjustment rather than the start of a clearly defined tightening cycle, while stressing that policymakers would remain highly data dependent.Inflation Pressures Drive Market ExpectationsRecent economic data have reinforced the case for policy tightening. Inflation surprised to the upside in the fourth quarter, while the unemployment rate fell to a seven-month low, underscoring persistent capacity constraints in the labour market.The RBA acknowledged that private demand has been growing faster than anticipated, labour conditions remain tight and inflation is likely to stay above target for some time, making the Australia rate hike necessary to safeguard price stability.Following the decision, the Australian dollar extended gains and government bond yields jumped, as investors priced in a high probability of another rate increase as early as May.More RBA Hikes in FocusMarkets are now wagering that the February move will not be a one-off. Futures pricing suggests expectations for additional tightening this year, reflecting concerns that inflation has re-emerged after last year’s rate cuts.The RBA’s updated forecasts show inflation remaining above the midpoint of its 2%–3% target band for several years, a trajectory policymakers indicated was not acceptable.With consumer spending holding up, housing prices at record highs and credit conditions still relatively easy, analysts say risks remain skewed toward further rate hikes, reinforcing bets that the Australia rate hike marks the start of a renewed tightening phase rather than a temporary adjustment.

UA Finance•03 February
Dollar Holds Gains on U.S. Data, Fed Bets as Aussie Jumps on RBA Hike

Dollar Holds Gains on U.S. Data, Fed Bets as Aussie Jumps on RBA Hike

The dollar held gains on Tuesday, supported by upbeat U.S. economic data and shifting expectations around Federal Reserve policy, outweighing concerns over a potential U.S. government shutdown and delayed labour data.The dollar index eased slightly after a sharp two-day rally, while major currencies traded in narrow ranges. Market focus remained on the outlook for U.S. growth, central bank policy signals, and political developments across global markets.Dollar Holds Gains as Fed Outlook Supports GreenbackThe greenback has remained on firmer footing following positive U.S. manufacturing data that pointed to a return to expansion, reinforcing confidence in the broader U.S. growth narrative.Investors have also continued to price in a more cautious approach to interest rate cuts after U.S. President Donald Trump nominated Kevin Warsh as the next Federal Reserve chair, a move widely seen as reducing the likelihood of aggressive monetary easing.Analysts noted that the combination of resilient economic data and a steadier Fed outlook helped ensure the dollar holds gains, even as uncertainty lingered around fiscal negotiations in Washington.Aussie Jumps After RBA Restarts Rate-Hike CycleIn Asia-Pacific markets, the Australian dollar surged after the Reserve Bank of Australia raised interest rates for the first time in two years, catching some investors off guard.The RBA lifted its cash rate by 25 basis points to 3.85%, citing persistent inflation pressures and signalling that further tightening may be needed. The decision triggered a sharp rally in the Aussie, which also strengthened against the yen as traders increased bets on additional rate hikes later this year.The New Zealand dollar also advanced, tracking broader strength across commodity-linked currencies.Yen, Elections and Global Risks Shape FX OutlookMeanwhile, the yen stabilised after recent losses, as Japan’s finance minister downplayed remarks by Prime Minister Sanae Takaichi on the benefits of a weaker currency. Markets remain sensitive ahead of Japan’s upcoming lower house election, with investors wary that a strong result for the ruling party could open the door to expanded fiscal stimulus.Geopolitical risks eased slightly after the United States announced a trade deal with India and confirmed plans to resume nuclear talks with Iran, developments that helped support risk sentiment across global markets.Despite the calmer backdrop, strategists warned that political uncertainty and central bank divergence could continue to drive volatility in currency markets in the weeks ahead, even as the dollar holds gains against its major peers.

UA Finance•03 February
Japan PM’s Yen Weakness Comments Rattle Markets Ahead of Election

Japan PM’s Yen Weakness Comments Rattle Markets Ahead of Election

Japan’s efforts to stabilise the yen have been dealt an unexpected blow from within the government, after off-the-cuff remarks by Prime Minister Sanae Takaichi reignited market concerns over the currency’s weakness.Just as Tokyo was showing signs of progress in curbing sharp yen declines, Takaichi triggered a selloff earlier this week by highlighting the perceived benefits of a weaker currency during a campaign speech, only days ahead of a snap election she is widely expected to win.Although the prime minister later softened her stance, senior finance officials remain uneasy that Japan yen weakness comments from the country’s top leader could undermine recent attempts to shore up the battered currency, including rare coordination signals with Washington.Yen Stability Efforts Undermined by Mixed SignalsThe yen’s weakness has become a growing political issue, blamed domestically for surging import costs and increasingly cited abroad as a potential risk to global financial stability.Officials familiar with the situation said Takaichi’s remarks quickly raised concerns within her administration, prompting behind-the-scenes efforts to contain any fallout in financial markets.Over the weekend, aides moved swiftly to clarify her position via social media, with Takaichi stating she had no preference for the yen’s direction and was instead focused on building an economy resilient to exchange-rate fluctuations.Despite the clarification, analysts noted that Japan yen weakness comments clashed with the government’s broader messaging aimed at restoring confidence in the currency.Tokyo-Washington Coordination at RiskThe timing of the remarks was particularly sensitive. After weeks of heavy downward pressure, the yen had recently found some support following signs of close coordination between Tokyo and Washington, including rare rate checks by the New York Federal Reserve.Finance Minister Satsuki Katayama has repeatedly warned of potential market intervention and has said U.S. Treasury Secretary Scott Bessent shares Japan’s concerns over excessive volatility in the yen.Market participants said Takaichi’s comments appeared to contradict those efforts, with the yen giving back roughly half of its recent gains sparked by expectations of joint U.S.-Japan action.From Washington’s perspective, economists noted, such signals were unlikely to be welcomed, especially amid concerns that rising Japanese government bond yields could spill over into U.S. markets.Election Politics Add to Yen UncertaintyThe controversy also highlights a broader tension between Japan’s official currency stance and the prime minister’s long-held belief that yen depreciation can benefit the economy.Analysts argue that Japan yen weakness comments have added to uncertainty at a time when markets are already grappling with volatility driven by global trade tensions and domestic political pledges, including proposals for tax cuts and increased spending.While Takaichi’s unscripted remarks have resonated with some voters, they have also amplified concerns that political rhetoric ahead of elections could complicate Japan’s delicate balancing act between economic stimulus and currency stability.

UA Finance•03 February
Dollar Rises After Trump Nominates Warsh; Markets React

Dollar Rises After Trump Nominates Warsh; Markets React

The U.S. dollar climbed on Monday, extending gains recorded at the end of last week after President Donald Trump announced Kevin Warsh as his nominee for Federal Reserve Chair. At 04:30 ET (09:30 GMT), the Dollar Index, which tracks the currency against six major counterparts, rose 0.2% to 97.010, following a 1% jump on Friday.Warsh’s nomination sparked immediate reactions in global markets. Precious metals and other risk-sensitive assets fell sharply, while the dollar recovered ground lost earlier in the week. Analysts highlight that although Warsh favors potential rate cuts, his criticism of the Fed’s balance sheet expansion suggests he may implement measures that tighten market liquidity.“The dollar is showing renewed resilience,” ING analysts commented. “The correction following the Warsh nomination is helping to reverse last week’s depreciation, reflecting renewed investor confidence in U.S. monetary policy.”Economic Data and Fed Policy Remain in FocusInvestors are preparing for a busy week with key economic indicators, including January’s manufacturing and services activity data. The spotlight will remain on the official monthly jobs report scheduled for Friday, which is projected to show a 67,000 increase in nonfarm payrolls and a steady unemployment rate of 4.4%.Last week, the Federal Reserve held the federal funds rate steady after three consecutive 25-basis-point cuts, citing signs of stabilization in the labor market. “Policymakers are betting on stability, but a deterioration in labor data could push the Fed back toward additional cuts sooner than anticipated,” noted analysts from Payden & Rygel.Global Currencies React to Dollar MovementIn Europe, EUR/USD remained stable near 1.1850, retreating from the recent 1.20 level. German retail sales rose 0.1% in December, and eurozone manufacturing activity improved, with HCOB PMI climbing to 49.5, edging closer to expansion territory. Analysts suggest the European Central Bank is likely to keep rates unchanged this week, while monitoring the euro’s recent gains.In Asia, USD/JPY gained 0.2% to 155.00 after comments from Japanese Prime Minister Sanae Takaichi tempered expectations of imminent currency intervention. USD/CNY held steady at 6.9515, while AUD/USD dipped 0.2% to 0.6950 ahead of the Reserve Bank of Australia’s widely anticipated rate hike. Meanwhile, GBP/USD traded near 1.3790, with the Bank of England expected to maintain its current policy stance.The dollar’s rebound, spurred by Warsh’s nomination and stable Fed policy, underscores investor focus on U.S. economic indicators and the outlook for global monetary trends.

UA Finance•02 February
Greenback Gains Momentum: Warsh Nomination and Jobs Data Fuel Dollar Rebound

Greenback Gains Momentum: Warsh Nomination and Jobs Data Fuel Dollar Rebound

WASHINGTON, D.C. — The U.S. Dollar Index (DXY) extended its recovery on Monday, climbing toward the 97.10 level as the "Warsh Trade" continues to reshape global asset allocations. The sudden shift in sentiment follows President Trump’s nomination of Kevin Warsh to succeed Jerome Powell as Federal Reserve Chair, a move that has provided a powerful floor for the greenback while rattling risk assets.The "Warsh Effect": Reversing the Debasement TradeThe nomination of Kevin Warsh—a figure often associated with monetary orthodoxy and balance sheet discipline—has effectively halted the dollar's downward slide seen in late January.Monetary Policy Shift: While Warsh has signaled openness to productivity-driven rate cuts, his hawkish history regarding the Fed’s balance sheet suggests a potential reduction in money supply.Precious Metals Liquidation: The resurgent dollar has triggered a massive "positioning reversal" in commodities. Gold has retreated sharply to the $4,650/oz range, while Silver continues its volatile descent following a historic 30% plunge late last week.All Eyes on Friday’s Payrolls (NFP)The macro focus is now shifting to the January Employment Situation report due this Friday. This data will serve as the first major test for the U.S. economy in 2026.Consensus Forecast: Economists expect nonfarm payrolls to rise by 67,000 to 70,000, a modest improvement over December’s soft figures.Rate Path: With the unemployment rate tipped to hold at 4.4%, a resilient report would support the Fed's "hawkish hold" stance, potentially delaying the next projected rate cut until mid-2026.EUR/USD Struggles Under $1.20The Euro remains under pressure, failing to reclaim the 1.20 psychological handle. Trading near 1.1830 - 1.1850, the common currency is feeling the heat of the USD's broad-based rally.ECB Watch: Investors are looking toward the European Central Bank meeting later this week. While no policy change is expected, the ECB’s reaction to the Euro's recent volatility will be a key driver for the pair.

UA Finance•02 February
Dollar Recovers as Bessent Confirms No Intervention; Fed Pauses

Dollar Recovers as Bessent Confirms No Intervention; Fed Pauses

The U.S. dollar staged a rebound on Wednesday, halting a four-day slide that had pushed the currency to levels not seen in nearly four years. The recovery followed Treasury Secretary Scott Bessent’s explicit reassurance that the United States will not intervene in the dollar-yen market. Speaking to CNBC, Bessent stated the U.S. is “absolutely not” intervening and emphasized that a robust dollar relies on solid economic fundamentals rather than market manipulation.The Federal Reserve also left interest rates unchanged, as widely expected after three consecutive cuts late last year. Investors are now closely monitoring Chair Jerome Powell’s press conference for any hints on future monetary policy and updates regarding his ongoing Justice Department probe. At 14:06 ET (19:06 GMT), the Dollar Index, which tracks the greenback against six major currencies, rose 0.5% to 96.50, following a 0.9% drop the previous day.Dollar Faces Continued UncertaintyDespite the midweek rebound, the dollar remains under pressure amid growing uncertainty over U.S. economic policy and central bank independence. Last week’s rate checks on USD/JPY, often interpreted as a precursor to intervention, left traders questioning whether authorities are now targeting a weaker dollar.Analysts from ING noted that while Republican administrations historically favored a weaker dollar, President Trump’s dismissive comments regarding recent declines have fueled debate over U.S. dollar policy. Treasury Secretary Bessent is now expected to clarify Washington’s stance further, as market participants weigh the implications for both short-term and long-term currency trends.Even with the Fed maintaining rates, analysts suggest that a pause could provide temporary support to the dollar. However, if the rebound proves weak, the currency may continue its bearish trajectory, despite stable short-term U.S. yields.Global Currency Movements RespondThe euro retraced some of its gains against the dollar, with EUR/USD dropping 1.1% to 1.1910. European Central Bank officials are expected to hold interest rates steady at 2% next week, though they may consider cuts if the euro continues to appreciate and threatens to lower inflation. Austrian central bank governor Martin Kocher highlighted that a stronger euro could push the ECB off its inflation target.In other currency markets, GBP/USD fell 0.6% to 1.3765 after hitting its highest level since October 2021. USD/JPY rebounded 1.1% to 153.88, following earlier volatility linked to potential Tokyo intervention. AUD/USD dipped 0.2% to 0.6994 after Australian CPI data exceeded expectations, reinforcing bets on a possible rate hike by the Reserve Bank of Australia.The rebound in the dollar, driven by Treasury assurances and the Fed’s policy pause, has created a cautious optimism among investors. Traders are closely monitoring Powell’s remarks for guidance on future monetary policy, while global markets continue to respond dynamically to movements in the greenback.

UA Finance•02 February
Morgan Stanley Sees EUR/USD at 1.23 in Q2 2026

Morgan Stanley Sees EUR/USD at 1.23 in Q2 2026

Morgan Stanley analysts project the EUR/USD forecast 2026 to reach 1.23 in the second quarter as atypical factors continue to pressure the US dollar. According to a Friday note, the euro has rallied year-to-date, driven by unconventional catalysts that pushed USD risk premia to the widest levels since 2Q25.Unconventional Factors Weigh on the DollarThe bank notes that the recent dollar weakness is not explained by traditional interest rate differentials, which usually influence G10 currencies. Instead, unconventional developments are dominating market movements, making the dollar harder to predict. While short-term volatility may return if economic data gain influence, medium-term risks surrounding the greenback remain elevated.Implications for Europe’s Economy and EarningsA stronger euro benefits European assets in constant currency terms but creates a drag on local earnings. Morgan Stanley estimates that every 5% rise in the EUR/USD forecast 2026 reduces MSCI Europe’s annual earnings growth by 1.5–2 percentage points. Economically, a 5% euro appreciation on a trade-weighted basis could lower euro area exports by 1.5% and trim GDP growth by 0.3 points. Inflation effects are also notable, with a 10% rise in EUR/USD expected to reduce euro area inflation by approximately 30 basis points over the next two years.

UA Finance•02 February

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