Today's Currencies Pulse
Rupee Holds Steady as West Asia Truce Hopes Bolster Sentiment
The Indian rupee stayed flat on market optimism that a West Asia cease‑fire will hold, even as early trade saw it dip 8 paise to ₹95.78 per dollar.
How the U.S. Is Trying to Ensure the Dollar’s Dominance During Economic Turmoil
The Trump administration is negotiating new dollar currency‑swap lines with Gulf and Asian partners to reinforce the greenback’s reserve‑currency status amid rising use of the renminbi and crypto for oil trade. Treasury Secretary Scott Bessent is leading talks with the United Arab Emirates and others, proposing swaps that would supply dollars for oil‑sale transactions and reduce reliance on Chinese currency. The United States already operates six Federal Reserve‑administered swap lines, and the proposed expansion could be funded through the Treasury’s Exchange Stabilization Fund. Critics argue the moves are politically driven and unnecessary given the dollar’s continued dominance.
USDCHF Trades to New Day Lows. USDCAD Lower as Well. What Are Key Levels for Each Now?
The USDCHF pair remains trapped below its 100‑hour moving average at 0.77913, keeping sellers in charge, while a break above that level is required for a bullish shift. On the downside, the pair is testing the 61.8% retracement zone between...
Fed Signals Cuts, Market Expects 2027 Hike—New Chair Faces Mismatch
The blue line is what the Fed is communicating. 2 rate cuts this year. The orange line is what the market is pricing in, a rate HIKE by Summer 2027. Warsh starts as Fed Chairman on Friday. High on his agenda...
Interest Rates Can’t Control Today’s Inflation
Inflation is rising again in advanced economies, driven by geopolitical turmoil, surging energy prices, and fragile supply chains rather than excess demand. Central banks such as the U.S. Federal Reserve and the Bank of England have kept interest rates steady,...
José Luis Escrivá: Capital Flows, Exchange Rates, and Geopolitics - the Value of Trust in a Changing Global Order
In a BIS speech, José Luis Escrivá warned that the global geoeconomic order is shifting from multilateral cooperation to the use of economic tools as instruments of pressure, while rapid technological change reshapes money and payments. He argued that tariffs...
Powell’s Final Day Signals Shift to Neutral Policy as New Fed Chair Looms
Jerome Powell will close his tenure as Federal Reserve chair on May 15 with a nine‑word comment that the policy “center is moving toward a more neutral place.” The remark, delivered after an April 29 FOMC meeting that recorded the...
Rupee Slides, Markets Fear Spending Cuts Overlook Crisis
The markets did not like the commentary coming from the center on spending patterns. If we spend less and use less the economy slows down further. The centre of the problem is the rupee that lost another 85 paise today....
Where International Finance Meets Development: The Role of Currency Risk
Currency volatility in African markets is reshaping development outcomes by dictating who can access capital and on what terms. Firms in shallow financial systems must choose between expensive foreign‑currency loans or scarce local‑currency financing, while households face higher remittance costs...
U.S. Oil Export Boom Turns Dollar Oily
The Dollar used to have a negative correlation with oil prices, but that was when the US was a net importer. About 5 years ago, the US transformed into a net exporter and so now higher oil prices lift the...
Korea Posts $300B Surplus Amid Record Won Weakness
Two things I never thought I would see: a $300b Korean current account surplus, and a $300b surplus paired with near record won weakness against the US dollar Strange times https://t.co/iSymq2hcGb
François Villeroy De Galhau: A Long View on Monetary Policy - Three Clarifications Prompted by Three Challenges
In his final monetary speech, Bank of France Governor François Villeroy de Galhau reflected on a decade of central‑bank turbulence, from pre‑2020 low‑inflation pressures through the Covid‑induced deflation risk and the 2022‑23 inflation surge. He argued that despite these shocks,...
Central Banking Losing Relevance Amid Three Mega‑Trends
CENTRAL BANKING IN THE AGE OF THREE BIG MEGA-TRENDS: In today's newsletter, I wrote about our conversation with @economistmeg and why central banking (I think) feels less central to the big economic challenges that every country on earth seems to be...
Weekly Technical Outlook: DXY, Major Pairs & Gold
DXY, EUR/USD, GBP/USD, AUD/USD, USD/CAD, Gold Weekly Technical Outlook (Webinar Archive) https://t.co/tjBoeaPmzX Asset Chaptered on YouTube: https://t.co/H9B0oCHc9Y
Ida Wolden Bache: Policy Rate Raised to 4.25 Percent
Norway’s Monetary and Financial Stability Committee lifted the policy rate by 0.25 percentage point to 4.25% as inflation remains above the 2% target. Consumer‑price inflation is 3.6% overall and about 3% core, driven by strong wage growth and higher global...
IMF Model Shows Yuan Undervalued About 25‑30%
With a realistic current account surplus number (one that takes out the 22 downward adjustment in the goods surplus and uses a realistic estimate of the income balance), the IMF's model would suggest a 25-30% undervaluation
Mexico Delivers Final 15th Rate Cut to 6.50%
Global Central Bank Update: -Mexico cut rates for the 15th time in the cycle with a 25 bps move down to 6.50%. The board stated this will be the final cut in the easing cycle. https://t.co/l5IYmkeySJ https://t.co/669sf1Lo6O
Gold’s Grim Message
Central banks are accelerating purchases and repatriation of gold, a move the author ties to rising deglobalization. Emerging‑market central banks have more than doubled their gold reserves since the 2008 financial crisis. The surge comes amid heightened geopolitical tension, notably...
Powell’s Exit, Dollar Weakness and Inflation Data Shape Fed’s Next Move
Jerome Powell will step down as Federal Reserve chair on May 15 after eight turbulent years, just as the dollar slips more than a quarter‑percent against a basket of currencies. Investors are watching the April CPI report and a surprisingly...
China's CPI Jumps to 1.2% in April, Fueling Yuan Weakness
China's National Bureau of Statistics reported that consumer price inflation accelerated to 1.2% in April, outpacing expectations and pushing factory‑gate inflation to a 45‑month high. The data has heightened market worries that the People's Bank of China may tighten policy,...
U.S. Dollar Slides Over 0.25% as Safe‑Haven Demand Ebbs Amid Middle East Diplomacy
The U.S. dollar index dropped over 0.25% for the week ended May 8, driven by fading safe‑haven demand as President Trump affirmed a cease‑fire with Iran. The slide came despite a robust jobs report that added 115,000 jobs, well above the...
Central Banks Face Repeated Inflation Amid Supply Shocks
NEW ODD LOTS Monetary Policy in the Age of Supply Side Shocks @tracyalloway and I talk to the great Megan Greene —- always @economistmeg to us — about how central banks are dealing with one inflationary episode after another https://t.co/y1tj2H3kJm
As Trump Heads to China, Here’s How Much the Dollar Is Overvalued, According to Goldman Sachs
Goldman Sachs says the Chinese renminbi is about 20% undervalued versus the dollar. The firm expects the upcoming Trump‑Xi summit and China’s expanding trade surplus to push the yuan toward 6.50 per dollar within 12 months, implying roughly 4.5% appreciation...
As PM Modi Calls for Conserving FX, What Steps Can India Take?
Prime Minister Narendra Modi urged Indians to conserve foreign exchange as soaring oil prices push the rupee to record lows and drain reserves. The Reserve Bank of India has been selling dollars, cracking down on arbitrage and scouting ways to...
Indian Rupee Erases Recent Gains as US and Iran Fail to Reach an Agreement. What's Next?
The United States and Iran failed to reach a nuclear‑related agreement, prompting the dollar to regain modest strength. The Indian rupee erased most of its recent gains as oil‑price sensitivity and geopolitical tension weighed on the currency. Technical analysis shows...
Kiwi May Defy Hedge Fund Short Bets as RBNZ and Geopolitics Shift Outlook
New Zealand’s dollar (NZD) may buck heavy hedge‑fund short positions as the Reserve Bank of New Zealand hints at tighter monetary policy while Middle‑East tensions lift safe‑haven demand. Activist investors Carrousel Capital and Saba Capital are pressing for governance changes...
Market Outlook for the Week of 11th - 15th May
The week of May 11‑15 is data‑heavy, starting with U.S. existing‑home sales and followed by core CPI, PPI and retail sales releases that will test inflation trends. A Senate vote is expected to confirm Kevin Warsh as the next Federal...
After Winning Poll Battles, Modi Has Picked up a New Fight
After winning elections in West Bengal and Assam, Prime Minister Narendra Modi shifted focus to economic mobilisation, urging citizens to curb consumption as crude oil prices surged above $100 a barrel. He called for reduced fuel use, postponed gold purchases,...
Guindos Calls for Cautious Rate Policy Before Exit
ECB’s Guindos urges rate ‘prudence’ as he prepares to leave the central bank https://t.co/zrPWNMfuOi https://t.co/cCXOg02GW0
RBI Should Dial Back Rupee Intervention: Former Governor Subbarao
Former RBI governor Duvvuri Subbarao warned that the central bank’s aggressive rupee‑intervention policy should be scaled back. He argues the RBI should let the rupee weaken to reflect rising import costs and capital outflows, reserving rate hikes as a last resort....
Emerging Currencies Weaken as Iran Conflict Dims Risk Appetite
Emerging‑market currencies slipped against the U.S. dollar on Monday as oil prices surged past $105 a barrel and the Iran‑Israel conflict intensified. The MSCI Emerging‑Market Currency index declined 0.1%, with oil‑importing economies such as India, Chile, South Korea and Thailand...
Yen Intervention Caution Likely Capping Dollar’s Gains
Morgan Stanley expects the U.S. dollar index to retreat toward 95 as robust earnings boost equity markets and risk appetite improves, though this hinges on forthcoming U.S. data staying neutral. The strategists also see the dollar benefiting from a narrowing...
ECB Plans Two Rate Hikes in 2026 Amid Rising Inflation
ECB to hike rates twice in 2026 as inflation jumps, survey shows https://t.co/rmmGoo23tC via @NickHeubeck https://t.co/dLWVfE1Cc2
Modi Asks Indians to Stop Buying Gold, Hitting Jewelry Stocks
Prime Minister Narendra Modi urged Indians to refrain from buying gold jewelry for at least a year, citing the need to protect the nation’s foreign‑exchange reserves. The appeal came alongside calls to curb fuel consumption and discretionary overseas travel. India...
RBI Said to Be Likely Stepping Into the Market to Try and Limit the Rupee's Fall
The Reserve Bank of India is reportedly intervening in the foreign‑exchange market to curb the rupee’s slide, keeping USD/INR near 94.95 despite rising oil prices. The currency has been pressured by higher crude costs and geopolitical tension in the Strait...
Euro Adoption and Price Increases in Bulgaria: Separating Myths From Facts
Bulgaria officially adopted the euro in January 2026, ending the lev era. Early data from the European Central Bank show only a modest, one‑off uptick in consumer prices, concentrated in services, while overall inflation remained stable. Authorities mitigated price‑rise fears through...
Will the ECB Shift Tack on the Digital Euro?
The European Central Bank is reconsidering its digital euro strategy, signaling a possible delay and a broader pilot that now includes retail‑payment scenarios. Officials cite the need to refine privacy safeguards, address regulatory uncertainties, and respond to growing competition from...
Luis De Guindos: Interview with Financial Times
ECB Vice‑President Luis de Guindos told the Financial Times that the current energy‑price shock differs from the 2021‑22 inflation surge, noting that monetary policy is now tightening and fiscal space is constrained. He cautioned against postponing decisions for academic debates and...
China Fixes Currency at 3-Year High Ahead of Trump-Xi Meeting
China’s central bank intervened to hold the yuan at roughly 6.2 per dollar, a three‑year peak, just days before President Donald Trump’s summit with President Xi Jinping. State‑owned banks sold dollars and bought yuan to halt a recent slide that...
China Reflation Momentum Strengthens in April, Likely Keeping the PBOC on Hold
China’s April inflation data showed a rebound, with CPI rising to 1.2% YoY and PPI climbing to a 45‑month high of 2.8% YoY. Energy costs surged, pushing producer‑price inflation up 17.4% YoY, while food prices, especially pork, remained deflationary. Export...
ECB Teams with Private Firms to Set Standards for Digital Euro
The European Central Bank signed partnerships with the European Card Payment Cooperation, nexo and the Berlin Group to develop open payment standards for the digital euro. The collaboration aims to ready the currency for a projected 2029 launch, with a...
Yen Slides as Wall Street Rally Fuels Risk‑on Trade
JUST IN: The yen declined against most G-10 and Asian currencies in early trading amid mild risk-on sentiment from Wall Street’s rally last Friday.
BofA Says Fed Rate Outlook, Not Fundamentals, Caps Dollar Strength
Bank of America strategists say the U.S. dollar’s lackluster performance stems from market pricing of only modest further Fed tightening. The bank forecasts an 80,000‑job April payroll beat, which could shift expectations and lift the greenback.
Business Daily
Hundreds of thousands of Argentines are crossing the Andes each year to shop in Chile, where a favorable exchange rate makes well‑known clothing and electronics brands markedly cheaper. President Javier Milei’s recent economic reforms have tamed inflation, giving many Argentines extra...
Dollar Weakening Signals Imminent Rate Cuts and Market Shift
The recent behavior of the US dollar is increasingly consistent with a market anticipating intervention in the rates market ahead. Lower rates and a weaker dollar are no longer optional policies. They are becoming absolutely essential for the system to function under...
Powell’s Legacy as Fed Chair Is Fighting Inflation and Trump. He May Lose the Battle Against Both.
Jerome Powell’s tenure as Federal Reserve chair will be judged by two intertwined battles: taming the post‑pandemic inflation surge and defending the central bank’s independence from political pressure, especially from former President Donald Trump and his allies. After a series...
Bank Indonesia Launches Large‑Scale FX Intervention as Rupiah Hits Record Low
Bank Indonesia said it will conduct large‑scale, 24‑hour foreign‑exchange interventions in both domestic and offshore markets to stabilise the rupiah, which hit a record low of 17,445 per US dollar. The central bank also lowered the documentation threshold for dollar...
Monday: Fed on Hold as US Jobs Market Stabilises
The episode reviews a stabilising US labour market, solid April non‑farm payrolls and soft wage growth, which keep the Federal Reserve on hold as new chair Kevin Walsh prepares to take over. It also covers geopolitical tension from the closed...
EU and India Sign Central Banking Cooperation MoU
🇪🇺🇮🇳 I met @RBI Governor Malhotra in Basel to sign a Memorandum of Understanding (MoU) on cooperation in the field of central banking. Looking forward to continued good cooperation. Read the press release https://t.co/uFmnxvTaFg https://t.co/uCVDSJtddt
IMF Approves $1.32 Bn Package for Pakistan, Relieving Rupee Pressure
The International Monetary Fund cleared a $1.32 bn financing package for Pakistan, unlocking $1.1 bn from the Extended Fund Facility and $220 m from the Resilience and Sustainability Facility. The disbursement is expected to shore up foreign‑exchange reserves and temper recent rupee volatility.
Japan Intervenes
Japan’s central bank launched a massive currency defense on April 30, buying roughly ¥5.48 trillion (about $35 billion) as the yen slipped past the 160 per dollar mark. A second, larger outflow of ¥4.51 trillion ($29 billion) was recorded on May 7, bringing total intervention to...