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Reserve Bank of New Zealand (RBNZ) Assistant Governor Karen Silk said that the central bank is yet to see medium-term inflation pressures emerge, but it’s prepared to respond aggressively if they appear, Bloomberg reported on Friday.Key quotesThere’s no early signs there at the moment of that this is definitively going to flow into really strong second round effects.If the data turned round and showed that there were definitive second round effects coming through, this was going to get an awful lot worse, then you always keep that option open.No need to await quarterly CPI data to act, must adopt more…
Gold (XAU/USD) stages a rebound on Thursday as the US Dollar (USD) edges lower following fresh headlines surrounding a potential US-Iran peace deal and softer US inflation data. At the time of writing, XAU/USD is trading around $4,480 after hitting an intraday low of $4,366 earlier in the day, its lowest level in two months.Axios reported on Thursday that the US and Iran have reached a preliminary 60-day agreement to extend the current truce, though the deal still awaits final approval from US President Donald Trump. This comes after US armed forces carried out a second “defensive” strike this week…
The Euro (EUR) trades lower for the third consecutive day against the US Dollar (USD) on Thursday. Price action remains contained within a roughly 80-pip range around 1.1600, but technical indicators show a fading momentum, with the US-Iran ceasefire under threat and US Personal Consumer Expenditures (PCE) Prices Index set to show rising inflationary pressures.Market sentiment soured on Thursday following news reporting fresh US attacks on Iran. Tehran also affirmed that it launched a strike on a US base in the Gulf, and Kuwait reported interceptions of hostile missiles and drones. These skirmishes have pushed back hopes of a swift…
BNY’s Geoff Yu argues that steepening in G10 bond curves and stagflation concerns are generating fixed income-based rebalancing signals that should benefit the Pound and Japanese Yen. Poor performance of gilts and JGBs, combined with political uncertainty in the UK and persistent pass-through issues in Japan, is expected to draw some bids into GBP and JPY.Stagflation fears aid Pound and Yen”In contrast to equities, fixed income-based rebalancing has generated more signals due to significant steepening across key G10 markets as inflation expectations surged throughout the month.””GBP and JPY should also find some bids: gilts have performed poorly due to the…
Gold (XAU/USD) remains under some selling pressure for the third straight day and drops to sub-$4,400 levels or a fresh two-month low during the Asian session on Thursday. The risk of a further escalation of tensions in the Middle East underpins the US Dollar’s (USD) reserve currency status, which continues to weigh on the commodity. Furthermore, expectations that global central banks will adopt a more hawkish stance to counter rising inflation turn out to be another factor driving flows away from the bullion.A US official told Reuters that the US military carried out fresh strikes in Iran on Wednesday, targeting…
The dollar held firm near a one-week high on Thursday on a Reuters report that the U.S. had carried out new strikes in Iran targeting a military site, while the yen softened towards a level that triggered central bank intervention last month. The strikes complicated peace talks underway between Washington and Tehran. Earlier on Wednesday, President Donald Trump had said he was “not satisfied” on a deal with Iran, and dismissed an Iranian state media report that Iran and Oman would jointly manage shipping through the Strait of Hormuz as part of a peace deal. Oil prices rebounded and the…
Companies in the US and UK ramped up currency hedges last quarter as the war in Iran roiled global markets, an industry survey shows.Corporate treasurers on average protected 57% of their foreign-exchange exposure using financial instruments in the first three months of the year, up from 49% in the fourth quarter, according to currency hedging and cash-management platform MillTech. It was the highest level since the firm began querying corporations in the first quarter of 2024. BloombergInternational events, including the US capture of Venezuelan President Nicolas Maduro in January and the surge in energy prices as a result of the…
The US military carried out new strikes in Iran targeting a military site that posed a threat to US forces and commercial traffic in the Strait of Hormuz, Reuters reported on Wednesday.The official said that the US military has also intercepted and shot down multiple Iranian drones that posed a similar threat. Separately,l Fars News Agency reported that three explosions were heard east of Bandar Abbas and air defences were activated for several minutesMarket reaction Crude oil prices attract some buyers following this headline. At the time of writing, the West Texas Intermediate (WTI) is up 0.95% on the day at…
Economists said the interventions were aimed at stabilising the rupee, which depreciated about 9.5 per cent against the dollar during the fiscal year. | Photo Credit: iStockphoto The Reserve Bank of India recorded its largest net sale of foreign currency in at least 15 years, and its outstanding position in the forward market hit a decadal high in FY26. These measures were a response to the rupee’s weakness, driven by US tariff-related uncertainty and capital outflows. The rupee lost approximately 9.5 per cent against the dollar in FY26.Spot market intervention swells to historic highsRBI’s net purchase or sale of dollars…
TD Securities’ James Rossiter argues that recent UK GDP data may overstate underlying momentum due to problematic seasonal adjustment by the ONS. Using a double-seasonal adjustment approach inspired by the San Francisco Fed, he finds Q1 and Q2 growth inflated and H2 understated, implying 2026 Q1 GDP could be around 0.25ppt lower and later quarters stronger than reported.Questioning strength in UK growth data”UK GDP growth out-paced the rest of the G10 in 2025H1, and is again top of the charts for 2026Q1 data released so far.””But speculation has risen that there is a growing issue with the ONS’ seasonal factors…