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The foreign exchange market, also known as Forex, is the world’s largest financial market, with several trillion dollars traded daily. Unlike Equity markets, which are influenced by corporate results, Forex is particularly sensitive to political decisions and institutional stability.Elections, geopolitical tensions, trade policies and central bank decisions directly shape currency values.In a world where politics and economics are intertwined, understanding this link becomes essential for investors, companies and individuals exposed to currency variations.Central banks at the heart of the link between policy and currenciesCentral banks, such as the US Federal Reserve (Fed) and the European Central Bank (ECB), play a…

GBP/USD snaps a three-day winning streak, holds above 1.3450 after US PCE data.Core PCE rises 0.3% MoM, 2.9% YoY, the highest since February.Headline PCE up 0.2% MoM, annual rate steady at 2.6%.The British Pound (GBP) trades under pressure against the US Dollar (USD) on Friday, snapping a three-day winning streak as the Greenback holds firm. GBP/USD is finding a footing above 1.3450 during the American session, stabilizing after the release of the US Personal Consumption Expenditures (PCE) Price Index for July, which came broadly in line with expectations.Data from the Bureau of Economic Analysis showed that the Core PCE Price…

Canada’s real GDP contracted more than expected in Q2.USD/CAD trades in positive territory above 1.3770 after this data.Canada’s real Gross Domestic Product (GDP) declined by 0.4% on a quarterly basis in the second quarter, Statistics Canada reported on Friday. This print followed the 0.5% growth recorded in the first quarter.At an annual rate, Canada’s economy contracted by 1.6%, compared to the market expectation for a decline of 0.6%.Market reactionUSD/CAD continues to stretch higher after this data and was last seen gaining 0.2% on the day at 1.3775. GDP FAQs A country’s Gross Domestic Product (GDP) measures the rate of growth…

EUR/USD trades under pressure on Friday but holds steady above 1.1660 after US PCE data matches expectations.US core PCE Price Index rises 0.3% MoM, 2.9% YoY, the highest since February.Headline PCE increases 0.2% MoM, yearly rate holds steady at 2.6%.The Euro (EUR) is trading under pressure against the US Dollar (USD) on Friday, edging lower in early dealings before steadying around 1.1660 after the US July Personal Consumption Expenditures (PCE) inflation report came broadly in line with expectations.According to the Bureau of Economic Analysis, the Core PCE Price Index rose 0.3% Mom in July, matching forecasts and unchanged from June’s…

Until clarity emerges on the tariff front, the bias for the rupee remains depreciative, says an expert | Photo Credit: FRANCIS MASCARENHAS The rupee plunged to fresh record lows today, breaking past the all-time high of 87.97 and closing at 88.19 against the US dollar. The sharp slide came as markets grew increasingly anxious about the fallout of 50 per cent US tariffs on India’s growth trajectory and corporate earnings.“If the new duties remain in place for a year, they could shave off 60–80 basis points from India’s GDP growth. But the immediate and sharper concern lies in the risk…

Annual inflation in the United States (US), as measured by the change in the Personal Consumption Expenditures (PCE) Price Index, held steady at 2.6% in July, the US Bureau of Economic Analysis reported on Friday. This print came in line with the market expectation.The core PCE Price Index, which excludes volatile food and energy prices, rose 2.9% in the same period, following June’s increase of 2.8% and matching analysts’ estimates. The PCE Price Index and the core PCE Price Index rose 0.2% and 0.3%, respectively, on a monthly basis.Other details of the report showed that Personal Income increased by 0.4%…

The USD/CAD price analysis shows a steep rally in the Canadian dollar. Next week’s nonfarm payrolls report will keep shaping the outlook for Fed rate cuts. Data on Friday revealed that Canada’s economy contracted by 0.1%. The USD/CAD price analysis shows a steady Canadian dollar as the greenback heads for a monthly loss due to Fed rate cut expectations. At the same time, market participants are still grappling with the recent threats to the Federal Reserve’s independence. –Are you interested in learning more about crypto robots? Check our detailed guide- Market participants are still expecting a rate cut next month…

EUR/CHF holds modest gains after a two-day rebound, though intraday momentum is fading.The cross is trading just below the 100-day EMA, with resistance at the 0.9400 psychological mark.Swiss Franc demand continues to limit Euro upside, keeping the cross locked in consolidation.The EUR/CHF is trading higher on Friday, although momentum is cooling after touching the day’s peak, with the cross still on track for a second straight day of recovery following a three-day decline earlier in the week. The cross is trading near 0.9358 at the start of the American session, holding just below the 100-day Exponential Moving Average (EMA). The…

Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound, and yen held in the foreign exchange reserves | Photo Credit: Jo Yong hak India’s forex reserves dropped $4.386 billion to $690.72 billion for the week ended August 22, the Reserve Bank of India (RBI) said on Friday. The overall reserves had jumped $1.488 billion to $695.106 billion in the previous reporting week. For the week ended August 29, foreign currency assets, a major component of the reserves, decreased $3.652 billion to $582.251 billion, the data released on…

USD/CAD steadies near 1.3750, pausing a three-day losing streak ahead of key data.The US Dollar Index stabilizes around 98.00, although Fed rate cut bets continue to put pressure on the Greenback.Canada’s Q2 GDP expected to show –0.6% annualized contraction, reversing Q1’s 2.2% growth.The USD/CAD is virtually unchanged on Friday, trading flat after pausing a three-day losing streak as traders turn cautious ahead of the US Personal Consumption Expenditures (PCE) inflation report and Canada’s Gross Domestic Product (GDP), both scheduled for release at 12:30 GMT.At the time of writing, the pair is hovering near 1.3750 in the European session, after briefly…