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USD Weakens on Softer Inflation Data as Markets Eye Fed Signals and Geopolitical Risks

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Forex Market 

USD Softens on Cooling Inflation, Focus Shifts to Fed Signals and Geopolitical Risks
The USD weakened following softer-than-expected U.S. inflation data, with both headline and core CPI coming in below forecasts, prompting a broad lift across major currencies including the AUD, EUR, and GBP. Risk-sensitive currencies initially gained momentum, with AUD/USD rebounding after testing lows, while EUR/USD and GBP/USD pushed toward recent highs. However, the move faded into consolidation as markets turned cautious. Ongoing geopolitical tensions between the U.S. and Iran, coupled with the lack of progress in negotiations, have weighed on overall risk sentiment, limiting further upside in FX. Looking ahead, attention now shifts to upcoming Fed speeches and key economic releases, which are expected to provide further clarity on the policy outlook and drive near-term direction in currency markets.

General Market

Wall Street

  • Dow Jones: -0.6% to 47,917
  • S&P 500: -0.1% to 6,817
  • Nasdaq: +0.4% to 22,903

Asia-Pacific

  • Nikkei: +1.8% to 56,924
  • Shanghai Comp: +0.5% to 3,986
  • ASX 200: -0.1% to 8,961

Europe

  • FTSE: 0.0% to 10,601
  • DAX: 0.0% to 23,804
  • CAC: +0.2% to 8,260

 

Headlines to Watch

United States

  • Fed speakers (Bowman, Williams, Barkin) in focus for policy signals
  • University of Michigan sentiment drops sharply to 47.6
  • Inflation expectations rise, complicating Fed outlook

Global / Geopolitics

  • No agreement reached in U.S.–Iran talks
  • Rising Middle East tensions weigh on market sentiment
  • Oil price volatility driven by geopolitical uncertainty

Asia-Pacific / Australia

  • NAB Business Survey (Mar) due this week
  • Focus on impact of higher fuel prices and global tensions on activity
Currency Pair Mid-market Rate
AUD/USD 0.7015
AUD/NZD 1.2096
AUD/JPY 112.06
AUD/CNY 4.7927
AUD/EUR 0.6011
AUD/GBP 0.5240
AUD/HKD 5.4950

 

 

 

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