Forex Today: US Dollar firms after Trump’s tariff ruling and hawkish Fed stance
Here is what you need to know on Wednesday, February 25:
The US Dollar (USD) is on a green note on Tuesday after recovering from Monday’s decline as investors digested the United States (US) Supreme Court ruling against President Donald Trump's tariffs and the new round of levies he announced last weekend. In addition, Several Federal Reserve (Fed) officials reiterated their hawkish stance, signaling that inflation must decline before the Fed may lower rates again, backing the Greenback. Additionally, the ADP Employment Change four-week average rose to 12.8K from 11.5K previously.
The US Dollar Index (DXY) is trading near the 97.80 price region, rising over 0.10% after two consecutive sessions of losses, as Fed President of the Bank of Chicago Austan Goolsbee remarked that he is optimistic about more interest rate cuts, but only when inflation gets back into the target area. Data from the US showed that American households are becoming increasingly optimistic about the labor market, which is showing signs of stabilizing, and that inflation has been somewhat subdued.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | -0.12% | 0.65% | -0.02% | -0.07% | -0.23% | -0.15% | |
| EUR | -0.06% | -0.18% | 0.62% | -0.07% | -0.13% | -0.29% | -0.20% | |
| GBP | 0.12% | 0.18% | 0.80% | 0.10% | 0.06% | -0.11% | -0.02% | |
| JPY | -0.65% | -0.62% | -0.80% | -0.67% | -0.72% | -0.89% | -0.80% | |
| CAD | 0.02% | 0.07% | -0.10% | 0.67% | -0.05% | -0.21% | -0.13% | |
| AUD | 0.07% | 0.13% | -0.06% | 0.72% | 0.05% | -0.16% | -0.07% | |
| NZD | 0.23% | 0.29% | 0.11% | 0.89% | 0.21% | 0.16% | 0.09% | |
| CHF | 0.15% | 0.20% | 0.02% | 0.80% | 0.13% | 0.07% | -0.09% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD is trading near the 1.1790 price region, little changed throughout the day as the European Central Bank (ECB) is effectively on hold with inflation near its 2% target.
GBP/USD is trading near 1.3510, trimming some of its intraday gains but still in the green, even after the Bank of England (BoE) Governor Andrew Bailey opened the door to further easing amid uncertainty over US trade policies.
USD/JPY rises sharply to the 155.70 level after reports that Japan’s Prime Minister Sanae Takaichi signaled caution over further Bank of Japan (BoJ) rate hikes during a meeting with Governor Kazuo Ueda last week.
AUD/USD is trading near the 0.7060 price zone, closing the American session in a neutral zone as a firmer USD battles against a hawkish Australian Dollar (AUD) backed by the Reserve Bank of Australia's (RBA) stance, as rising inflation and solid domestic fundamentals all support the Aussie.
USD/CAD is trading near the 1.3700 price zone, broadly unchanged after hitting a three-week high earlier in the day, as the spotlight centers on the Canadian Gross Domestic Product (GDP) Q4 due on Friday.
Gold is trading at $5,155, down by over 1% and cutting its four-day bullish streak after the USD firmed.
What’s next in the docket:
Wednesday, February 25:
- Australian January CPI.
Thursday, February 26:
- Tokyo February CPI.
Friday, February 27:
- Swiss Q4 GDP.
- Germany’s February flash CPI.
- Germany’s February flash HICP.
- Canadian Q4 GDP.
- US Producer Price Index (PPI).
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
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