The interest rate differential between two currencies powers the classic forex carry trade, where a trader earns the rate gap by borrowing low-yield and buying high-yield currency.
GDP growth impacts a country’s currency value by shaping economic performance, interest rate expectations, and capital flows into or out of that economy.
USD/JPY held steady near 159 as accelerating Japanese inflation strengthened the case for a near-term Bank of Japan rate hike.
EUR/USD extended its advance to a fourth straight session near 1.1680, supported by dollar weakness and easing Eurozone inflation expectations.
Quantitative easing is a central bank tool that expands the money supply and lowers yields through large-scale asset purchases, typically weakening a currency.
A country’s trade balance directly affects currency supply and demand, and is one of the fundamental forces behind long-term currency trends.
Gold surged past $4,600 an ounce to a fresh three-month high, up nearly 5% for the week on sustained dollar weakness.
Gold pushed above $4,500 an ounce for a third straight weekly gain, driven by safe-haven demand and Iran-linked oil price risk.
A surprise drop in US jobless claims to 206K sparked short-covering in the dollar after it hit a three-month low.
The US Treasury doubled its longer-dated bond buybacks, sending yields and the dollar lower while gold and bitcoin rallied.