Fiscal policy is how governments use spending, taxes, and transfer payments to manage the economy. It has a direct impact on currency values, even though many traders focus only on charts and headlines. There are two main types. Expansionary policy increases spending or cuts taxes to boost growth, usually during recessions. Contractionary policy reduces spending or raises taxes to control inflation when the economy is overheating. Budget deficits often signal expansion, while

The US dollar and USD/JPY broke higher at the start of the week after geopolitical tensions increased. USD/JPY remains a key driver of the broader dollar index, and its moves often spill over into EUR/USD and GBP/USD. However, USD/JPY is now close to the 160.00 level, which has previously triggered warnings of intervention from Japanese officials. Chasing USD/JPY higher near 160.00 offers weaker risk reward. Similar sharp pullbacks happened in late January and again in Februa

Markets are starting the week on edge after the US and Israel carried out coordinated strikes on Iran, reportedly killing its Supreme Leader and other senior officials. This sharply increases uncertainty around regional stability, oil supply, shipping routes and overall risk sentiment. Traders will be watching closely for retaliation or further military action, as headlines are likely to drive price action. For the Australian dollar, the timing is sensitive. It has had a stro

Currencies often move sharply after central bank announcements, but these moves are not random. Each central bank has its own style, and understanding that style helps you make sense of the forex market. Some banks move early in interest rate cycles, like the Reserve Bank of New Zealand, the Swiss National Bank, and the Bank of Canada. Others, like the Bank of Japan, usually move later. The Federal Reserve, the Bank of England, and the Reserve Bank of Australia often sit in t

This week is packed with important data, but geopolitics, especially tensions in the Middle East, may have a bigger impact on markets than economic numbers. The week starts with the US ISM Manufacturing PMI today, which gives an early look at business activity, growth momentum, supply chain conditions, and possible signals for Federal Reserve policy. However, markets may not react strongly to it as attention is likely to stay on geopolitical risks. On Tuesday, Eurozone CPI wi

USD/CHF is trading near its lowest levels in more than ten years, just above the 2011 close low around 0.7669. After a sharp drop from the January highs, price has been stuck in a tight February range, with sellers unable to secure a clear weekly close below key support. This long consolidation suggests a larger breakout may be close. If USD/CHF breaks and closes below 0.7669, it would signal a continuation of the broader downtrend, with downside targets near 0.7537 and 0.741

Currency prices are strongly influenced by interest rates, and interest rates are controlled by central banks. Central banks decide whether to raise, lower, or hold rates based on their view of the economy and inflation. Because of this, what central bank leaders say in speeches and statements is very important. When figures like Jerome Powell or Christine Lagarde speak, traders listen closely for clues about future policy changes. Markets do not only react to actual rate cha

USD/JPY’s recent breakout was driven by domestic headlines questioning how fast the BOJ would raise rates, but that move is already fading. BOJ tightening expectations remain in place after Ueda signalled hikes are still possible in March or April, and Tokyo inflation came in slightly stronger. Yields are falling and rate differentials could start to narrow. That creates risk for yen funded carry trades. If global growth slows and yield gaps shrink, the yen could strengthen,

The US Dollar Index is showing signs of a possible short-term top after failing several times near 98. This supports the idea that the recent rise may only be a correction, with the bigger trend still pointing lower, possibly below 95. There's an ascending triangle forming in the daily time frame. This pattern in a downtrend suggests trend reversal. However, support around 97.50 is still holding. If the price breaks above 98, the short-term bearish view is no longer valid, an

The New Zealand dollar remains supported by strong risk appetite and improving domestic data. Inflation expectations have risen to 2.93%, cost pressures are strong, and wage expectations are at their highest level since 2024. This raises doubts about whether the RBNZ can really wait until late in the year to lift rates. Markets are still pricing only a small chance of a July hike and around a 40% chance in September, with a December move not fully priced in. After 325 basis p