Forex Today: US Dollar edges higher, traders brace for US PMI releases

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 New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.01%	0.06%	0.10%	-0.01%	0.11%	0.26%	-0.00%
EUR	0.01%		0.10%	0.09%	0.00%	0.10%	0.28%	-0.01%
GBP	-0.06%	-0.10%		0.04%	-0.08%	0.03%	0.20%	-0.10%
JPY	-0.10%	-0.09%	-0.04%		-0.12%	0.01%	0.14%	-0.11%
CAD	0.01%	-0.01%	0.08%	0.12%		0.13%	0.27%	-0.01%
AUD	-0.11%	-0.10%	-0.03%	-0.01%	-0.13%		0.17%	-0.14%
NZD	-0.26%	-0.28%	-0.20%	-0.14%	-0.27%	-0.17%		-0.30%
CHF	0.00%	0.00%	0.10%	0.11%	0.01%	0.14%	0.30%

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).

The United States is extending the ceasefire with Iran at Pakistan’s request as US President Donald Trump waits for a unified proposal from Iran. However, tensions remain high as Tehran keeps a tight grip on the Strait of Hormuz, controlling passage through the trade route and firing on ships.

Trump said that there is "no time pressure" in dealing with the ceasefire or talks with Iran and that there is "no time frame" on when the war might end. Meanwhile, Iran’s top negotiator and parliament speaker, Mohammad Bagher Ghalibaf, stated Israel’s warmongering and “flagrant” ceasefire breaches made reopening the Strait of Hormuz “impossible”.

EUR/USD currently trades near 1.1700, consolidating after sessions of volatility driven by geopolitical tensions in the Middle East.

USD/JPY gains traction near multi-decade highs around 159.60 in the European morning on Thursday. Japanese authorities have intensified warnings and are prepared to take "decisive" action as the pair hovers around the critical 160.00 mark.

GBP/USD edges lower below 1.3500 despite hotter UK Consumer Price Index (CPI) inflation data. The headline inflation rose to 3.3% in March, versus 3.0% prior, in line with the market consensus.

AUD/USD declines to 0.7150 in the European morning. Data released by S&P Global on Thursday showed that the preliminary reading of Australia's S&P Global Manufacturing Purchasing Managers Index (PMI) jumped to 51.0 in April from 49.8 in the previous reading.

Gold (XAU/USD) has fallen nearly 0.40% as markets grapple with ongoing tensions and a blockade of the Strait of Hormuz. Continued blockage of the Strait of Hormuz has boosted energy costs, which stoke inflation fears and raise the bar for cutting rates.

US Dollar FAQs

What is the US Dollar?

The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

How do the decisions of the Federal Reserve impact the US Dollar?

The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

What is Quantitative Easing and how does it influence the US Dollar?

In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

What is Quantitative Tightening and how does it influence the US Dollar?

Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.