ไทม์ไลน์ข่าวสาร forex
22:35 Canadian Dollar flubs bullish momentum, but pumps the brakes on losses
The Canadian Dollar (CAD) snapped a meager two-day win streak against the US Dollar (USD) on Wednesday. The Loonie pared limited gains against the Greenback, but held steady near the 1.3700 handle during the midweek market session.
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Canadian Dollar FAQs What key factors drive the Canadian Dollar? The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar. How do the decisions of the Bank of Canada impact the Canadian Dollar? The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive. How does the price of Oil impact the Canadian Dollar? The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD. How does inflation data impact the value of the Canadian Dollar? While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar. How does economic data influence the value of the Canadian Dollar? Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
Canadian Dollar FAQs What key factors drive the Canadian Dollar? The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar. How do the decisions of the Bank of Canada impact the Canadian Dollar? The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive. How does the price of Oil impact the Canadian Dollar? The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD. How does inflation data impact the value of the Canadian Dollar? While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar. How does economic data influence the value of the Canadian Dollar? Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
22:14 GBP/JPY trades near multi-month highs with bullish trend intact
The British Pound (GBP) strengthens against the Japanese Yen (JPY) on Wednesday after posting minimal losses on Tuesday, extending its bullish momentum near YTD highs.
GBP/JPY trades just below year-to-date highs near 198.35 in the late American session.The pair remains supported within a rising channel, with a trend structure that is the firmly bullish.Immediate resistance seen at 199.00 and the December 2024 high at 198.96.The British Pound (GBP) strengthens against the Japanese Yen (JPY) on Wednesday after posting minimal losses on Tuesday, extending its bullish momentum near YTD highs. GBP/JPY is trading on the front foot since last week, supported by broad Yen weakness and firm demand for the Pound amid diverging monetary policy outlooks.At the time of writing, GBP/JPY is trading just shy of its year-to-date highs around the 198.35 mark during the late American session. That said, the Yen is broadly weaker across the board, weighed down by the Bank of Japan’s latest Summary of Opinions, which reflected a cautious stance on further policy tightening. The central bank's reluctance to commit to a clear rate hike timeline — despite signs of sticky inflation — has reinforced the policy divergence narrative, keeping the Yen on the defensive.In the UK, Bank of England (BoE) Governor Andrew Bailey and Deputy Governor Dave Ramsden reinforced the view that interest rates are likely to fall in the coming months, citing signs of slack in the labor market. Bailey noted slowing wage growth and rising economic inactivity as evidence of easing inflationary pressures, though he also expressed concern over the reliability of labor data. Despite these dovish undertones, market participants still anticipate a cautious easing path, keeping underlying support for the Pound intact.This divergence in monetary policy has created a significant yield differential, making the Pound more attractive to investors. The higher interest rates in the UK support carry trade flows that favor GBP over the low-yielding Yen, putting upward pressure on the GBP/JPY exchange rate.From a technical standpoint, GBP/JPY remains comfortably within a rising parallel channel, with bullish structure intact. The pair has been carving higher highs and higher lows since mid-April and continues to trade well above the 50-day Exponential Moving Average (EMA), currently around 194.25. This level has consistently acted as dynamic support.Momentum indicators support the bullish outlook. The Relative Strength Index (RSI) stands near 65, trending upward but not yet in overbought territory, leaving room for further gains. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram is expanding after a recent bullish crossover, reinforcing the upside bias.Immediate resistance is seen at the upper boundary of the ascending channel and the 199.00 round figure, just below the December 30, 2024 swing high at 198.96. A clean break above this zone would mark a fresh yearly high and could pave the way for a run toward 200.00 and beyond. On the downside, initial support lies near 196.00 (channel midline), followed by the 50-day EMA. As long as the pair remains above these levels, the path of least resistance stays to the upside.
21:41 Fed proposes easing capitalization requirements despite internal opposition
The Federal Reserve (Fed) announced a proposal to lower leverage ratios for major banks on Wednesday, drawing some criticism from Fed policymakers who intend to oppose the rule changes if and when they take place.
The Federal Reserve (Fed) announced a proposal to lower leverage ratios for major banks on Wednesday, drawing some criticism from Fed policymakers who intend to oppose the rule changes if and when they take place.What are the eSLR requirements, and what do they do?The enhanced Supplementary Leverage Ratio (eSLR) was adopted in 2014 as part of Basel III regulation overhauls to increase global banking stability following the 2007-2008 global financial crisis. Under the eSLR, banks that are designated as a Global Systemically Important Bank (GSIB) must maintain a 5% capital reserve relative to its total leverage, which includes assets that are typically considered safe, such as US Treasury bonds.What are the proposed changes to the eSLR?If the Fed goes ahead with its plan to revamp eSLR requirements, GSIBs can expect an overall reduction in their eSLR requirements from a flat 2% buffer to a bounded target equal to one-half of that bank's method 1 surcharge, which is overall expected to reduce capital-leverage requirements by 1.4% for GSIBs, and by 27% for GSIB subsidiary institutions.What will the eSLR changes do?Under the proposed adjustments to GSIB leverage ratios, the eSLR changes are expected to free up additional capital for major investment banks to invest in Treasury bonds. Granting additional investment allocation to GSIBs could help to shore up stability for the US Treasury market in times of economic turmoil.Fed Board of Governors members Adriana Kugler and former Fed Vice Chair for Supervision Michael Barr are both expected to express dissent to the proposed changes in prepared statements.
21:37 Forex Today: Focus remains on US data and comments from central bankers
The Greenback remained on the back foot, surrendering initial gains and refocusing on the downside as market participants kept assessing the ceasefire in the Middle East as well as the cautious message from Chair Powell.
The Greenback remained on the back foot, surrendering initial gains and refocusing on the downside as market participants kept assessing the ceasefire in the Middle East as well as the cautious message from Chair Powell.Here's what to watch on Thursday, June 26: The US Dollar Index (DXY) clocked its third daily pullback in a row, returning to the area of multi-year lows near 97.70 amid a mixed performance of US yields across the board and further improvement in the sentiment around the risk complex. The final Q1 GDP Growth Rate is due, seconded by Durable Goods Orders, the Chicago PMI, Pending Home Sales, Wholesale Inventories, and the usual weekly Initial Jobless Claims. In addition, the Fed’s Barkin, Hammack and Barr are all due to speak.EUR/USD rose to fresh YTD highs above 1.1650 on the back of the U-turn in the US Dollar. Absent data releases on the domestic calendar, investors’ attention will be on the ECB’s De Guindos, Schnabel, and Lagarde.GBP/USD extended its advance to new 2025 peaks north of 1.3655 in response to extra losses in the Greenback. The CBI Distributive Trades is due alongside speeches by the BoE’s Bailey, and Breeden.Following two consecutive days of losses, USD/JPY regained some upside momentum and approached the 146.00 hurdle. The weekly Foreign Bond Investment figures will be the sole release on the Japanese calendar.AUD/USD move further up and reclaimed the 0.6500 barrier following extra downside pressure on the US Dollar. Next on tap in Oz will be the Housing Credit prints, and Private Sector Credit figures on June 30.WTI prices failed to regain some balance and receded slightly on Wednesday, keeping the trade near the $65.00 mark per barrel, down more than $12 since monthly peaks.Gold managed to chart humble gains around $3,330 per troy ounce following the decent decline in the Greebnback, alleviated geopolitical concerns and the cautious tone from the Fed. By the same tocken, Silver prices left behind Tuesday’s downtick and rose markedly past the $36.00 mark per ounce.
21:17 AUD/USD steadies as markets assess central bank policy and growth prospects
The Australian Dollar (AUD) is steadying against the US Dollar (USD), following a two-day rally that lifted AUD/USD back above 0.6500.
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AUD/USD hovers around 0.6500 as traders await the next fundamental drivers.The Australian Dollar (AUD) is steadying against the US Dollar (USD), following a two-day rally that lifted AUD/USD back above 0.6500.With risk-on sentiment returning to markets following Tuesday’s confirmation of a ceasefire between Israel and Iran, the Australian Dollar has benefited from easing geopolitical tensions.However, with prices now recovering above the 200-day Simple Moving Average (SMA), bullish momentum may be beginning to lose steam. As technical and fundamental factors contribute to driving price action, the relative performance of the two economies and interest rate expectations have returned to focus.Australia’s Monthly Consumer Price Index (CPI) data, released on Wednesday, revealed that price pressures continued to ease. While analysts had anticipated the annual inflation rate to rise by 2.3% in May, the actual figure printed at 2.1%.Australian monthly inflation data table for the period July 2024 - May 2025 - Source FXStreetThe softer inflation print raised expectations that the Reserve Bank of Australia (RBA) would announce another rate cut in July. Attention then shifted back to the United States, where markets awaited more comments from Federal Reserve (Fed) Chair Jerome Powell. As Powell testified before the US Senate Committee on Banking, Housing and Urban Affairs, he continued to express optimism about the US economy. His comments, from Tuesday and Wednesday, have done little to change the projected trajectory for interest rates, at least not for now. This leaves expectations for a Fed rate cut priced in for September, which has offered some support to the US Dollar and Treasury yields.Although diverging monetary policy should be lifting the US Dollar, the current economic uncertainty and weaker economic data are limiting its gains.AUD/USD hovers around 0.6500, with prices remaining within the confines of a rising wedgeFrom a technical standpoint, AUD/USD continues to trade within the confines of a rising wedge formation on the daily chart. Prices are currently testing an important zone of technical confluency around the key psychological level of 0.6500. Support is forming at the 10-day Simple Moving Average (SMA) at 0.6490, which aligns with the lower boundary of the rising wedge pattern. A clear break of the 0.6500 level could see bulls aiming for a retest of the 61.80% Fibonacci retracement level of the September-April decline near 0.6550.However, if bearish momentum builds, a move below the rising trendline support could see a deeper pullback to the mid-point of the above-mentioned move at 0.6428. Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
21:12 Gold steadies at $3,334 as Powell sticks to hawkish stance, US data weakens
Gold prices remain steady during the North American session on Wednesday, rising over 0.30% as risk appetite improves due to the de-escalation and truce of the Israel-Iran conflict. Worse-than-expected housing data in the United States (US) could lead to actions by the Federal Reserve (Fed).
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Worse-than-expected housing data in the United States (US) could lead to actions by the Federal Reserve (Fed). Still, Chair Jerome Powell maintains his hawkish rhetoric, which is capping bullion's gains.XAU/USD trades at $3,334, up 0.34% as the Greenback trims some of its earlier gains, while US equities trade with gains.Fed Chair Jerome Powell said during his testimony before US Congress that tariffs could cause just a one-time jump in prices, but added that the risks of becoming persistent are enough for the central bank to keep interest rates unchanged.“If it comes in quickly and it is over and done, then yes, very likely it is a one-time thing" that won't lead to more persistent inflation, Powell said. But "it is a risk we feel. As the people who are supposed to keep stable prices, we need to manage that risk. That's all we're doing.”Boston Fed President Susan Collins echoed Powell’s words, saying that policy is appropriate, but open to lower rate cuts later this year.Data-wise, US New Home Sales dipped in May, due to higher mortgage rates near 7%. Ahead in the week, traders will eye the release of Durable Goods Orders, Gross Domestic Product (GDP) figures, and Initial Jobless Claims prints.Daily digest market movers: Gold price holds firm amid weak US Dollar, rising US yieldsThe Gold price stabilized after falling below $3,300, following US President Donald Trump's announcement of the ceasefire agreement between Israel and Iran.The US 10-year Treasury note is yielding 4.31%, rising almost two basis points (bps). The US Dollar Index (DXY), which tracks the performance of the buck’s value against a basket of six peers, is also down 0.13% at 97.84.US New Home Sales dipped 13.7% in May, from 722,000 in April to 623,000. Analysts were expecting a decline to 693,000 units. Elevated 30-year mortgage rates, nearly 7%, are the cause of consumers refraining from buying new houses.Bullion is poised to extend its gains, but sudden mixed data in the US capped its advance. Worse-than-expected Consumer Confidence figures, but solid Flash PMIs, hint that the economy remains solid, albeit showing some signs of weakness. Next week, traders await the release of the Institute for Supply Management (ISM) figures for June.Money markets suggest that traders are pricing in 59 basis points of easing toward the end of the year, according to Prime Market Terminal data.Source: Prime Market TerminalXAU/USD technical outlook: Gold price plunges towards $3,300The Gold price is set to consolidate near the $3,300-$3,340 range for the remainder of the day, amid a lack of catalysts. The Relative Strength Index (RSI) is bearish, trending upward, and showing mixed readings, confirming the lateral trend.For Gold to resume its upward trend, buyers need to push prices above $3,350 and $3,450. Once surpassed, the next resistance would be $3,450, followed by $3,500. Conversely, if XAU/USD tumbles below the 50-day Simple Moving Average (SMA) at $3,317, $3,300 would be the first level of support. Next up is the May 29 low of $3,245 and $3,200. Gold FAQs Why do people invest in Gold? 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. Who buys the most Gold? 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. How is Gold correlated with other assets? 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. What does the price of Gold depend on? 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.
20:32 WTI snaps losing streak as US crude stockpiles fall
West Texas Intermediate (WTI) Crude Oil reverses course during the American session on Wednesday, snapping a two-day losing streak after spending much of the day drifting lower.
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The move came as traders digested easing geopolitical tensions between Iran-Israel and fresh EIA data showing a notable decline in US crude stockpiles.At the time of writing, WTI is trading near $65.20, recovering around 0.75% on the day. This comes after a brutal two-day slide of nearly 13%, which was the sharpest two-day decline since 2022.A major factor supporting the rebound in Oil prices is the larger-than-expected drawdown in US crude and fuel inventories. The latest data from the Energy Information Administration (EIA) showed a decline of 5.836 million barrels for the week ending June 21, far exceeding expectations for a modest 0.6 million-barrel drop. This marks the fifth straight weekly fall in stockpiles, reinforcing signs of tightening supply conditions amid steady summer demand.Geopolitical tensions, another dominant theme for Oil traders, took a backseat as a tentative ceasefire between Israel and Iran showed signs of holding after a rocky start. While early violations by both sides had raised doubts, global markets are cautiously embracing a “risk-on” mood, with equities firming and oil volatility easing.However, the ceasefire remains fragile. While US President Donald Trump claimed that recent US missile strikes had "totally obliterated" Iran’s nuclear facilities, intelligence report suggest the damage only delayed Tehran’s nuclear program by a few months. US President Donald Trump has since reiterated that Washington remains ready to act again should Tehran resume its nuclear ambitions.This complex geopolitical backdrop continues to influence market sentiment. While some of the geopolitical risk premium has been unwound, any renewed flare-up could rapidly shift momentum and reignite bullish pressure on Oil.After tumbling nearly 13% over the past two sessions, WTI Crude has found interim support at $64.50 – a key horizontal level that acted as resistance since mid April. The price is attempting to stabilize just above this zone, currently trading near $65.20.The Relative Strength Index (RSI) has slipped to 47, reflecting weakening momentum without yet signaling oversold conditions. Price is hovering near the middle Bollinger Band—the 20-day SMA at $66.60—which now acts as key resistance.A break below $64.50 could expose downside toward $62.00 and $60.00. On the flip side, reclaiming $66.60 would open the door to $68.00 and potentially $70.00. For now, WTI remains range-bound, with traders eyeing upcoming US GDP and PCE data for fresh direction. WTI Oil FAQs What is WTI Oil? WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media. What factors drive the price of WTI Oil? Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa. How does inventory data impact the price of WTI Oil The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency. How does OPEC influence the price of WTI Oil? OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
20:21 Dow Jones Industrial Average holds steady at the top end on Wednesday
The Dow Jones Industrial Average (DJIA) missed the bullish train on Wednesday, churning chart paper near the 43,000 major price handle as Dow traders ease into a lull after a tense start to the week.
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US President Donald Trump has turned his trade tariff focus onto Spain as he seeks to get ink to paper on any meaningful trade deals. Trump’s self-imposed deadline before reciprocal tariffs kick back in is fast approaching. The Trump administration has thus far struggled to eke out any trade deals that would represent the windfall to the US economy that he promised in the run-up to April’s “Liberation Day” reciprocal tariffs announcement, which were suspended for 90 days immediately after being announced.Spain gets latest tariff threatsPresident Trump announced during his far-ranging comments at the NATO 2025 summit in The Hague that Spain would “pay twice as much”, claiming that US delegates were actively negotiating with Spain. Trump also stated that he would negotiate with Spain directly and reiterated that “Spain is going to pay,” implying that the Trump administration is still working to find a way to make foreign countries pay the import taxes on goods that cross into the US.The Standard & Poor’s 500 (SP500) major equity index is within 1% of record highs, drawing investor focus as traders wait for meaningful developments in economic data or macro headline flows. Nvidia (NVDA), the de facto shovel-seller in the AI gold rush, is up over 3% on Wednesday and also within inches of all-time highs. Read more stock news: Nvidia stock nears all-time high after Loop Capital hikes price targetDow Jones price forecastThe Dow Jones Industrial Average tested its highest bids in three months this week, butr a near-term consolidation zone is keeping the major average pinned close to the 43,000 handle. The Dow has chalked in another bullish technical rejection of the 200-day Exponential Moving Average (EMA) near 41,800. However, top-side momentum could be due for a breather as technical oscillators test overbought territory.Dow Jones daily chart
Dow Jones FAQs What is the Dow Jones? The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500. What factors impact the Dow Jones Industrial Average? Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions. What is Dow Theory? Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits. How can I trade the DJIA? There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
Dow Jones FAQs What is the Dow Jones? The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500. What factors impact the Dow Jones Industrial Average? Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions. What is Dow Theory? Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits. How can I trade the DJIA? There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
20:04 United States 5-Year Note Auction declined to 3.879% from previous 4.071%
United States 5-Year Note Auction declined to 3.879% from previous 4.071%
19:22 EUR/JPY climbs as risk sentiment, policy divergence weigh on the Yen
The Euro (EUR) is strengthening against the Japanese Yen (JPY) in Wednesday’s trading session, with improved risk sentiment dampening demand for the safe-haven Yen.
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If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation. How do interest rates impact currencies? Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money. How do interest rates influence the price of Gold? Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank.
If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold. What is the Fed Funds rate? The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure.
Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.
19:13 US tariffs: Is EU retaliation inevitable? – Standard Chartered
A sliding scale of potential EU retaliation against US tariffs, depending on trade negotiation progress. Sectoral tariffs are likely to be the key determinant of how far the EU is willing to push its own tariffs.
A sliding scale of potential EU retaliation against US tariffs, depending on trade negotiation progress. Sectoral tariffs are likely to be the key determinant of how far the EU is willing to push its own tariffs. There's a growing risk of EU retaliation following the 9 July deadline, even if talks are extended. However, any EU retaliation is likely to be narrower, less severe and more targeted than US measures, Standard Chartered's economist Christopher Graham reports. EU may show some teeth"We recently noted that the contours of an EU-US trade deal were emerging, and that there was EU growing readiness to accept a minimum US baseline tariff without resorting to retaliation. However, US sectoral tariffs are likely to elicit a retaliatory response from the EU, particularly those already in place on autos (at 25%) and potentially yet to come on pharmaceuticals. If major concessions were offered to the EU on these fronts – as we have so far seen with the UK-US deal – then the EU may still opt not to retaliate, for fear of sparking an economically damaging tit-for-tat trade war; but this would be a difficult outcome for the EU to achieve, in our view. If instead substantial tariffs remain in place, we think some degree of EU tariff retaliation is likely.""We also think there is a growing risk that this retaliation could come soon after the 9 July deadline passes, potentially on 14 July when the current paused EU tariffs are set to take effect. Our base case remains that a framework deal or memorandum of understanding can be agreed by the 9 July deadline that allows for an extension of negotiations and US tariffs at their current rates. However, the EU will likely calculate that it needs to increase its economic leverage to ensure the best possible trade deal. This could include activating retaliatory measures already on the table to create a new benchmark from the EU side, despite some EU states being concerned that this could destabilise talks. At the very least, we are likely to see stronger threats of retaliation from the EU, including broadening the range of potential targets to include US services."
19:00 Russia Producer Price Index (YoY) fell from previous 2.7% to 0.3% in May
Russia Producer Price Index (YoY) fell from previous 2.7% to 0.3% in May
19:00 Russia Industrial Output above expectations (0.8%) in May: Actual (1.8%)
Russia Industrial Output above expectations (0.8%) in May: Actual (1.8%)
19:00 Russia Producer Price Index (MoM) increased to -1.3% in May from previous -1.4%
Russia Producer Price Index (MoM) increased to -1.3% in May from previous -1.4%
18:34 USD/JPY climbs as Yen slips on cautious BoJ, steady DXY
The Japanese Yen (JPY) weakens against the US Dollar (USD) on Wednesday, halting a two-day winning streak as the Greenback finds footing. A stabilizing US Dollar Index (DXY) and cautious sentiment following the Bank of Japan’s (BoJ) latest policy commentary weighed on the Yen.
.fxs-major-currency-prices-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-major-currency-prices-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-major-currency-prices-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:8px 16px}table.fxs-major-currency-prices-currency-prices-table{width:100%;text-align:center;border-collapse:collapse;font-size:1rem}table.fxs-major-currency-prices-currency-prices-table th{background-color:#f2f2f2}table.fxs-major-currency-prices-currency-prices-table td{color:#fff}table.fxs-major-currency-prices-currency-prices-table td.green{background-color:#9cd6cd}table.fxs-major-currency-prices-currency-prices-table td.red{background-color:#faafb5}table.fxs-major-currency-prices-currency-prices-table td.blue-grey{background-color:#888a93}.fxs-major-currency-prices-currency-prices-legend{font-size:11px;margin:8px;color:#49494f}@media (min-width:680px){.fxs-major-currency-prices-content{font-size:16px;line-height:21.6px}.fxs-major-currency-prices-title{font-size:19.2px;line-height:27.2px}}.fxs-major-currency-prices-currency-price td.dark-green{background-color:#39ad9a}.fxs-major-currency-prices-currency-price td.light-green{background-color:#9cd6cd}.fxs-major-currency-prices-currency-price td.gray{background-color:#888a93}.fxs-major-currency-prices-currency-price td.light-red{background-color:#faafb5}.fxs-major-currency-prices-currency-price td.strong-red{background-color:#f55e6a}Japanese Yen weakens as USD/JPY rebounds from 21-day EMA support near 144.60.The BoJ’s Summary of Opinions reveals division on rate outlook.Board member Tamura says inflation could reach the target sooner, calls for timely hikes.The Japanese Yen (JPY) weakens against the US Dollar (USD) on Wednesday, halting a two-day winning streak as the Greenback finds footing. A stabilizing US Dollar Index (DXY) and cautious sentiment following the Bank of Japan’s (BoJ) latest policy commentary weighed on the Yen.The USD/JPY pair is recovering steadily, currently trading near 145.75 in the American hours and up 0.45% on Wednesday. The pair found a solid floor around 144.61 earlier in the session, coinciding with support from the 21-day Exponential Moving Average (EMA), which helped fuel the latest rebound.Meanwhile, the US Dollar Index (DXY), which measures the Greenback’s performance against a basket of six major currencies, is hovering near the 98.00 mark on Wednesday, stabilizing after testing three-year lows the previous day. The pause in downside momentum comes as investors continue to evaluate the Federal Reserve’s (Fed) policy outlook, with Fed Chair Jerome Powell appearing before the Senate for a second day of Congressional testimony and maintaining a cautious stance on rate adjustments.On the Japanese front, the Bank of Japan’s Summary of Opinions from its June monetary policy meeting, released earlier in the day, highlighted a growing rift among board members over the timing and scale of future rate hikes. While a few policymakers argued for maintaining the current policy stance amid external uncertainties and sluggish domestic growth, others flagged persistent inflationary pressure and strong wage gains as reasons to consider additional tightening. The mixed signals have kept markets guessing, with no clear indication on when the BoJ might move next.Policymakers emphasized that any rate hikes would hinge on the materialization of their economic and price outlook. While inflation has slightly exceeded expectations, the BoJ noted that economic growth is likely to slow, and consumer price improvements may remain sluggish. Amid external risks such as global trade tensions and geopolitical instability, the board broadly agreed that maintaining the current accommodative stance remains appropriate for now, adding to the downward pressure on the Yen.Adding to the mix, BoJ board member Naoki Tamura offered a more hawkish perspective, suggesting the central bank should consider raising interest rates without delay. Speaking in Fukushima, Tamura said there is a “good possibility” that the BoJ’s 2% inflation target could be met earlier than anticipated. He underscored the need for timely and appropriate policy action based on data trends and warned that inflation could rise faster than current forecasts, potentially requiring decisive tightening, even amid global uncertainties.Looking ahead, market focus will remain on Federal Reserve (Fed) Chair Jerome Powell’s testimony for further policy clues. Attention will then shift to the second estimate of US Q1 GDP, due on Thursday, followed by key inflation readings on Friday, including the Tokyo Consumer Price Index (CPI) and the Fed’s preferred inflation gauge — Core PCE. These data points could provide fresh direction for USD/JPY amid lingering policy divergence between the Fed and the BoJ. Japanese Yen PRICE Today The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Canadian Dollar. USD EUR GBP JPY CAD AUD NZD CHF USD -0.15% -0.04% 0.47% 0.25% -0.00% -0.25% 0.01% EUR 0.15% 0.12% 0.64% 0.37% 0.11% -0.11% 0.16% GBP 0.04% -0.12% 0.50% 0.26% 0.02% -0.23% 0.07% JPY -0.47% -0.64% -0.50% -0.29% -0.46% -0.69% -0.43% CAD -0.25% -0.37% -0.26% 0.29% -0.18% -0.36% -0.19% AUD 0.00% -0.11% -0.02% 0.46% 0.18% -0.30% 0.05% NZD 0.25% 0.11% 0.23% 0.69% 0.36% 0.30% 0.30% CHF -0.01% -0.16% -0.07% 0.43% 0.19% -0.05% -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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
18:31 GBP/USD holds above 1.3600 as ceasefire lifts mood, BoE turns dovish
The Pound Sterling extends its gains to three straight days during the week, amid an upbeat market mood triggered by the ceasefire of the Israel-Iran conflict. Nevertheless, the truce remains fragile after both parties exchanged blows close to or after the deadline proposed by Washington.
.fxs-major-currency-prices-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-major-currency-prices-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-major-currency-prices-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:8px 16px}table.fxs-major-currency-prices-currency-prices-table{width:100%;text-align:center;border-collapse:collapse;font-size:1rem}table.fxs-major-currency-prices-currency-prices-table th{background-color:#f2f2f2}table.fxs-major-currency-prices-currency-prices-table td{color:#fff}table.fxs-major-currency-prices-currency-prices-table td.green{background-color:#9cd6cd}table.fxs-major-currency-prices-currency-prices-table td.red{background-color:#faafb5}table.fxs-major-currency-prices-currency-prices-table td.blue-grey{background-color:#888a93}.fxs-major-currency-prices-currency-prices-legend{font-size:11px;margin:8px;color:#49494f}@media (min-width:680px){.fxs-major-currency-prices-content{font-size:16px;line-height:21.6px}.fxs-major-currency-prices-title{font-size:19.2px;line-height:27.2px}}.fxs-major-currency-prices-currency-price td.dark-green{background-color:#39ad9a}.fxs-major-currency-prices-currency-price td.light-green{background-color:#9cd6cd}.fxs-major-currency-prices-currency-price td.gray{background-color:#888a93}.fxs-major-currency-prices-currency-price td.light-red{background-color:#faafb5}.fxs-major-currency-prices-currency-price td.strong-red{background-color:#f55e6a}GBP/USD rises 0.05% above 1.3600 as market mood brightens on Middle East ceasefire.BoE’s Bailey signals possible rate cuts ahead amid soft labor data, capping Sterling gains.Powell and Fed’s Collins maintain wait-and-see stance; weak US new home sales deepen rate-cut speculation.The Pound Sterling extends its gains to three straight days during the week, amid an upbeat market mood triggered by the ceasefire of the Israel-Iran conflict. Nevertheless, the truce remains fragile after both parties exchanged blows close to or after the deadline proposed by Washington. The GBP/USD trades above 1.3600 after falling below it earlier, up 0.05%.Sterling extends 3-day rally amid fragile Israel–Iran truce and dovish BoE signals, while Powell maintains cautious toneToday is the second and latest appearance of Fed Chair Jerome Powell's semi-annual testimony at the US Congress. He is expected to deliver the same message, of a wait-and-see mode at the central bank, as they assess the possible impact of tariffs on inflation. He stated that tariffs one-impact on inflation, but he wants to approach it carefully when inflation is not back at 2%.Earlier, Boston Fed Susan Collins echoed yesterday's words, saying that monetary policy is well-positioned, that the US economy is solid, and that there’s time for patience.Data-wise, US New Home Sales dipped in May, -13.7% from 722,000 in April to 623,000. Analysts were expecting a decline to 693,000 units. Elevated 30-year mortgage rates, nearly 7% are the cause of consumers refraining from buying new houses.In the UK, a dovish tilt by Bank of England (BoE) Governor Andrew Bailey, capped the GBP/USD advance as he stated that rates could move lower, tough cautiously due to a softening jobs market.During the week, the UK economic docket will feature BoE speakers and the release of growth figures. In the US, Durable Goods Orders, Fed speeches, GDP, and inflation data could set the tone for the GBP/USD pair.GBP/USD Price Forecast: Technical OutlookThe GBP/USD reached a new yearly high at 1.3641, potentially opening the door for further upside. However, it is worth noting that a daily close below 1.3600 could sponsor a pullback. Nevertheless, the Relative Strength Index (RSI) suggests the pair might consolidate after turning flat.GBP/USD upside resistance lies at 1.3644/50, followed by 1.3700. A breach of the latter will expose 1.3750. Conversely, if the pair tumbles below 1.3600, look for sellers testing the 20-day Simple Moving Average (SMA) at 1.3524. If surpassed, the next stop would be the 50-day SMA at 1.3415. British Pound PRICE This week The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the US Dollar. USD EUR GBP JPY CAD AUD NZD CHF USD -1.43% -1.59% -0.76% -0.06% -0.98% -1.20% -1.42% EUR 1.43% -0.20% 0.75% 1.39% 0.41% 0.24% -0.02% GBP 1.59% 0.20% 0.97% 1.59% 0.60% 0.43% 0.17% JPY 0.76% -0.75% -0.97% 0.67% -0.26% -0.40% -0.76% CAD 0.06% -1.39% -1.59% -0.67% -0.87% -1.13% -1.39% AUD 0.98% -0.41% -0.60% 0.26% 0.87% -0.19% -0.44% NZD 1.20% -0.24% -0.43% 0.40% 1.13% 0.19% -0.26% CHF 1.42% 0.02% -0.17% 0.76% 1.39% 0.44% 0.26% 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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
17:41 Powell speech: Federal debt doesn't affect our month-to-month policy decisions
"Federal financial policy, debt, doesn't affect our month-to-month policy decisions," Federal Reserve (Fed) Chairman Jerome Powell said while testifying about the Semi-Annual Monetary Policy Report before the Senate Banking Committee on Wednesday.
"Federal financial policy, debt, doesn't affect our month-to-month policy decisions," Federal Reserve (Fed) Chairman Jerome Powell said while testifying about the Semi-Annual Monetary Policy Report before the Senate Banking Committee on Wednesday.Key takeaways"Ample reserves enable banks to keep lending through stress.""Return to scarce reserves would not save money.""Unwinding ample reserves would take years.""Enormous benefits of having the Dollar as the global reserve currency.""Dollar remains reserve currency, it's a durable equilibrium, expect it to last for a long time to come.""Bond market is functioning well.""Inflation expectations have come down a bit from April.""On USD weakness, markets have been digesting an unusually challenging set of circumstance."Market reactionThese comments don't seem to be having a noticeable impact on the US Dollar's (USD) valuation. At the time of press, the USD Index was virtually unchanged on the day at 98.00.
17:30 United States EIA Crude Oil Stocks Change registered at -5.836M, below expectations (-0.6M) in June 20
United States EIA Crude Oil Stocks Change registered at -5.836M, below expectations (-0.6M) in June 20
17:00 United States New Home Sales (MoM) below forecasts (0.69M) in May: Actual (0.623M)
United States New Home Sales (MoM) below forecasts (0.69M) in May: Actual (0.623M)
16:52 Fed's Collins: Monetary policy well-positioned, time for patience and care
Federal Reserve Bank of Boston President Susan Collins said on Wednesday that the US economy is solid overall and added that the monetary policy is well-positioned, per Reuters.
Federal Reserve Bank of Boston President Susan Collins said on Wednesday that the US economy is solid overall and added that the monetary policy is well-positioned, per Reuters.Key takeaways"Time for patience and care.""Supported Fed's decision to hold steady on rates last week.""Tariffs likely to push up inflation, lower growth and hiring.""Expecting to see more tariff impact over coming months.""Expecting it to be appropriate to lower rates later this year but much depends on tariffs."Market reactionThese comments failed to trigger a noticeable market reaction. At the time of press, the US Dollar (USD) Index was up 0.15% on the day at 98.12.These comments from Collins received a neutral score of 5.4 from FXStreet Fed Speech Tracker.
16:48 USD/CAD edges higher ahead of Fed Powell's remarks
The Canadian Dollar (CAD) is softening against the US Dollar (USD) on Wednesday as the currency pair attempts to break free from a consolidation phase.
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The Loonie pair remains vulnerable to risk sentiment and developments from the United States, which could provide further insight into interest rate expectations.The Canadian Dollar (CAD) is softening against the US Dollar (USD) on Wednesday as the currency pair attempts to break free from a consolidation phase.With USD/CAD trading near 1.3750 at the time of writing, the release of US New Home Sales data for May and Federal Reserve (Fed) Jerome Powell’s testimony are in focus.The US Census Bureau will release its latest figures on New Home Sales at 14:00 GMT, which reflect the number of single-family homes sold, regardless of their stage in the construction process. Expectations are for 690,000 units were sold in May, with market participants also paying attention to the monthly percentage change.With New Home Sales in April rising sharply by 743,000 ahead of the implementation of tariffs, the May report may provide a clearer picture of how the construction and housing industry is performing under current conditions. At the same time, Fed Chair Jerome Powell will testify before the US Senate Committee on Banking, Housing, and Urban Affairs. This is the second and final day of the semiannual Monetary Report hearing, where Powell will continue to be questioned on inflation, interest rates, and the overall health of the US economy. This hearing is particularly important, as it may provide valuable insights into the Federal Reserve’s future plans for interest rates. Investors will carefully analyze Powell’s remarks for any signals about inflation trends, economic growth, and how the Fed may adjust interest rates in the coming months.USD/CAD technical analysisThe USD/CAD pair is currently consolidating around the 1.3740 level, slightly above the key 78.6% Fibonacci retracement of the September-February rise at 1.3713. Recent price action indicates a breakout from a descending wedge pattern, suggesting a potential shift in momentum. However, the pair is facing strong resistance near the 50-day Simple Moving Average (SMA) at 1.3795 and the November 2024 low at 1.3823. These levels will be critical in determining whether the pair can sustain a bullish reversal. Meanwhile, the Relative Strength Index (RSI) sits near 50 on the daily chart, indicating neutral momentum and a lack of clear direction. A decisive move above the resistance zone could open the path toward the April high at 1.4415, while a failure to hold current support at the key 78.6% Fibonacci retracement might lead the pair back toward the June 16 low at 1.3539 or even the September low at 1.3419. 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.
16:04 Silver Price Forecast: XAG/USD tests rising channel support, momentum indicators flash caution
Silver (XAG/USD) is showing muted price action on Wednesday, slipping modestly lower but staying within Tuesday’s range. At the time of writing, the metal is trading around $35.75 during the American session, down roughly 0.46% on the day.
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At the time of writing, the metal is trading around $35.75 during the American session, down roughly 0.46% on the day. The subdued movement reflects fading safe-haven demand, as signs of easing geopolitical tensions — particularly the truce between Iran and Israel — have cooled the recent risk premium that helped drive Silver to multi-year highs.Silver is showing early signs of technical fatigue after a strong multi-week uptrend that saw the metal climb from sub-$30 levels to 13-year highs near $37.00. One of the key red flags came from a bearish divergence between price action and the Relative Strength Index (RSI). While spot Silver pushed to fresh multi-year highs last week, the RSI peaked earlier and has since trended lower. With RSI now easing toward 56, the bullish momentum appears to be moderating, inviting cautious profit-taking from short-term tradersToday’s price action sees XAG/USD trading near $35.75, modestly lower on the day, as it currently tests the lower boundary of a well-defined ascending channel. This structure has underpinned bullish momentum since mid-April. This support zone aligns closely with the middle Bollinger Band (20-day SMA), currently around $35.71. A decisive daily close below this confluence area could be the first concrete signal that bulls are losing grip.The Bollinger Bands have started to contract after widening sharply during Silver’s rally. Such narrowing typically precedes a significant directional move. If the lower channel support around $35.60–$35.70 gives way, it could open the door toward deeper retracements near $34.00.Volatility, as captured by the Average True Range (ATR 14), has also tapered off to 0.78, suggesting that the explosive moves of early June are giving way to more measured price action. This could mean that the market is entering a consolidation phase or preparing for a breakout reversal.That said, the broader trend remains bullish unless a confirmed breakdown occurs. Traders will be watching whether bulls can defend this technical inflection zone and bounce back toward $37.00, or if the weight of profit-taking and reduced safe-haven flows forces a steeper correction. Silver FAQs Why do people invest in Silver? Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets. Which factors influence Silver prices? Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices. How does industrial demand affect Silver prices? Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices. How do Silver prices react to Gold’s moves? Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
15:23 USD/INR firms near 86.00 as US Dollar stabilizes
The Indian Rupee (INR) weakens against the US Dollar (USD) during European trading hours on Wednesday, surrendering early gains as the Greenback steadies.
.fxs-major-currency-prices-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-major-currency-prices-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-major-currency-prices-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:8px 16px}table.fxs-major-currency-prices-currency-prices-table{width:100%;text-align:center;border-collapse:collapse;font-size:1rem}table.fxs-major-currency-prices-currency-prices-table th{background-color:#f2f2f2}table.fxs-major-currency-prices-currency-prices-table td{color:#fff}table.fxs-major-currency-prices-currency-prices-table td.green{background-color:#9cd6cd}table.fxs-major-currency-prices-currency-prices-table td.red{background-color:#faafb5}table.fxs-major-currency-prices-currency-prices-table td.blue-grey{background-color:#888a93}.fxs-major-currency-prices-currency-prices-legend{font-size:11px;margin:8px;color:#49494f}@media (min-width:680px){.fxs-major-currency-prices-content{font-size:16px;line-height:21.6px}.fxs-major-currency-prices-title{font-size:19.2px;line-height:27.2px}}.fxs-major-currency-prices-currency-price td.dark-green{background-color:#39ad9a}.fxs-major-currency-prices-currency-price td.light-green{background-color:#9cd6cd}.fxs-major-currency-prices-currency-price td.gray{background-color:#888a93}.fxs-major-currency-prices-currency-price td.light-red{background-color:#faafb5}.fxs-major-currency-prices-currency-price td.strong-red{background-color:#f55e6a}USD/INR steadies near 86.00, snapping a three-day losing streak after rebounding from 21-day EMA support near 85.80.The Indian Rupee weakens despite easing geopolitical tensions, as importer demand for the US Dollar and cautious risk sentiment cap gains.Fed Chair Powell maintains cautious tone, signaling not rushing to cut rates, focus shifts to Senate testimony on Wednesday.The Indian Rupee (INR) weakens against the US Dollar (USD) during European trading hours on Wednesday, surrendering early gains as the Greenback steadies. The Rupee opened on a firm note amid favorable risk sentiment but eased lower through the session as the US Dollar Index (DXY) held its ground near the previous week's low. Meanwhile, Crude Oil prices remain stable after a sharp two-day sell-off, offering limited support to the Rupee.The USD/INR is showing a mild recovery, halting a three-day losing streak as it rebounds from an intraday low near 85.80. The pair found support at the 21-day Exponential Moving Average (EMA) and is trading around 86.02 at the time of writing, following a shallow intraday bounce.Geopolitical tensions in the Middle East have eased following a ceasefire agreement between Iran and Israel, bringing some relief to global markets. Oil prices have stabilized after a sharp two-day sell-off, and safe-haven demand has cooled, supporting broader risk sentiment. While the Rupee has moderately benefited from the de-escalation, its response remains subdued. The INR still faces pressure from steady demand for the US Dollar — particularly from oil companies — and remains sensitive to shifts in global risk appetite.Market Movers: Rupee volatility persists; RBI acts on liquidity, Powell holds lineThe Indian Rupee posted its strongest daily gain in a month on Tuesday, though volatility persists with USD/INR swinging between ₹85.80 and ₹86.89 over the past week. The average exchange rate for June so far stands at approximately ₹86.00, aligning with the year-to-date average of around ₹86.10.The Reserve Bank of India’s (RBI) presence in the currency market has helped anchor the Rupee, with the central bank reportedly intervening through US Dollar sales at key levels to curb sharp depreciation. Market participants expect the RBI to maintain its calibrated approach, managing volatility while safeguarding foreign exchange reservesRBI signals liquidity shift, announcing plans on Tuesday to withdraw excess short-term cash from the banking system. The move marks a change in stance after months of liquidity infusions that had eased borrowing costs, potentially impacting short-term Rupee dynamics.The Reserve Bank of India aims to take out Rs 1 trillion ($11.6 billion) from the banking system via a seven-day variable rate reverse repurchase auction on June 27. This reverse repo operation, the first since November, is designed to align overnight call rates closer to the repo rate and may inject upward pressure into short-term money market rates.In the domestic equity market, the benchmark Sensex jumped 700.40 points to close at 82,755.51, while the Nifty surged 200.40 points to end at 25,244.75, buoyed by improved risk sentiment and easing geopolitical tensions.Crude Oil steadies after sharp drop, with Brent hovering near $66.60 and WTI around $64.30 on Wednesday. Prices have stabilized following a steep decline earlier in the week, as easing geopolitical tensions between Iran and Israel reduced fears of supply disruptions.Testifying before Congress on Tuesday, Federal Reserve (Fed) Chair Jerome Powell reinforced the Fed’s patient approach, signaling that a rate cut in July is unlikely. He emphasized the need for greater clarity on inflation trends and potential impacts from higher tariffs before implementing any policy shift. Powell’s remarks suggest that the Fed remains data-dependent, and rate cuts could be delayed until September or beyond. This cautious tone prompted a shift in market expectations, with traders dialing back bets on near-term easing.Following his appearance before the House on Tuesday, Fed Chair Jerome Powell is scheduled to face the Senate Banking Committee at 10:00 am EST on Wednesday for his semi‑annual monetary policy report.The US Dollar Index (DXY) remains firm around the 98.00 level on Wednesday, with traders staying cautious ahead of Fed Chair Powell’s second day of testimony. With a relatively quiet US economic calendar, attention turns to May’s New Home Sales data due later in the day.USD/INR technical outlook: Retest in play, pair to trade in short-term rangeUSD/INR is currently trading around 86.03, retesting the breakout zone after slipping from recent highs. The pair found support near the 21-day EMA at 85.91, which aligns closely with the upper boundary of the symmetrical triangle pattern. The pair recently broke out of a symmetrical triangle but faced resistance below the 87.00 psychological mark, triggering a pullback.The Relative Strength Index (RSI) on the daily chart is easing, hovering above neutral at 53.02, which indicates a loss of bullish momentum and suggests potential range-bound trading between 85.80 and 86.90 in the near term. A decisive break on either side of this range will likely dictate the next directional bias. Indian Rupee PRICE Today The table below shows the percentage change of Indian Rupee (INR) against listed major currencies today. Indian Rupee was the strongest against the Japanese Yen. USD EUR GBP JPY CAD AUD NZD INR USD 0.08% 0.10% 0.57% 0.13% -0.08% -0.24% 0.15% EUR -0.08% 0.04% 0.47% 0.02% -0.20% -0.33% 0.02% GBP -0.10% -0.04% 0.46% 0.00% -0.21% -0.37% 0.06% JPY -0.57% -0.47% -0.46% -0.49% -0.63% -0.77% -0.45% CAD -0.13% -0.02% -0.01% 0.49% -0.14% -0.24% -0.01% AUD 0.08% 0.20% 0.21% 0.63% 0.14% -0.21% 0.12% NZD 0.24% 0.33% 0.37% 0.77% 0.24% 0.21% 0.34% INR -0.15% -0.02% -0.06% 0.45% 0.00% -0.12% -0.34% 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 Indian Rupee from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent INR (base)/USD (quote).
15:03 Gold holds steady as risk sentiment improves, Fed’s Powell back in focus
Gold (XAU/USD) is trading within a tight range on Wednesday, as markets continue to show signs of optimism following Tuesday's ceasefire between Israel and Iran.
.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}Gold remains steady as markets await the release of US New Home Sales data for additional clues of the health of the United States economy.Fed Chair Powell is expected to testify before the Senate Banking Committee, providing additional insight into monetary policy, inflation, and interest rates, factors that could serve as an additional catalyst for Bullion.XAU/USD steadies above $3,300 after a three-day losing streak, with risk appetite limiting short-term gains.Gold (XAU/USD) is trading within a tight range on Wednesday, as markets continue to show signs of optimism following Tuesday's ceasefire between Israel and Iran.At the time of writing, Gold is holding above $3,300 during the European session, with volatility remaining subdued. Market focus is now on key US macroeconomic releases and the second day of testimony from Federal Reserve Chair Jerome Powell. With tensions in the Middle East appearing to remain subdued, Wednesday’s economic data releases and comments from Powell could serve as an additional catalyst for Bullion.US New Home Sales data for May, due at 14:00 GMT, could serve as an additional catalyst for the Gold price. This report provides clues into how strongly the US housing market appears to be holding up. Meanwhile, Jerome Powell returns to Capitol Hill to speak before the US Senate Committee on Banking, Housing, and Urban Affairs, where any shift in tone or mention of inflation risks could drive interest rate-sensitive assets, including Gold.Daily digest market movers: Gold price drivers, Fed expectations, risks aheadFederal Reserve Chair Powell continues his two-day testimony to Congress on Wednesday, following his appearance before Congress the previous day, during which he answered questions on the economy, inflation, and the potential timing of rate cuts. For Gold, which moves inversely to interest rates and the US Dollar, Powell’s comments are particularly influential. Powell reiterated that the Fed is in "no hurry to cut rates," noting that inflation data has been uneven and that tariff-related price pressures are likely to appear in the data for June or July. Powell’s tone remained consistent with the June 18 Federal Open Market Committee (FOMC) meeting, where policymakers projected two rate cuts in the latter part of the year. Despite that, market participants remain divided on the timing and certainty of those cuts, with pricing still sensitive to incoming data. Powell also added, “If it turns out that inflation pressures do remain contained, we will get to a place where we cut rates sooner rather than later, but I wouldn’t want to point to a particular meeting.” He clarified that a meaningful deterioration in the labor market would also affect the Fed’s decision-making, but emphasized, “We don’t need to be in any rush because the economy is still strong, the labor market is strong.” This underscores the data-dependent stance, keeping Gold sensitive to incoming figures. US consumer confidence data released Tuesday added to that uncertainty. The Conference Board’s Consumer Confidence index fell to 93.0 in June, down from 98.4 in May. A more cautious consumer outlook could imply softer spending ahead, which may weigh on the Fed’s growth projections and influence the timing of interest rate adjustmentsGeopolitical risk has abated for now, with the Israel-Iran ceasefire holding for a second consecutive day. While the situation remains fragile, the lack of new escalations has drawn safe-haven flows away from Gold, placing more emphasis on macroeconomic and policy factors for direction. Looking ahead, the release of US Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge, on Friday will be critical. A soft print could revive expectations for a near-term rate cut and offer a fresh tailwind for Gold.Gold technical analysis: XAU/USD clings to the 50-day SMA above $3,300Gold price is currently trading above the key psychological support level of $3,300, with the Relative Strength Index (RSI) indicator flattening near the 50 mark on the daily chart, suggesting a lack of momentum and indecision among traders.At the time of writing, XAU/USD has steadied around the 50-day Simple Moving Average (SMA) at $3,325.Gold (XAU/USD) daily chartFor the price to extend its recovery, a move above the 20-day SMA at $3,355 is required. If bulls succeed in clearing this barrier, the next level of resistance will likely reside at the $3,400 psychological level.However, if risk appetite improves, demand for safe havens could continue to decline in the short term. If the Gold price faces a deeper pullback below the $3,300 round level, the midpoint of the rally from the April 7 low to the April 22 high (the 50% Fibonacci retracement level) could come into play as support at $3,228. Gold FAQs Why do people invest in Gold? 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. Who buys the most Gold? 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. How is Gold correlated with other assets? 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. What does the price of Gold depend on? 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.
14:35 EUR/GBP flattens above 0.8500 while BoE’s Bailey warns of UK labor market risks
The EUR/GBP pair trades flat around 0.8525 during European trading hours on Wednesday. The cross flattens as market experts reassess their expectations for the Bank of England’s (BoE) monetary outlook for the remainder of the year amid growing concerns over United Kingdom’s (UK) job market.
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Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE). How do the decisions of the Bank of England impact on the Pound Sterling? The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates.
When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money.
When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects. How does economic data influence the value of the Pound? Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP.
A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall. How does the Trade Balance impact the Pound? Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
14:33 JPY soft as hawkish BoJ comms highlight importance of trade talks – Scotiabank
The Japanese Yen (JPY) is weak, down 0.5% against the US Dollar (USD) and underperforming all of the G10 currencies in relatively quiet trade overall, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
The Japanese Yen (JPY) is weak, down 0.5% against the US Dollar (USD) and underperforming all of the G10 currencies in relatively quiet trade overall, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report. BoJ highlights importance of trade talks "The yen’s weakness is being attributed to a speech from BoJ board member Tamura, where the policymaker’s hawkish tone was tempered by a suggestion that the central bank would be unlikely to raise rates while trade talks were underway." "The speech followed a relatively hawkish BoJ Summary of Opinions (minutes) release that hinted to the possibility to an inflation forecast upgrade and potential rate hike in July – depending on the outcome of trade talks with the US."
14:31 WTI Oil remains depressed below $65.00 on easing supply concerns
Crude Oil is consolidating losses on Wednesday, after having depreciated more than $10 from Monday’s highs.
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Crude Oil is consolidating losses on Wednesday, after having depreciated more than $10 from Monday’s highs. The ceasefire in the Middle East has eased concerns about an Oil supply disruption, which keeps the price of the barrel for the US benchmark WTI capped below the $65.00 level.
The Truce between Israel and Iran seems fragile, but is holding for the second day. Iran’s Oil supply capacity does not seem to have been affected by Israel’s bombings, and the threat of a blockade of the key Strait of Hormuz gateway has been pushed away for now. All these circumstances have contributed to bringing prices back to pre-war levels.Market concerns about weak Oil demand remain aliveApart from that, concerns about demand remain alive. The US economy keeps showing signs of slowdown. Consumer confidence deteriorated in June, according to data released on Tuesday, which confirmed the grim picture anticipated by previous macroeconomic releases.
The Eurozone is stagnating, and China’s recovery seems elusive. In this context, the OPEC+ countries’ plans to keep hiking supply might lead to an Oil glut.Also on Tuesday, Fed Chairman Jerome Powell refused to signal any rate cut in the near term as he said, upside risks on inflation stemming from Trump’s tariffs remain high. The restrictive Fed policy is weighing on economic activity and demand for Oil, adding negative pressure on prices. WTI Oil FAQs What is WTI Oil? WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media. What factors drive the price of WTI Oil? Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa. How does inventory data impact the price of WTI Oil The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency. How does OPEC influence the price of WTI Oil? OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia. in
Crude Oil is consolidating losses on Wednesday, after having depreciated more than $10 from Monday’s highs. The ceasefire in the Middle East has eased concerns about an Oil supply disruption, which keeps the price of the barrel for the US benchmark WTI capped below the $65.00 level.
The Truce between Israel and Iran seems fragile, but is holding for the second day. Iran’s Oil supply capacity does not seem to have been affected by Israel’s bombings, and the threat of a blockade of the key Strait of Hormuz gateway has been pushed away for now. All these circumstances have contributed to bringing prices back to pre-war levels.Market concerns about weak Oil demand remain aliveApart from that, concerns about demand remain alive. The US economy keeps showing signs of slowdown. Consumer confidence deteriorated in June, according to data released on Tuesday, which confirmed the grim picture anticipated by previous macroeconomic releases.
The Eurozone is stagnating, and China’s recovery seems elusive. In this context, the OPEC+ countries’ plans to keep hiking supply might lead to an Oil glut.Also on Tuesday, Fed Chairman Jerome Powell refused to signal any rate cut in the near term as he said, upside risks on inflation stemming from Trump’s tariffs remain high. The restrictive Fed policy is weighing on economic activity and demand for Oil, adding negative pressure on prices. WTI Oil FAQs What is WTI Oil? WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media. What factors drive the price of WTI Oil? Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa. How does inventory data impact the price of WTI Oil The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency. How does OPEC influence the price of WTI Oil? OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia. in
14:29 GBP trading in a tight range around 1.36 – Scotiabank
Pound Sterling (GBP) is entering Wednesday’s NA session unchanged vs. the US Dollar (USD), consolidating in a tight range around 1.36 and trading just below Tuesday’s multiyear high that reached levels last seen in January 2022, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report
Pound Sterling (GBP) is entering Wednesday’s NA session unchanged vs. the US Dollar (USD), consolidating in a tight range around 1.36 and trading just below Tuesday’s multiyear high that reached levels last seen in January 2022, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report. GBP is at levels last seen in January 2022"As with the EUR, much of the GBP’s recent gains have been driven by fundamentals and specifically a shift in the outlook for relative central bank policy, with UK-US yield spread moving about 15bpts in the GBP’s favor over the past couple of weeks." "This week’s domestic calendar remains limited to second and third-tier sentiment releases and will leave the pound vulnerable to US data and the broader market’s tone. In terms of sentiment, GBP/USD risk reversals continue to price a slight risk premium for puts over calls, owing to recent tensions in the middle east, and an unwind of this offers another source of near-term upside for the pound." "The trend is bullish, with a clear sequence of higher lows and higher highs since January. The latest gains have pushed the pound to levels last seen in January 2022, and the recovery in the RSI hints to renewed momentum as it confirms the trend. We see no major resistance ahead of 1.3750."
14:27 EUR consolidates around 1.16 – Scotiabank
The Euro (EUR) is quietly consolidating in a tight range around 1.16, trading just below Tuesday’s fresh multi-year high that reached levels last seen in September 2021.
The Euro (EUR) is quietly consolidating in a tight range around 1.16, trading just below Tuesday’s fresh multi-year high that reached levels last seen in September 2021. The EUR’s gains have been fundamentally driven, resulting from an ongoing shift in the outlook for relative central bank policy and a continued build in easing expectations at the Fed. EUR is just below Tuesday’s multi-year high, supported by yield spreads"The 2Y Germany-US spread has narrowed about 15bpts over the past week, providing the EUR with a fundamental support that had been lacking since the eruption of trade tensions in early April. Wednesday’s release calendar has been limited to France’s consumer confidence figures, which remained unchanged.""The euro area will release consumer confidence figures on Friday and Germany will release its GfK (consumer) confidence figures Thursday. The trend is bullish, with a clear sequence of higher lows and higher highs since early February. Tuesday’s high pushed to the mid1.16s, reaching levels last seen in September 2021." "Momentum is bullish and confirming the trend, and an RSI in the mid-60s leaves ample room for further nearterm upside ahead of the overbought threshold at 70. In terms of support, we continue to highlight the importance of the 50 day MA (1.1377). Closer support is expected in the 1.1550-1.1520 area. We see limited major resistance ahead of the 1.1720-1.1750 area."
14:25 CAD little changed on the day – Scotiabank
The Canadian Dollar (CAD) is little changed on the session. In line with expectations CPI data, reflecting a marginal easing in core pressures, does no move the needle for the BoC policy outlook in the short run, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
The Canadian Dollar (CAD) is little changed on the session. In line with expectations CPI data, reflecting a marginal easing in core pressures, does no move the needle for the BoC policy outlook in the short run, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report. USD/CAD holds neutral range in low 1.37s"The rebound in core price trends since the turn of the year remains intact and there is more than enough uncertainty around the outlook to keep the Bank on hold for now. Swaps reflect little change in easing expectations, with around 8bps of cuts priced in for the end of July. Spot continues to trade above our estimated fair value (1.3649 today) but the deviation is narrowing as global risk sentiment settles." "Spot’s (technically bearish) rejection of the 1.38 area at the start of the week has been offset to some extent by the rebound yesterday’s test of support in the upper 1.36s. Spot may continue to pivot around the low/mid 1.37s in the short run but the early week failure just under 1.38 remains the salient feature of the short-term chart because the turn lower came in time to prevent a positive change in broader technical momentum on the daily study and keep the overall outlook for the USD bearish." "A break under 1.3675 support is needed to renew downside pressure on the USD at this point, however."
14:23 USD consolidates as geo-political risks recede – Scotiabank
The US Dollar (USD) is a little firmer overall on the day so far but its broader performance only reflects a consolidation in this week’s sharp losses.
The US Dollar (USD) is a little firmer overall on the day so far but its broader performance only reflects a consolidation in this week’s sharp losses. Amid a calmer geopolitical backdrop, the major currencies are trading mixed against the big dollar; the AUD and NZD are relative outperformers while the JPY is a notable underachiever, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report. USD steady to firmer versus majors"Global stocks are mixed (firmer in Asia, weaker in Europe and flat to slightly lower in US equity future terms). Crude is somewhat firmer. News that the US bombing run may only have set back Iran’s nuclear plans 'a few months' and reports that Israel’s military leadership stated that the campaign against Iran is not over may mean that regional tensions remain close to the surface for energy markets. Fed Chair Powell played it pretty even handedly in yesterday’s congressional testimony (expect more of the same in his Senate appearance today).""The chair stuck to the messaging evident at last week’s post-FOMC press conference when he noted that tariff uncertainty precluded any adjustment in rates at the moment. He did concede, however, that Fed thinking is constantly adapting and that lower than expected inflation or a weaker labour market could see rate cuts sooner, and these comments weighed on USD sentiment to an extent. Soft US data, in the form of weaker than expected consumer confidence for June, also weighed on the USD mood yesterday." "The US data run has disappointed market forecasts consistently in the past few weeks, suggesting that analysts’ expectations are too high and/or the economy is weaker than expected. In contrast, Eurozone data surprises remain positive. The “spread” between the weakening US data trend and resilient Eurozone surprise index will help support EUR sentiment and add to broader pressure on the USD, likely capping nearterm DXY gains around 98.40/50. DXY losses will pick up below 98.00. As a proxy for global trade trends, weak Fedex results yesterday underscore the risk of a further retrenchment in global trade activity amid tariff uncertainty."
14:00 United States MBA Mortgage Applications: 1.1% (June 20) vs -2.6%
United States MBA Mortgage Applications: 1.1% (June 20) vs -2.6%
13:54 Gold Price Forecast: XAU/USD stays below 20-day EMA on broader risk-on rally
Gold price (XAU/USD) consolidates around $3,325 during European trading hours on Wednesday.
.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}Gold price strives to gains ground while broader risk rally dampens safe-haven demand.The Israel-Iran ceasefire has strengthened investors’ risk appetite.Fed Powell stated on Tuesday that the current monetary policy is appropriate considering uncertainty surrounding the tariff policy.Gold price (XAU/USD) consolidates around $3,325 during European trading hours on Wednesday. The precious metal wobbles inside the Tuesday’s trading range, while its outlook seems uncertain as investors continue to increase bets in riskier assets, following the announcement of a ceasefire between Israel and Iran on Tuesday.Easing geopolitical tensions often lead to a decline in demand for safe-haven assets, such as Gold.United States (US) President said in a post on Truth.Social on Wednesday the both Israel and Iran have agreed to a truce and urged them not to violate the same.Meanwhile, the comments from Federal Reserve (Fed) Jerome Powell in his semi-annual testimony on Tuesday in which he dashed hopes of an interest rate cut in the July monetary policy meeting has also weigh on the Gold price.Jerome Powell stated that the central bank is “well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance”. Powell guided that the central bank will closely monitor the “impact of tariffs imposed by US President Trump on inflation through the June and July data”. He added that he will support interest rate cuts sooner if data suggests that the impact of tariffs on inflation is not as big as the Fed anticipated earlier.Theoretically, higher interest rates by the Fed for a longer period bode poorly for non-yielding assets such as Gold.Gold technical analysisGold price trades in an Ascending Triangle formation on a daily timeframe, which indicates volatility contraction. The horizontal resistance of the above-mentioned chart pattern is plotted from the April 22 high around $3,500, while the upward-sloping trendline is placed from the April 7 low of $2,957.The precious metal trades below the 20-day Exponential Moving Average (EMA), suggesting that the near-term trend has turned bearish.The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, indicating a sideways trend.Looking up, the Gold price would enter in an unchartered territory after breaking above the psychological level of $3,500 decisively. Potential resistances would be $3,550 and $3,600.Alternatively, a downside move by the Gold price below the May 29 low of $3,245 would drag it towards the round-level support of $3,200, followed by the May 15 low at $3,121.Gold daily chart
Gold FAQs Why do people invest in Gold? 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. Who buys the most Gold? 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. How is Gold correlated with other assets? 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. What does the price of Gold depend on? 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.
Gold FAQs Why do people invest in Gold? 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. Who buys the most Gold? 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. How is Gold correlated with other assets? 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. What does the price of Gold depend on? 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.
13:53 AUD: All clear on inflation – Commerzbank
Australia also reported its monthly inflation figures this morning, Commerzbank's FX analyst Volkmar Baur notes.
Australia also reported its monthly inflation figures this morning, Commerzbank's FX analyst Volkmar Baur notes. Trend in inflation is moving in the right direction"Although only part of the price index is examined and updated monthly, this still provides an excellent early indication of the quarterly ‘full’ inflation report. With a year-on-year increase of 2.1%, inflation has now reached the lower end of the Reserve Bank of Australia's target range, retrospectively validating the central bank's 20 May decision to cut interest rates. The next meeting is scheduled in two weeks' time, and I would expect another cut in the cash rate then as well.""Two figures in the inflation report are particularly encouraging. Firstly, inflation in service prices fell to 3.29% year-on-year, which is the lowest level in three years. Given the still tight labour market, the service sector is one of the central bank's main concerns. The significant decline should therefore be just what the central bank needs. It could be argued that the sharp decline in package holidays contributed to this, and that this sub-component is highly susceptible to fluctuations." "However, the so-called 'trimmed mean' inflation also fell to just 2.4% year-on-year in May, its lowest level since late 2021. By definition, this calculation method excludes components susceptible to volatility. Therefore, the trend in inflation is moving in the right direction, paving the way for the next key interest rate cut on 8 July. However, the market has fully priced in this step, so it should not affect the AUD."
13:46 USD/JPY recovery extends beyond 145.50 with BoJ's tightening plans into question
The US Dollar firmed up on Wednesday, as the market ponders the durability of the Middle East ceasefire, while the Yen declined across the board as the BoJ’s Summary of Opinions suggests that the bank might leave its monetary tightening plans in the drawer for some time.
.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}The US Dollar regains lost ground as investors consider the durability of the Middle East truce.The BoJ's summary of opinions casts doubt on upcoming rate hikes.Hopes of Fed cuts in the second half of the year are weighing on the US Dollar's recovery.
The US Dollar firmed up on Wednesday, as the market ponders the durability of the Middle East ceasefire, while the Yen declined across the board as the BoJ’s Summary of Opinions suggests that the bank might leave its monetary tightening plans in the drawer for some time.The risk appetite seen on Tuesday following the truce between Israel and Iran has eased on Wednesday. A report by the US Intelligence stated that Tehran’s plans to enrich uranium have been delayed for just some months, instead of “obliterated” as President Trump said, has left investors wondering about the durability of the ceasefire.Beyond that, the Summary of Opinions of the last meeting by the Bank of Japan revealed that the uncertainty about the impact of Trump’s tariffs caused a divergence among policymakers, which is likely to delay the bank's monetary tightening plans.Hopes of fed cuts remain aliveBoJ policymakers showed increasing concerns about the high economic uncertainties and the upside risks from inflation and called for maintaining the accommodative policy for some more time. One member considered that the bank should keep hiking rates despite the uncertain context.In the US, Fed Chair Jerome Powell reaffirmed his “wait and see” stance despite pressures from President Trump to cut rates. The weak consumer sentiment data reñeased shortly afterwards, however, cemented hopes that the bank will cut rates twice this year, which are likely to keep the US Dollar’s upside attempts subdued. Central banks FAQs What does a central bank do? Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%. What does a central bank do when inflation undershoots or overshoots its projected target? A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing. Who decides on monetary policy and interest rates? A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%. Is there a president or head of a central bank? Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.
The US Dollar firmed up on Wednesday, as the market ponders the durability of the Middle East ceasefire, while the Yen declined across the board as the BoJ’s Summary of Opinions suggests that the bank might leave its monetary tightening plans in the drawer for some time.The risk appetite seen on Tuesday following the truce between Israel and Iran has eased on Wednesday. A report by the US Intelligence stated that Tehran’s plans to enrich uranium have been delayed for just some months, instead of “obliterated” as President Trump said, has left investors wondering about the durability of the ceasefire.Beyond that, the Summary of Opinions of the last meeting by the Bank of Japan revealed that the uncertainty about the impact of Trump’s tariffs caused a divergence among policymakers, which is likely to delay the bank's monetary tightening plans.Hopes of fed cuts remain aliveBoJ policymakers showed increasing concerns about the high economic uncertainties and the upside risks from inflation and called for maintaining the accommodative policy for some more time. One member considered that the bank should keep hiking rates despite the uncertain context.In the US, Fed Chair Jerome Powell reaffirmed his “wait and see” stance despite pressures from President Trump to cut rates. The weak consumer sentiment data reñeased shortly afterwards, however, cemented hopes that the bank will cut rates twice this year, which are likely to keep the US Dollar’s upside attempts subdued. Central banks FAQs What does a central bank do? Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%. What does a central bank do when inflation undershoots or overshoots its projected target? A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing. Who decides on monetary policy and interest rates? A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%. Is there a president or head of a central bank? Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.
13:36 Powell hearing brings little new information – Commerzbank
Yesterday's eagerly awaited semi-annual hearing of Fed Chairman Jerome Powell before the US House of Representatives revealed little that was new.
Yesterday's eagerly awaited semi-annual hearing of Fed Chairman Jerome Powell before the US House of Representatives revealed little that was new. Essentially, he reiterated what we already know: that policymakers are under no pressure to adjust monetary policy quickly and can instead wait to see what impact US trade policy has. However, he did acknowledge that the impact of tariffs on inflation has been less severe than anticipated in April, which could result in interest rate cuts being implemented sooner than expected a few weeks ago, Commerzbank's FX analyst Michael Pfister notes. Additional interest rate cuts have been priced in"The hearing comes at a time when decision-makers appear to be positioning themselves. My colleague Antje touched on this already yesterday. On Monday, Michelle Bowman of the Board of Governors advocated interest rate cuts in July if inflationary pressure remains subdued, which led to a significant depreciation of the US dollar. Federal Reserve Governor Christopher Waller had previously made similar comments, stating that he believed the federal funds rate was 1.25–1.5 percentage points above the neutral level. Both are candidates to succeed Jerome Powell next year.""Other decision-makers have fought back in recent hours. For example, the president of the Kansas City Fed does not seem to be in any hurry to cut interest rates. Like Powell, he would prefer to wait and see the effects of US tariffs. Federal Reserve Governor Michael Barr also expressed a similar view, emphasising that the real economy is currently in a solid position.""Heated discussions about an interest rate cut could take place as early as July if upcoming inflation figures do not indicate a greater impact from US tariffs. In such a scenario, expectations of interest rate cuts are likely to gather pace again. Since last week, additional interest rate cuts of around 12 basis points have been priced in by the end of the year. If the consensus within the FOMC continues to crumble in the coming weeks, this figure is likely to rise. This is not a good sign for the US dollar."
13:31 Canadian inflation remains acceptably low – Commerzbank
Yesterday's Canadian inflation figures were broadly in line with expectations, with the only deviation being the non-seasonally adjusted month-on-month headline rate, which was slightly higher than expected, Commerzbank's FX analyst Michael Pfister notes.
Yesterday's Canadian inflation figures were broadly in line with expectations, with the only deviation being the non-seasonally adjusted month-on-month headline rate, which was slightly higher than expected, Commerzbank's FX analyst Michael Pfister notes. CAD benefits from weaker USD"However, this is not a cause for concern. Unlike in other Western countries, inflation in Canada has been under control for some time. After two months of declining prices, one month of higher price increases does not make a difference. The Bank of Canada (BoC) is therefore unlikely to be particularly concerned by the figures. Officials have recently emphasised on several occasions that US tariffs are likely to lead to price increases. However, as in the US, these effects are probably taking longer than expected to materialise.""The CAD has recently tended to move sideways. USD/CAD falling by around 8 cents since this year's high point was mainly due to the enormous depreciation of the USD, rather than a pronounced CAD rally. Continued moderate inflation is likely to increase the likelihood of further interest rate cuts by the BoC in the coming months, thereby offsetting any slow improvements in the real economy. We therefore expect lower USD/CAD levels to continue to be primarily driven by USD weakness rather than CAD strength"
13:16 USD/CNH: Any decline is unlikely to reach 7.1450 – UOB Group
Room for US Dollar (USD) to continue to edge lower against Chinese Yuan (CNH), but any decline is unlikely to reach 7.1450. In the longer run, there has been a tentative buildup in momentum; USD is likely to edge lower toward 7.1450, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Room for US Dollar (USD) to continue to edge lower against Chinese Yuan (CNH), but any decline is unlikely to reach 7.1450. In the longer run, there has been a tentative buildup in momentum; USD is likely to edge lower toward 7.1450, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. A tentative buildup in momentum24-HOUR VIEW: "Following USD price action two days ago, we highlighted the following yesterday: 'Despite the quiet price action, there has been a slight increase in downward momentum. Today, USD could edge lower, but any decline is unlikely break the major support at 7.1620. Resistance levels are at 7.1800 and 7.1900.' Our view was not wrong, as USD rose to 7.1790 and then dropped to a low of 7.1620. Although there has been no significant increase in downward momentum, we continue to see room for USD to edge lower, but given the current momentum, any decline is unlikely to reach 7.1450. Note that there is another support level at 7.1550. Today, resistance levels are at 7.1750 and 7.1800." 1-3 WEEKS VIEW: "In our latest narrative from 09 Jun, when USD was at 7.1870, we indicated at that time that USD 'has likely moved back into a range trading phase, probably between 7.1620 and 7.2200.' After trading mostly sideways for a couple of weeks, USD dipped and tested the 7.1620 level yesterday. Downward momentum is building, albeit tentatively for now. From here, provided that the ‘strong resistance’ level, currently at 7.1950, is not breached, USD is likely to edge lower toward 7.1450."
13:06 USD/CNH pressures key 7.16 support – Société Générale
USD/CNH remains under pressure after surrendering its 50-DMA in May, with bearish momentum persisting. The pair is testing key support at 7.16, and a decisive break lower could open the door to deeper losses toward 7.13 and 7.10, Société Générale's FX analysts note.
USD/CNH remains under pressure after surrendering its 50-DMA in May, with bearish momentum persisting. The pair is testing key support at 7.16, and a decisive break lower could open the door to deeper losses toward 7.13 and 7.10, Société Générale's FX analysts note. The phase of downtrend may extend"USD/CNH gave up the 50-DMA in May resulting in a steady decline. The down move tentatively stalled after carving out an interim low near 7.16. The pair is now challenging this support. If USD/CNH establishes below 7.16, the phase of downtrend may extend." "Next objectives could be located at 7.13 and the ascending trend line drawn since 2023 at 7.10/7.09. Cross above the MA at 7.20/7.21 is crucial for confirming a short-term up move."
12:59 USD/JPY: Set to retest 144.50 before a more sustained recovery – UOB Group
There is a chance for US Dollar (USD) to retest 144.50 before a more sustained recovery can be expected. In the longer run, USD appears to have moved into a range trading phase between 143.50 and 146.50, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
There is a chance for US Dollar (USD) to retest 144.50 before a more sustained recovery can be expected. In the longer run, USD appears to have moved into a range trading phase between 143.50 and 146.50, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. USD appears to have moved into a range trading phase24-HOUR VIEW: "USD rose to 148.02 on Monday and then plunged. Yesterday, when it was at 145.60, we noted that 'while further declines are not ruled out, conditions are deeply oversold, and a break of the strong support at 145.05 seems unlikely.' The stronger than expected momentum outweighed the oversold conditions, as USD dropped to 144.49 before recovering to close lower by 0.81% at 144.91. While conditions remain deeply oversold, downward momentum appears to be slowing, albeit tentatively. From here, there is a chance for USD to retest the 144.50 level before a more sustained recovery can be expected. A dip below this level is not ruled out, but based on the current momentum, any further weakness is unlikely to reach 144.00. On the upside, resistance levels are at 145.20 and 145.55." 1-3 WEEKS VIEW: "We have held a positive USD view since late last week (see annotations in the chart below). After USD rose to 148.02 and then plunged on Monday, we indicated yesterday (24 Jun, spot at 145.60) that 'as long as 145.05 is not breached, there is a slim chance for USD to rise to 148.00 again.' USD subsequently broke below 145.05, as it dropped to a low of 144.49. USD appears to have moved into a range trading phase. For the time being, we expect USD to trade between 143.50 and 146.50."
12:57 US Dollar Index (DXY) returns above 98.00 as investors digest the Middle East truce
The US Dollar is trading with minor gains on Wednesday, trimming losses after a nearly 1.30% decline on the previous two days.
.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}The Dollar trims previous losses as the optimism about the Middle East ceasefire eases.Fed Chairman Powell maintained a cautious stance towards interest rate cuts in his testimony to Congress.A downbeat Consumer Confidence survey undermined confidence in Powell's hawkish stance.
The US Dollar is trading with minor gains on Wednesday, trimming losses after a nearly 1.30% decline on the previous two days. Markets have turned more cautious as the enthusiasm about the ceasefire in the Middle East ebbs, although Investors’ hopes that the Fed will cut rates over the next months are limiting upside attempts.
The ceasefire between Israel and Iran holds for the second day, and that is keeping a moderate appetite for risk, but a US intelligence report stating that the attacks had only delayed Iran’s nuclear program for a few months casts doubt on a long-lasting peace.Fed Powell fails to curb rate cut expectationsOn Tuesday, Fed Chairman Jerome Powell resisted President Trump's calls for a rate cut and the divergence within the central bank’s monetary policy committee, and confirmed that the central bank is not rushing to cut rates.
Powell reiterated that the bank was well-positioned to react to a highly likely increase in prices when the impact of Trump’s tariffs filters through the US economy, to weigh on economic activity.
Macroeconomic data, however, revealed that the economy is already losing steam. The Conference Board’s Consumer Confidence deteriorated against expectations in June, with consumers wary about the labour market.
These figures come after a string of downbeat macroeconomic releases over the last two weeks, which are feeding market expectations that the bank will cut rates twice this year. Futures markets are increasingly pricing a 25 bps cut in September and another one in December, and this is keeping US Dollar’s upside attempts limited. Fed FAQs What does the Federal Reserve do, how does it impact the US Dollar? Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback. How often does the Fed hold monetary policy meetings? The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis. What is Quantitative Easing (QE) and how does it impact USD? In extreme situations, the Federal Reserve may resort to a policy named 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 during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar. What is Quantitative Tightening (QT) and how does it impact the US Dollar? Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
The US Dollar is trading with minor gains on Wednesday, trimming losses after a nearly 1.30% decline on the previous two days. Markets have turned more cautious as the enthusiasm about the ceasefire in the Middle East ebbs, although Investors’ hopes that the Fed will cut rates over the next months are limiting upside attempts.
The ceasefire between Israel and Iran holds for the second day, and that is keeping a moderate appetite for risk, but a US intelligence report stating that the attacks had only delayed Iran’s nuclear program for a few months casts doubt on a long-lasting peace.Fed Powell fails to curb rate cut expectationsOn Tuesday, Fed Chairman Jerome Powell resisted President Trump's calls for a rate cut and the divergence within the central bank’s monetary policy committee, and confirmed that the central bank is not rushing to cut rates.
Powell reiterated that the bank was well-positioned to react to a highly likely increase in prices when the impact of Trump’s tariffs filters through the US economy, to weigh on economic activity.
Macroeconomic data, however, revealed that the economy is already losing steam. The Conference Board’s Consumer Confidence deteriorated against expectations in June, with consumers wary about the labour market.
These figures come after a string of downbeat macroeconomic releases over the last two weeks, which are feeding market expectations that the bank will cut rates twice this year. Futures markets are increasingly pricing a 25 bps cut in September and another one in December, and this is keeping US Dollar’s upside attempts limited. Fed FAQs What does the Federal Reserve do, how does it impact the US Dollar? Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback. How often does the Fed hold monetary policy meetings? The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis. What is Quantitative Easing (QE) and how does it impact USD? In extreme situations, the Federal Reserve may resort to a policy named 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 during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar. What is Quantitative Tightening (QT) and how does it impact the US Dollar? Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
12:55 AUD/USD: Taking cues from USD, risk sentiment – OCBC
Australian Dollar (AUD) slipped modestly in early trade after May CPI came in lower at 2.1% y/y (vs. expectations of 2.3%). AUD was last seen at 0.65 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.
Australian Dollar (AUD) slipped modestly in early trade after May CPI came in lower at 2.1% y/y (vs. expectations of 2.3%). AUD was last seen at 0.65 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note. Bearish momentum on daily chart shows signs of fading"Trimmed mean CPI was also lower at 2.4% y/y (vs. 2.8% prior). Softer print also added to expectations for RBA to cut rates at next meeting in Jul. That said, AUD reversed the modest losses as soft USD momentum appears dominant." "Bearish momentum on daily chart shows signs of fading while RSI rose. Resistance at 0.6550 levels. Support at 0.6485, 0.6450 levels (50 DMA). Easing of geopolitical tensions and hint of dovish tilt remains supportive of risk-sensitive AUD."
12:52 NZD/USD: Expected to trade in a range – UOB Group
New Zealand Dollar (NZD) is expected to trade in a range against US Dollar (USD), most likely between 0.5975 and 0.6040.
New Zealand Dollar (NZD) is expected to trade in a range against US Dollar (USD), most likely between 0.5975 and 0.6040. In the longer run, sharp but short-lived swings have resulted in a mixed outlook; NZD is likely to trade in a range of 0.5900/0.6090 for now, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. Sharp but short-lived swings have resulted in a mixed outlook24-HOUR VIEW: "While we expected NZD to 'rebound further' yesterday, we highlighted that 'overbought conditions suggest 0.6040 is likely out of reach.' However, NZD rose and touched 0.6040 before closing at 0.6007 (+0.52%). Conditions remain overbought, but this time around, given that upward momentum is slowing, we expect NZD to trade in a range, most likely between 0.5975 and 0.6040." 1-3 WEEKS VIEW: "We stated yesterday (24 Jun, spot at 0.5995) that the recent 'sharp but short-lived swings have resulted in a mixed outlook.' We were of the view that NZD 'is likely to trade in a range of 0.5900/0.6090 for now.' Our view remains unchanged.
12:48 AUD/USD wobbles around 0.6500, soft Australian CPI pave way for interest rate cuts
The AUD/USD pair trades in a tight range around 0.6500 during the European trading session on Wednesday.
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The Aussie pair oscillates inside the Thursday’s trading range, while soft Australian Monthly Consumer Price Index (CPI) data for May has increased hopes of an interest rate cut by the Reserve Bank of Australia (RBA) in the July policy meeting.The data showed earlier in the day that the Monthly CPI grew moderately by 2.1% on year, compared to expectations of 2.3% and the prior reading of 2.4%.Economists at Commonwealth Bank (CBA) said in a note after the Australian inflation data release that the soft inflation data should provide “comfort to the RBA to bring the Official Cash Rate (OCR) lower swiftly to the neutral rate around 3.35%”.Meanwhile, the US Dollar (USD) strives to gain ground after sliding to near its weekly low. The US Dollar Index (DXY), which tracks the Greenbacks value against six major currencies, trades cautiously around 98.00. The US Dollar faced sharply on Tuesday after United States (US) President Donald Trump announced a ceasefire between Israel and Iran, which led to a decline in the demand for safe-haven assets.On the domestic front, Federal Reserve (Fed) Chair Jerome Powell stated in his semi-annual testimony on Tuesday that the central bank is “well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance”. Powell guided that the central bank will closely monitor the impact of tariffs on inflation during the summer. Economic Indicator Monthly Consumer Price Index (YoY) The Monthly Consumer Price Index (CPI), released by the Australian Bureau of Statistics on a monthly basis, measures the changes in the price of a fixed basket of goods and services acquired by household consumers. The indicator was developed to provide inflation data at a higher frequency than the quarterly CPI. The YoY reading compares prices in the reference month to the same month a year earlier. A high reading is seen as bullish for the Australian Dollar (AUD), while a low reading is seen as bearish. Read more. Last release: Wed Jun 25, 2025 01:30 Frequency: Monthly Actual: 2.1% Consensus: 2.3% Previous: 2.4% Source: Australian Bureau of Statistics
12:33 Silver price today: Silver falls, according to FXStreet data
Silver prices (XAG/USD) fell on Wednesday, according to FXStreet data.
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Silver prices (XAG/USD) fell on Wednesday, according to FXStreet data. Silver trades at $35.75 per troy ounce, down 0.49% from the $35.92 it cost on Tuesday.
Silver prices have increased by 23.72% since the beginning of the year. Unit measure Silver Price Today in USD Troy Ounce 35.75 1 Gram 1.15
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 92.95 on Wednesday, up from 92.53 on Tuesday. Silver FAQs Why do people invest in Silver? Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets. Which factors influence Silver prices? Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices. How does industrial demand affect Silver prices? Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices. How do Silver prices react to Gold’s moves? Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver. (An automation tool was used in creating this post.)
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 92.95 on Wednesday, up from 92.53 on Tuesday. Silver FAQs Why do people invest in Silver? Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets. Which factors influence Silver prices? Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices. How does industrial demand affect Silver prices? Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices. How do Silver prices react to Gold’s moves? Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver. (An automation tool was used in creating this post.)
12:27 USD/JPY: Decline finds support at 21, 50 DMAs – OCBC
USD/JPY turned lower, tracking the dip in UST yields (on dovish Fed rhetoric) while oil prices hold losses (as geopolitical tensions in Middle East subsided for now). USD/JPY was last at 145.62 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.
USD/JPY turned lower, tracking the dip in UST yields (on dovish Fed rhetoric) while oil prices hold losses (as geopolitical tensions in Middle East subsided for now). USD/JPY was last at 145.62 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note. Bullish momentum on daily chart "Comments from BoJ’s Tamura also saw JPY strengthened moderately. In particular, he said that BoJ may need to raise interest rates decisively if upside inflation risks rise, even if it potentially faces uncertainty ahead. He also mentioned that inflation may reach its 2% target sooner than expected. Don’t see 0.5% as barrier for BoJ rate hikes and BoJ must raise rate in timely, appropriate fashion without being too quick or too late.""We continue to look for USDJPY to trade lower, premised on Fed likely to cut in due course and BoJ resuming policy normalization while 'sell USD' narrative remains alive. Bullish momentum on daily chart shows is fading while RSI fell. Gravestone doji (formed the day before) is typically associated with a bearish reversal and had seen follow-thru in price action overnight." "Risks skewed to the downside but key support at 144.20/40 levels (23.6% fibo, 21, 50 DMAs). Decisive break below should see more downside play out. Resistance at 146.60 (100 DMA), 147.15 (38.2% fibo retracement of 2025 high to low)."
12:23 Switzerland expects US tariffs to remain at the current rate of 10% after July 9 – Bloomberg
Bloomberg cited Switzerland’s government officials, stating that they “expect US tariffs to remain at the current rate of 10% after the 90-day grace period ends on July 9.”
Bloomberg cited Switzerland’s government officials, stating that they “expect US tariffs to remain at the current rate of 10% after the 90-day grace period ends on July 9.”The government said that the US “has repeatedly acknowledged that Switzerland is acting in good faith,” adding that it continues to pursue the goal of reaching an agreement as soon as possible, per Bloomberg.
12:22 AUD/USD: Expected to trade in a sideways range of 0.6465/0.6515 – UOB Group
Australian Dollar (AUD) is expected to trade in a sideways range of 0.6465/0.6515 against US Dollar (USD). In the longer run, current price movements are likely part of a broad range trading phase between 0.6385 and 0.6555, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Australian Dollar (AUD) is expected to trade in a sideways range of 0.6465/0.6515 against US Dollar (USD). In the longer run, current price movements are likely part of a broad range trading phase between 0.6385 and 0.6555, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. Current price movements are likely part of a broad range24-HOUR VIEW: "When AUD was at 0.6470 yesterday, we indicated that 'while overbought, the advance in AUD could test 0.6505 before leveling off.' We added, 'the major resistance at 0.6555 is not expected to come into view.' AUD subsequently rose to 0.6519 before closing at 0.6490 (+0.47%). Upward momentum seems to have eased, and today, instead of expecting AUD to trade higher, we expect it to trade in a sideways range of 0.6465/0.6515." 1-3 WEEKS VIEW: "Not much has changed since our update yesterday (24 Jun, spot at 0.6470). As highlighted, the current price movements are likely part of a broad range trading phase, probably between 0.6385 and 0.6555. Looking ahead, if the recent volatility eases, we would then be able to narrow the expected range."
12:13 Gold prices fall after the Iran-Israel ceasefire – ING
In precious metals, Gold prices fell yesterday by more than 1% to $3,324/oz as both Israel and Iran reportedly upheld the ceasefire agreement after some earlier confusion and the intervention of the US president, ING's commodity experts Ewa Manthey and Warren Patterson note.
In precious metals, Gold prices fell yesterday by more than 1% to $3,324/oz as both Israel and Iran reportedly upheld the ceasefire agreement after some earlier confusion and the intervention of the US president, ING's commodity experts Ewa Manthey and Warren Patterson note.Iran-Israel ceasefire is reducing safe haven demandSilver also performed weakly as broader economic sentiment improved. Additional pressure on Gold prices also stems from expectations that Fed Chair Jerome Powell may not be in a hurry to implement further rate cuts, considering inflation continues to exceed long-term targets and the Fed is observing the unfolding impact of import tariffs."
12:02 GBP/USD: Likely to trade in a range of 1.3555/1.3655 – UOB Group
Upward momentum has slowed somewhat, but instead of pulling back, Pound Sterling (GBP) is likely to trade in a range of 1.3555/1.3655 against US Dollar (USD).
Upward momentum has slowed somewhat, but instead of pulling back, Pound Sterling (GBP) is likely to trade in a range of 1.3555/1.3655 against US Dollar (USD). In the longer run, outlook appears mixed; GBP could trade in a range of 1.3420/1.3655 for now, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. Outlook appears mixed for GBP24-HOUR VIEW: "Following Monday’s price movements, we indicated yesterday (Tuesday), that 'there is a chance for GBP to test 1.3580 before the risk of a pullback increases.' We also indicated that 'the major resistance at 1.3655 is not expected to come into view.' We underestimated the upward momentum, as GBP rose to a high of 1.3648 before easing. Upward momentum has slowed somewhat, but instead of pulling back, GBP is likely to trade sideways at these higher levels, probably in a range of 1.3555/1.3655." 1-3 WEEKS VIEW: "We revised our view from negative to neutral yesterday (24 Jun, spot at 1.3545), indicating that the recent 'momentum buildup has faded.' We also indicated that 'the outlook appears mixed, and GBP could trade in a range of 1.3420/1.3655 for now.' Our view remains unchanged, but should GBP break and hold above 1.3655, it would increase the potential for GBP moving above 1.3700.
11:57 LME Copper squeeze – ING
Copper continues to rise on the LME for a fourth day as tight supply remains in focus. , ING's commodity experts Ewa Manthey and Warren Patterson note.
Copper continues to rise on the LME for a fourth day as tight supply remains in focus. , ING's commodity experts Ewa Manthey and Warren Patterson note.Copper tightening follows a significant decline in inventories"Contracts for immediate delivery surged to a premium of $379/t to three-month futures on Monday, although it has since eased to around $150/t.""This level is substantially higher than the near-zero premiums seen in May 2025 and a contango of approximately $100/t at the start of the year. This tightening in the Copper market follows a significant decline in inventories, which has dropped by roughly 176kt since the start of the year, now standing at just 95kt as of Tuesday, coupled with a tight supply in the concentrate market."
11:55 DXY: Hold losses for now – OCBC
US Dollar (USD) drifted lower, on softer-than-expected US consumer confidence and in response to Fed Chair’s comments overnight.
US Dollar (USD) drifted lower, on softer-than-expected US consumer confidence and in response to Fed Chair’s comments overnight. While Powell reiterated the message that Fed need not rush to cut, he did suggest that the Fed may cut rates sooner rather than later if inflation pressures remain contained (when asked the question about the possibility of a rate cut next month). But he was careful in not committing to a timeline. Earlier, other Fed officials have indicated that a rate cut in July is a possibility. DXY was last seen at 98.01, OCBC's FX analysts Frances Cheung and Christopher Wong note. Two-way risks remain warranted"Governor Bowman expressed support for a potential rate cut if inflation remains subdued, while Goolsbee suggested that Fed should cut rates if tariff ‘dirt’ clears. Last Friday, Waller noted that the Fed could be positioned to cut rates in July. Elsewhere, IsraelIran ceasefire appears to hold as both countries said they will not break ceasefire unless the other does so first. Separately, CNN also reported that US military strikes on three of Iran’s nuclear facilities last weekend did not destroy the core components of the nuclear program and likely only set it back by months." "This may be in contrast with Trump’s claims that the strikes “completely and totally obliterated” Iran’s nuclear enrichment facilities. There is still uncertainty whether the nuclear program is destroyed – is the CNN report not accurate or if it turns out to be true, will there be follow-up strikes? As such, geopolitical tensions can be fluid, and two-way risks remain warranted (though it is likely a reduced risk than before)." "Softer USD and easing geopolitical conditions allow for previously battered Asian FX to recover. PHP, TWD, THB and MYR are leading gains in early trade. Mild bullish momentum on daily chart faded while RSI fell. Support at 98.10, 97.60 levels (recent low). Resistance at 99.50 (50 DMA), 100.2 and 100.60 levels (23.6% fibo retracement of 2025 high to low). Later tonight, Powell will deliver face Senate Committee on Banking, Housing and Urban Affairs (10pm SGT). Goolsbee is also scheduled to speak tonight on a podcast. Data focus this week is on core PCE (Friday)."
11:50 USD: Powell’s bullet dodged, at least partly – ING
Geopolitical risk has continued to diminish for markets, as the Israeli-Iranian truce has held since yesterday morning.
Geopolitical risk has continued to diminish for markets, as the Israeli-Iranian truce has held since yesterday morning. Markets will be assessing the stability of the ceasefire in the coming days, but are clearly biased towards playing the optimistic trade, judging by how quickly the oil premium has evaporated, ING's FX analyst Francesco Pesole notes.Risks remain tilted to the downside for the USD"We believe that the negative impact of the reduced geopolitical risk on the dollar has largely played out. From here, further USD losses may need to be justified by US-specific factors: data, Fed, Trump's spending bill and tariffs. Yesterday, the first of these two factors was in focus, and while a surprise drop in consumer confidence is unequivocally negative for the dollar, Fed Chair Powell's testimony was a more nuanced event.""Powell reiterated caution on easing, and implicitly kept rejecting Trump's pressure, but also seemed modestly more open to discussing the conditions for starting cuts. Markets were actively searching for any minor signs of a dovish tilt after Waller and Bowman's calls for a July cut, and felt Powell's wording was enough, judging by the positive reaction in Treasuries. There is a sharply USD-negative scenario where the Fed turns more abruptly dovish and markets doubt Fed independence. But in that scenario, Treasuries would come under pressure.""Instead, if Powell's communication allows only a moderate dovish repricing without signalling that he is bending to political pressure, the damage to the dollar can be limited. There is also a possibility that a slightly more dovish but firmly independent Fed ends up helping the dollar by helping Treasuries. Short-term rate spreads tell a small portion of the story in FX, while longer-dated yields are scrutinised much closer. We’ll see the second part of Powell’s testimony today, while the data calendar only includes housing data for May. We could see some stabilisation in the dollar, but risks remain tilted to the downside."
11:48 USD/CAD ticks up from 1.3690 with lower Oil prices hurting the loonie
The broad-based US Dollar’s reversal following the announcement of a ceasefire in the Middle East has been hollower against the Canadian Dollar, with downside attempts capped near 1.3700.
.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}The Canadian Dollar trims gains, weighed by lower Oil prices.The truce between Israel and Iran is keeping Crude prices 16% below Monday's highs.Weak US data nd hopes of Fed easing are keeping USD's upside attempts limited.The broad-based US Dollar’s reversal following the announcement of a ceasefire in the Middle East has been hollower against the Canadian Dollar, with downside attempts capped near 1.3700. The sharp decline in Oil prices is acting as a headwind for the commodity-sensitive Canadian Dollar.
A moderate optimism keeps risk appetite alive on Wednesday, in the absence of key macroeconomic data, but the bearish pressure on the US Dollar seems to have eased. The USD7CAD is showing marginal gains on Wednesday, trimming losses after a 0.2% decline over the previous two days.The CAD struggles amid low Oil pricesThe Canadian Dollar has been hit by a 16% decline in the price of Oil, Canada’s main import. The recent attacks on Iran seem to have spared the country’s main Oil plants, keeping its supply capacity intactApart from that, the ceasefire seems to have moved away the threat of a blockade in the strategic Strait of Hormuz, which was the main driver of Crude prices during the 12 days of hostilities. With a tense calm in the Middle East keeping Oil prices steady at $65, more or less where they were before the war, the Canadian Dollar is unlikely to rally.
In the US, the Fed Chair, Jerome Powell, maintained his cautious stance on his testimony to Congress, but he weak Consumer Confidence data seen and the growing divergence among the board members are keeping hopes of interest rate cuts alive. This is keeping the US Dollar’s upside attempts limited. Canadian Dollar FAQs What key factors drive the Canadian Dollar? The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar. How do the decisions of the Bank of Canada impact the Canadian Dollar? The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive. How does the price of Oil impact the Canadian Dollar? The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD. How does inflation data impact the value of the Canadian Dollar? While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar. How does economic data influence the value of the Canadian Dollar? Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
A moderate optimism keeps risk appetite alive on Wednesday, in the absence of key macroeconomic data, but the bearish pressure on the US Dollar seems to have eased. The USD7CAD is showing marginal gains on Wednesday, trimming losses after a 0.2% decline over the previous two days.The CAD struggles amid low Oil pricesThe Canadian Dollar has been hit by a 16% decline in the price of Oil, Canada’s main import. The recent attacks on Iran seem to have spared the country’s main Oil plants, keeping its supply capacity intactApart from that, the ceasefire seems to have moved away the threat of a blockade in the strategic Strait of Hormuz, which was the main driver of Crude prices during the 12 days of hostilities. With a tense calm in the Middle East keeping Oil prices steady at $65, more or less where they were before the war, the Canadian Dollar is unlikely to rally.
In the US, the Fed Chair, Jerome Powell, maintained his cautious stance on his testimony to Congress, but he weak Consumer Confidence data seen and the growing divergence among the board members are keeping hopes of interest rate cuts alive. This is keeping the US Dollar’s upside attempts limited. Canadian Dollar FAQs What key factors drive the Canadian Dollar? The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar. How do the decisions of the Bank of Canada impact the Canadian Dollar? The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive. How does the price of Oil impact the Canadian Dollar? The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD. How does inflation data impact the value of the Canadian Dollar? While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar. How does economic data influence the value of the Canadian Dollar? Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
11:47 Oil edges higher after two-day drop on ceasefire deal – ING
Oil prices rose this morning after a two-day decline, following US President Donald Trump's statement expressing his desire to maintain the flow of oil from Iran. His comments came after he declared a ceasefire between Iran and Israel, following US airstrikes on Iran’s nuclear facilities.
Oil prices rose this morning after a two-day decline, following US President Donald Trump's statement expressing his desire to maintain the flow of oil from Iran. His comments came after he declared a ceasefire between Iran and Israel, following US airstrikes on Iran’s nuclear facilities. In a Truth Social post, Trump said that China can continue to buy Iranian oil and that he hopes that the country will also be buying “plenty” from the US as well. However, a senior White House official later signalled that curbs on Iran would remain, ING's commodity experts Ewa Manthey and Warren Patterson note.OPEC+ is due to hold a video conference on July 6"WTI crude is above $65 a barrel, while Brent is trading near $68 this morning, after slumping 13% over the past two days. The Brent time spread has softened from a peak of $1.77 per barrel in backwardation last Thursday to approximately $1 per barrel this morning. However, this figure remains elevated compared to the first five months of the year, where it fluctuated around $0.25-0.50 per barrel.""While concerns regarding Middle Eastern supply have diminished for now, they have not entirely disappeared, and there remains a stronger demand for immediate supply. The conflict in the Middle East hasn’t had any significant impact on oil flows from the Persian Gulf so far. Meanwhile, exports from Iran have surged. OPEC+ is due to hold a video conference on 6 July to consider a further supply boost in August.""In the United States, the American Petroleum Institute (API) reported a decrease in crude oil inventories by 4.28 million barrels over the past week, which is significantly above the anticipated decrease of around 0.6 million barrels. In terms of refined products, gasoline inventories rose by 0.8 million barrels, while distillate inventories fell by 1.03 million barrels."
11:47 EUR/JPY Price Forecast: Rises toward 169.00 near ascending channel’s upper boundary
EUR/JPY retraces its recent losses registered in the previous session, trading around 168.80 during the European hours on Wednesday. According to the technical analysis of the daily chart, the currency cross remains within the ascending channel pattern, strengthening the bullish bias.
.fxs-major-currency-prices-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-major-currency-prices-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-major-currency-prices-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:8px 16px}table.fxs-major-currency-prices-currency-prices-table{width:100%;text-align:center;border-collapse:collapse;font-size:1rem}table.fxs-major-currency-prices-currency-prices-table th{background-color:#f2f2f2}table.fxs-major-currency-prices-currency-prices-table td{color:#fff}table.fxs-major-currency-prices-currency-prices-table td.green{background-color:#9cd6cd}table.fxs-major-currency-prices-currency-prices-table td.red{background-color:#faafb5}table.fxs-major-currency-prices-currency-prices-table td.blue-grey{background-color:#888a93}.fxs-major-currency-prices-currency-prices-legend{font-size:11px;margin:8px;color:#49494f}@media (min-width:680px){.fxs-major-currency-prices-content{font-size:16px;line-height:21.6px}.fxs-major-currency-prices-title{font-size:19.2px;line-height:27.2px}}.fxs-major-currency-prices-currency-price td.dark-green{background-color:#39ad9a}.fxs-major-currency-prices-currency-price td.light-green{background-color:#9cd6cd}.fxs-major-currency-prices-currency-price td.gray{background-color:#888a93}.fxs-major-currency-prices-currency-price td.light-red{background-color:#faafb5}.fxs-major-currency-prices-currency-price td.strong-red{background-color:#f55e6a}EUR/JPY targets the upper boundary of the ascending channel around 169.20.The 14-day RSI is positioned slightly lower than 70, strengthening the bullish bias.The nine-day EMA of 167.68 would act as the primary support.EUR/JPY retraces its recent losses registered in the previous session, trading around 168.80 during the European hours on Wednesday. According to the technical analysis of the daily chart, the currency cross remains within the ascending channel pattern, strengthening the bullish bias.The short-term price momentum is stronger as the EUR/JPY cross is positioned above the nine-day Exponential Moving Average (EMA). The 14-day Relative Strength Index (RSI) is positioned slightly below the 70 mark, strengthening the bullish bias. However, the downward correction could be possible if the RSI breaks above the 70 mark, indicating an overbought situation.On the upside, the EUR/JPY cross may re-test the upper boundary of the ascending channel around 169.20, followed by the 11-month high of 169.72, reached on June 23. A successful breach above this crucial resistance zone would reinforce the bullish bias and support the currency cross to approach the psychological 170.00 level.The initial support appears at the nine-day EMA of 167.68. A successful break below this level would weaken the short-term price momentum and prompt the EUR/JPY cross to test the ascending channel’s lower boundary around 166.00, followed by the 50-day EMA at 164.57.EUR/JPY: Daily Chart Euro PRICE Today The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Japanese Yen. USD EUR GBP JPY CAD AUD NZD CHF USD 0.03% -0.03% 0.35% 0.06% -0.12% -0.33% -0.02% EUR -0.03% -0.04% 0.32% 0.00% -0.18% -0.37% -0.05% GBP 0.03% 0.04% 0.36% 0.06% -0.11% -0.33% 0.02% JPY -0.35% -0.32% -0.36% -0.35% -0.45% -0.65% -0.33% CAD -0.06% -0.00% -0.06% 0.35% -0.10% -0.26% -0.04% AUD 0.12% 0.18% 0.11% 0.45% 0.10% -0.27% 0.13% NZD 0.33% 0.37% 0.33% 0.65% 0.26% 0.27% 0.35% CHF 0.02% 0.05% -0.02% 0.33% 0.04% -0.13% -0.35% 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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
11:44 EUR/USD: Likely to trade between 1.1480 and 1.1660 – UOB Group
Euro (EUR) is unlikely to rise much further against US Dollar (USD), it is more likely to trade in a range of 1.1575/1.1645. In the longer run, EUR is expected to continue to trade in a range; given the increase in volatility, it is now likely to trade between 1.1480 and 1.1660.
Euro (EUR) is unlikely to rise much further against US Dollar (USD), it is more likely to trade in a range of 1.1575/1.1645. In the longer run, EUR is expected to continue to trade in a range; given the increase in volatility, it is now likely to trade between 1.1480 and 1.1660. EUR is expected to continue to trade in a range24-HOUR VIEW: "On Monday, EUR gapped down on the open and then soared to close higher at 1.1576. In the early Asian session yesterday, when EUR was at 1.1585, we highlighted the following: 'The sharp rally may extend further, but deeply overbought conditions suggest EUR is unlikely to break clearly above 1.1620.' However, EUR broke above 1.1620, reached a high of 1.1641, before easing off. Conditions remain overbought. This, combined with slowing momentum, suggests EUR is unlikely to rise much further. Today, EUR is more likely to trade in a range of 1.1575/1.1645." 1-3 WEEKS VIEW: "Last Thursday (19 Jun, spot at 1.1475), we highlighted that EUR 'is likely to trade in a range for now, probably between 1.1400 and 1.1570.' After EUR rose above 1.1570 on Monday, we indicated yesterday (24 Jun, spot at 1.1585) that 'while EUR has moved above 1.1570, there has been no significant increase in upward momentum.' However, we pointed out that 'given the increase in volatility, we now expect EUR to trade in a range of 1.1480/1.1660.' EUR subsequently rose to 1.1641. Although there has been an increase in upward momentum, it is not sufficient to suggest a sustained advance. For the time being, we continue to expect EUR to trade in a range between 1.1480 and 1.1660. Looking ahead, should EUR break and hold above 1.1660, it could signal the start of a move above 1.1700."
11:42 US Pres. Trump: Will not allow Iran to enrich uranium
When asked about Iran's plans to enrich Uranium, United States (US) President Donald Trump said on Wednesday that they will not allow that "militarily," as reported by Reuters.
When asked about Iran's plans to enrich Uranium, United States (US) President Donald Trump said on Wednesday that they will not allow that "militarily," as reported by Reuters."The Iranian nuclear program is put back decades," Trump noted and said that the US hit on Iran ended the war.Meanwhile, US Defense Secretary Pete Hegseth said the bombs landed right where they were supposed to, adding that it was "devastation".Market reactionThese comments don't seem to be having a noticeable impact on market sentiment. At the time of press, US stock index futures were trading virtually unchanged on the day.
11:33 EUR: Testing the big resistance – ING
The EUR/USD rally stalled again in the 1.160-1.165 area and it is plausible markets may require a more compelling macro story (most likely from the US) rather than the mere unwinding of geopolitical risks for a break higher, ING's FX analyst Francesco Pesole notes.
The EUR/USD rally stalled again in the 1.160-1.165 area and it is plausible markets may require a more compelling macro story (most likely from the US) rather than the mere unwinding of geopolitical risks for a break higher, ING's FX analyst Francesco Pesole notes. EUR/USD remains predominantly a USD story"A lot of focus in Europe is on the ongoing NATO summit in the Netherlands which Trump joined yesterday evening. Any signs that the US safety guarantees for European allies are faltering further – or becoming even more transactional than expected – can sour some sentiment in European markets. Especially after Spain’s refusal to meet the 5% defence spending target has curbed any enthusiasm for a coordinated spending boost.""That said, EUR/USD remains predominantly a dollar story, and the market’s blatant disliking of the greenback – confirmed by limited gains during the Middle East turmoil – means the upside potential remains intact."
11:28 USD/CHF holds position around 0.8050 following Swiss ZEW Survey Expectations
USD/CHF moves sideways after registering approximately 1% losses in the previous session, trading around 0.8050 during the European hours on Wednesday.
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The pair moves little following the release of the Swiss ZEW Survey Expectations, which eased to a 2.1 decline for June, against the previous 22 decline.The USD/CHF maintains its position near 0.8034, the lowest since September 2011, which was recorded on Tuesday. This is attributed to the Swiss Franc (CHF) receiving support from safe-haven demand, while the weakening US Dollar (USD) on the Middle East ceasefire. US President Donald Trump announced that a ceasefire between Iran and Israel had taken effect, raising hopes for an end to the 12-day conflict.However, traders adopt caution amid uncertainty over the ceasefire’s durability. A US intelligence report suggested that US attacks on Iranian nuclear sites have set back Tehran's program by only a matter of months. Additionally, Iranian Foreign Minister Abbas Araghchi said that the country's nuclear program continues.Federal Reserve (Fed) Chair Jerome Powell stated during his testimony before the congressional budget committee on Tuesday that rate cuts could be delayed until sometime in the fourth quarter. Powell also said that rate cuts may continue if the time is right. However, He noted that data suggests that at least some of the tariffs will hit consumers and will start to see more tariff inflation starting in June. Economic Indicator ZEW Survey – Expectations The ZEW Survey Expectations published by the Centre for European Economic Research presents business conditions, employment conditions and other elements affecting the day to day running of a business in Switzerland. Generally speaking, a high reading is seen as positive (or bullish) for the CHF, whereas a low reading is seen as negative (or bearish). Read more. Last release: Wed Jun 25, 2025 08:00 Frequency: Monthly Actual: -2.1 Consensus: - Previous: -22 Source: ZEW - Leibniz Centre for European Economic Research
11:18 EUR/USD clings to gains on US Dollar weakness amid easing geopolitical tensions
The EUR/USD is trading practically flat on Wednesday, just below a multi-year high near 1.1640, last seen in November 2021, consolidating gains after a nearly 1.40% rally in the previous two days.
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.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}The Euro remains steady near over three-year highs against the US Dollar, supported by a moderate risk appetite.Weak US data and higher hopes of Fed interest rate cuts are weighing on the US Dollar.EUR/USD maintains its positive tone with resistance at 1.1630-1.1640 and 1.1700.The EUR/USD is trading practically flat on Wednesday, just below a multi-year high near 1.1640, last seen in November 2021, consolidating gains after a nearly 1.40% rally in the previous two days. A moderate appetite for risk continues to drive markets, despite the fragility of the ceasefire between Israel and Iran, and is keeping the safe-haven US Dollar (USD) on its back foot.
Oil prices have ticked up from Tuesday's lows butt remain well below the highs seen last week. Iran's Oil and Natural Gas facilities seem to have been little affected by the bombings, and Oil traffic through the strategic Strait of Hormuz does not seem under threat, at least for now. The relatively low Crude prices are an additional support to the Euro (EUR) as they ease inflationary pressures on the Eurozone economy.
In the US, on Tuesday, the Federal Reserve (Fed) Chairman Jerome Powell reiterated that the central bank is in no rush to cut interest rates at the Semiannual Monetary Policy Report to Congress. Pressure from US President Donald Trump and the growing dissension among Fed officials does not seem to have scratched Powell's hawkish stance.
The market, however, keeps betting on a rate cut in September, especially after the downbeat Consumer Confidence reading released on Tuesday. Increasing concerns about employment are limiting US consumers' purchasing decisions and increasing pressure on the central bank to adopt a less restrictive monetary policy.
Powell will testify again on Wednesday, but he is unlikely to change his views. The economic calendar is thin on Wednesday, with only US New Home sales data for May. News about Middle East developments will continue driving markets. Euro PRICE Today The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Japanese Yen. USD EUR GBP JPY CAD AUD NZD CHF USD -0.01% -0.06% 0.25% 0.11% -0.13% -0.35% -0.05% EUR 0.00% -0.03% 0.25% 0.09% -0.15% -0.35% -0.05% GBP 0.06% 0.03% 0.26% 0.14% -0.10% -0.32% 0.01% JPY -0.25% -0.25% -0.26% -0.19% -0.36% -0.56% -0.27% CAD -0.11% -0.09% -0.14% 0.19% -0.17% -0.33% -0.13% AUD 0.13% 0.15% 0.10% 0.36% 0.17% -0.27% 0.11% NZD 0.35% 0.35% 0.32% 0.56% 0.33% 0.27% 0.33% CHF 0.05% 0.05% -0.01% 0.27% 0.13% -0.11% -0.33% 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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily digest market movers: Risk appetite and hopes of Fed cuts keep the USD on the defensiveThe Euro (EUR) is being buoyed by the US Dollar's weakness. The US Dollar Index (DXY), which measures the value of the Greenback against six major currencies, remains depressed near three-year lows, at 97.60, weighed by the positive risk sentiment triggered by the frail peace agreement in the Middle East and higher hopes that the Fed will be forced to cut interest rates, probably in September.The ceasefire between Israel and Iran announced by US President Trump on Monday seems very fragile but is holding, at least for now. This is feeding a moderate risk appetite on Wednesday, keeping the Euro buoyed, and weighing on demand for safe-haven assets like the US Dollar.Reports from US intelligence, however, are casting doubt on the durability of the truce. According to a preliminary assessment, the US bombing on Iran's nuclear sites might have set back their program by only one or two months, rather than "obliterated" it as Trump affirmed following the strikes. It is hard to assure that this new context guarantees a long-lasting peace.On the macroeconomic front, Eurozone data revealed on Tuesday that the German IFO Business Climate Index increased to 88.4 in June from 87.5 in May, slightly above the 88.3 expected. Business Expectations index also improved, to 90.7 from the previous 88.9, beating expectations of a 90.0 reading. The impact on the Euro, however, was marginal.In the US, the Conference Board's Consumer Confidence deteriorated against expectations in June, with the index falling to 93.0 from 98.4 (upwardly revised from 98.0) in May, instead of the increase to the 100.00 level forecasted by market analysts. The poll revealed a deterioration in both the current situation assessment and economic perspectives, due to heightened concerns about job availability, according to the report.These figures did not affect the Fed Chairman Powell's cautious stance on monetary policy, who reiterated that the central bank is "well positioned to wait" as, he said, price rises due to higher tariffs are expected to increase inflationary pressures and weigh on economic activity.Investors, however, are keeping their bets on further Fed rate cuts over the coming months. Data from the CME Group's Fed Watch shows an 18% chance of a rate cut in July and 85% in September, up from 14% and 65% respectively, in the previous week.EUR/USD remains positive with 1.1630 capping bulls for now
EUR/USD resumed its broader bullish trend after breaching the top of the last few weeks' corrective channel, boosted by investors' optimism following Trump's announcement of a ceasefire in the Middle East conflict.
Immediate resistance is at the June 12 high, at 1.1630, but the break of the trendline resistance at 1.1540 highlights a bullish flag formation with a measured target at the 1.1700 area. This coincides with the 127.2% Fibonacci extension of the June 10-12 rally.
On the downside, a bearish reaction from current levels might seek support at the broken trendline, now around the 1.1535 previous resistance area. A pullback to retest that level is not discarded. A confirmation below that level would cancel the bullish view and bring the Thursday and Monday lows at 1.1445 back into focus. Central banks FAQs What does a central bank do? Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%. What does a central bank do when inflation undershoots or overshoots its projected target? A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing. Who decides on monetary policy and interest rates? A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%. Is there a president or head of a central bank? Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.
Oil prices have ticked up from Tuesday's lows butt remain well below the highs seen last week. Iran's Oil and Natural Gas facilities seem to have been little affected by the bombings, and Oil traffic through the strategic Strait of Hormuz does not seem under threat, at least for now. The relatively low Crude prices are an additional support to the Euro (EUR) as they ease inflationary pressures on the Eurozone economy.
In the US, on Tuesday, the Federal Reserve (Fed) Chairman Jerome Powell reiterated that the central bank is in no rush to cut interest rates at the Semiannual Monetary Policy Report to Congress. Pressure from US President Donald Trump and the growing dissension among Fed officials does not seem to have scratched Powell's hawkish stance.
The market, however, keeps betting on a rate cut in September, especially after the downbeat Consumer Confidence reading released on Tuesday. Increasing concerns about employment are limiting US consumers' purchasing decisions and increasing pressure on the central bank to adopt a less restrictive monetary policy.
Powell will testify again on Wednesday, but he is unlikely to change his views. The economic calendar is thin on Wednesday, with only US New Home sales data for May. News about Middle East developments will continue driving markets. Euro PRICE Today The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Japanese Yen. USD EUR GBP JPY CAD AUD NZD CHF USD -0.01% -0.06% 0.25% 0.11% -0.13% -0.35% -0.05% EUR 0.00% -0.03% 0.25% 0.09% -0.15% -0.35% -0.05% GBP 0.06% 0.03% 0.26% 0.14% -0.10% -0.32% 0.01% JPY -0.25% -0.25% -0.26% -0.19% -0.36% -0.56% -0.27% CAD -0.11% -0.09% -0.14% 0.19% -0.17% -0.33% -0.13% AUD 0.13% 0.15% 0.10% 0.36% 0.17% -0.27% 0.11% NZD 0.35% 0.35% 0.32% 0.56% 0.33% 0.27% 0.33% CHF 0.05% 0.05% -0.01% 0.27% 0.13% -0.11% -0.33% 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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily digest market movers: Risk appetite and hopes of Fed cuts keep the USD on the defensiveThe Euro (EUR) is being buoyed by the US Dollar's weakness. The US Dollar Index (DXY), which measures the value of the Greenback against six major currencies, remains depressed near three-year lows, at 97.60, weighed by the positive risk sentiment triggered by the frail peace agreement in the Middle East and higher hopes that the Fed will be forced to cut interest rates, probably in September.The ceasefire between Israel and Iran announced by US President Trump on Monday seems very fragile but is holding, at least for now. This is feeding a moderate risk appetite on Wednesday, keeping the Euro buoyed, and weighing on demand for safe-haven assets like the US Dollar.Reports from US intelligence, however, are casting doubt on the durability of the truce. According to a preliminary assessment, the US bombing on Iran's nuclear sites might have set back their program by only one or two months, rather than "obliterated" it as Trump affirmed following the strikes. It is hard to assure that this new context guarantees a long-lasting peace.On the macroeconomic front, Eurozone data revealed on Tuesday that the German IFO Business Climate Index increased to 88.4 in June from 87.5 in May, slightly above the 88.3 expected. Business Expectations index also improved, to 90.7 from the previous 88.9, beating expectations of a 90.0 reading. The impact on the Euro, however, was marginal.In the US, the Conference Board's Consumer Confidence deteriorated against expectations in June, with the index falling to 93.0 from 98.4 (upwardly revised from 98.0) in May, instead of the increase to the 100.00 level forecasted by market analysts. The poll revealed a deterioration in both the current situation assessment and economic perspectives, due to heightened concerns about job availability, according to the report.These figures did not affect the Fed Chairman Powell's cautious stance on monetary policy, who reiterated that the central bank is "well positioned to wait" as, he said, price rises due to higher tariffs are expected to increase inflationary pressures and weigh on economic activity.Investors, however, are keeping their bets on further Fed rate cuts over the coming months. Data from the CME Group's Fed Watch shows an 18% chance of a rate cut in July and 85% in September, up from 14% and 65% respectively, in the previous week.EUR/USD remains positive with 1.1630 capping bulls for now
EUR/USD resumed its broader bullish trend after breaching the top of the last few weeks' corrective channel, boosted by investors' optimism following Trump's announcement of a ceasefire in the Middle East conflict.
Immediate resistance is at the June 12 high, at 1.1630, but the break of the trendline resistance at 1.1540 highlights a bullish flag formation with a measured target at the 1.1700 area. This coincides with the 127.2% Fibonacci extension of the June 10-12 rally.
On the downside, a bearish reaction from current levels might seek support at the broken trendline, now around the 1.1535 previous resistance area. A pullback to retest that level is not discarded. A confirmation below that level would cancel the bullish view and bring the Thursday and Monday lows at 1.1445 back into focus. Central banks FAQs What does a central bank do? Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%. What does a central bank do when inflation undershoots or overshoots its projected target? A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing. Who decides on monetary policy and interest rates? A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%. Is there a president or head of a central bank? Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.
11:09 Silver Price Forecast: XAG/USD is hovering above a key support at $35.50
Silver (XAG/USD) keeps trading back and forth without a clear bias, with technical indicators pointing to an increasing bearish momentum, and a key support area at $35.50, at a short distance.
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Markets maintain the positive inertia from the fragile ceasefire in the Middle East. A moderate risk appetite keeps weighing on safe-haven assets, such as precious metals, with a broad-based US Dollar weakness keeping the pair from a deeper correction, at least for now.
Technical Analysis: XAG/USD remains supported by the neckline of a H&S formation
From a technical perspective, four-hour charts show a trend of lower highs and lower lows from Monday’s top, at $36.40, with the Relative Strength Index (RSI) treading lower, well within bearish levels.
The Doji candles on the daily chart indicate a hesitant market, and recent price action highlights a potential Head & Shoulders pattern, a common sign of an impending trend shift.
A break below the H&S neckline, at $35.50, would increase pressure towards $34.10 (June 4 low). The measured target of the H&S pattern is at $33.43.
On the upside, immediate resistance is at the mentioned $36.40 (June 23 high) ahead of the June 19 high at $36.82. Silver FAQs Why do people invest in Silver? Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets. Which factors influence Silver prices? Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices. How does industrial demand affect Silver prices? Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices. How do Silver prices react to Gold’s moves? Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
The Doji candles on the daily chart indicate a hesitant market, and recent price action highlights a potential Head & Shoulders pattern, a common sign of an impending trend shift.
A break below the H&S neckline, at $35.50, would increase pressure towards $34.10 (June 4 low). The measured target of the H&S pattern is at $33.43.
On the upside, immediate resistance is at the mentioned $36.40 (June 23 high) ahead of the June 19 high at $36.82. Silver FAQs Why do people invest in Silver? Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets. Which factors influence Silver prices? Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices. How does industrial demand affect Silver prices? Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices. How do Silver prices react to Gold’s moves? Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
11:08 NZD/USD rises above 0.6000 as US Dollar remains subdued due to dampened safe-haven demand
NZD/USD extends its winning streak for the third successive session, trading around 0.6030 during the early European hours on Wednesday. The pair remains stronger following the trade balance data, released by Statistics New Zealand.
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The pair remains stronger following the trade balance data, released by Statistics New Zealand.New Zealand’s trade surplus came in at NZD1,235 million in May month-over-month in May, surpassing the market expectations of NZD1,060 million but lower than the previous NZD1,285 million (revised from NZD1,426 million). Exports rose to NZD7.7 billion, while Imports rose to NZD6.4 billion.The NZD/USD pair receives support as the US Dollar (USD) faces challenges amid improving risk appetite, driven by easing tensions in the Middle East. US President Donald Trump announced that a ceasefire between Iran and Israel had taken effect, raising hopes for an end to the 12-day conflict.However, caution lingered amid uncertainty over the ceasefire’s durability. A US intelligence report indicated that US strikes on Iranian nuclear sites have set back Tehran's program by only a matter of months, per Reuters. Additionally, Iranian Foreign Minister Abbas Araghchi said that the country's nuclear program continues, per the local news agency Al Arabiya.Fed Chair Powell stated during his testimony before the congressional budget committee on Tuesday that rate cuts could be delayed until sometime in the fourth quarter. Powell added, “When the time is right, expect rate cuts to continue.” He also said that data suggests that at least some of the tariffs will hit consumers and will start to see more tariff inflation starting in June. New Zealand Dollar FAQs What key factors drive the New Zealand Dollar? The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD. How do decisions of the RBNZ impact the New Zealand Dollar? The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair. How does economic data influence the value of the New Zealand Dollar? Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate. How does broader risk sentiment impact the New Zealand Dollar? The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
11:00 Switzerland ZEW Survey – Expectations increased to -2.1 in June from previous -22
Switzerland ZEW Survey – Expectations increased to -2.1 in June from previous -22
10:55 Forex Today: US Dollar stabilizes ahead of housing data, Powell's second day of testimony
Here is what you need to know on Wednesday, June 25:
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Here is what you need to know on Wednesday, June 25:Financial markets remain relatively quiet early Wednesday following the volatile action seen on Tuesday. In the second half of the day, New Home Sales data for May will be featured in the US economic calendar. Additionally, Federal Reserve (Fed) Chairman Jerome Powell will speak before the Senate Banking Committee in the second day of his testimony. US Dollar PRICE This week The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the British Pound. USD EUR GBP JPY CAD AUD NZD CHF USD -1.20% -1.55% -0.97% -0.21% -1.05% -1.26% -1.50% EUR 1.20% -0.38% 0.30% 1.01% 0.11% -0.05% -0.34% GBP 1.55% 0.38% 0.69% 1.39% 0.49% 0.33% 0.03% JPY 0.97% -0.30% -0.69% 0.75% -0.11% -0.23% -0.62% CAD 0.21% -1.01% -1.39% -0.75% -0.80% -1.05% -1.35% AUD 1.05% -0.11% -0.49% 0.11% 0.80% -0.18% -0.45% NZD 1.26% 0.05% -0.33% 0.23% 1.05% 0.18% -0.29% CHF 1.50% 0.34% -0.03% 0.62% 1.35% 0.45% 0.29% 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).
News of Iran and Israel accepting a ceasefire triggered a risk rally on Tuesday and caused the US Dollar (USD) to weaken. During the American trading hours, comments from Chairman Powell helped the USD limit its losses. Powell reiterated that they are not in a rush to cut the policy rate, adding that they need more time to confirm that inflation pressures caused by tariffs will remain contained. After ending the day marginally lower, the USD Index fluctuates in a tight channel at around 98.00 in the European morning on Wednesday.Meanwhile, US stock index futures trade little changed after Wall Street's main indexes capitalized on risk flows to post strong gains on Tuesday. EUR/USD rose about only 0.3% on Tuesday as it lost its bullish momentum in the second half of the day. The pair stays in a consolidation phase and moves sideways at around 1.1600 early Wednesday.GBP/USD extended its rally and touched its highest level in over three years near 1.3650 on Tuesday. Following a short-lasting technical correction, the pair holds steady above 1.3600 in the European morning on Wednesday. While testifying before the Lords Economic Affairs Committee on Tuesday, Bank of England (BoE) Governor Andrew Bailey noted that they are starting to see a softening in the labor market.USD/JPY dropped to 144.50 and lost nearly 1% on Tuesday. The pair stages a rebound on Wednesday and trades above 145.00. Gold dropped below $3,300 for the first time in two weeks on Tuesday, pressured by easing geopolitical tensions. XAU/USD corrects higher on Wednesday and trades at around $3,330.USD/CAD fell below 1.3700 on Tuesday but managed to recover from daily lows to close virtually unchanged. The pair moves sideways near 1.3730 in the European session. Inflation in Canada, as measured by the change in the Consumer Price Index (CPI), remained unchanged at 1.7% on a yearly basis in May, Statistics Canada reported on Tuesday. Risk sentiment FAQs What do the terms"risk-on" and "risk-off" mean when referring to sentiment in financial markets? In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest. What are the key assets to track to understand risk sentiment dynamics? Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit. Which currencies strengthen when sentiment is "risk-on"? The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity. Which currencies strengthen when sentiment is "risk-off"? The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
10:39 GBP/JPY nears YTD highs above 198.00 amid a moderate risk appetite
The Pound resumed its positive trend as the safe-haven Yen struggles in risk-on marketsA divided BoJ committee puts further rate hikes into question and adds bearish pressure on the Yen,GBP/JPY has rallied 1.6% over the last five days, nearing the YTD highs at 198.20 and 198.25.
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A divided BoJ committee puts further rate hikes into question and adds bearish pressure on the Yen,
GBP/JPY has rallied 1.6% over the last five days, nearing the YTD highs at 198.20 and 198.25.
The Pound has reversed Tuesday’s pullback and resumed its broader bullish trend on Wednesday, fuelled by the ongoing risk appetite. The Yen is trading lower across the board in the aftermath of the ceasefire in the Middle East, with the Bank of Japan divided about further monetary tighteningA fragile peace between Iran and Israel holds for the second day, which keeps investors' mood positive. The US intelligence, however, reported that the attacks might have only delayed Tehran’s nuclear program by months, which casts doubts about a durable peaceA divided BoJ puts further rate hikes into questionIn Japan, macroeconomic data have beaten expectations, with the Leading Economic Index improving against expectations. On the other hand, however, the divergence within BoJ officials regarding the ban’s monetary policy is acting as a headwind for the JPY.
The Summary of Opinions from the Bank of Japan's last week’s meeting revealed that the committee is divided about its tightening cycle. Part of the board is in favour of keeping rates on hold until the inflationary impact of Trump’s tariffs clarifies, with one member calling for decisive rate hikes even in the uncertain economic context.
This divergence puts the bank’s monetary policy normalisation cycle into question, adding pressure on the Yen, already weighed by investors’ appetite for risk. The pair has rallied about 1.6% in the last five trading days and is approaching year-to-date highs, at 198.20 and 198.25. Bank of Japan FAQs What is the Bank of Japan? The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%. What has been the Bank of Japan’s policy? The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance. How do Bank of Japan’s decisions influence the Japanese Yen? The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance. Why did the Bank of Japan decide to start unwinding its ultra-loose policy? A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move. at
A divided BoJ committee puts further rate hikes into question and adds bearish pressure on the Yen,
GBP/JPY has rallied 1.6% over the last five days, nearing the YTD highs at 198.20 and 198.25.
The Pound has reversed Tuesday’s pullback and resumed its broader bullish trend on Wednesday, fuelled by the ongoing risk appetite. The Yen is trading lower across the board in the aftermath of the ceasefire in the Middle East, with the Bank of Japan divided about further monetary tighteningA fragile peace between Iran and Israel holds for the second day, which keeps investors' mood positive. The US intelligence, however, reported that the attacks might have only delayed Tehran’s nuclear program by months, which casts doubts about a durable peaceA divided BoJ puts further rate hikes into questionIn Japan, macroeconomic data have beaten expectations, with the Leading Economic Index improving against expectations. On the other hand, however, the divergence within BoJ officials regarding the ban’s monetary policy is acting as a headwind for the JPY.
The Summary of Opinions from the Bank of Japan's last week’s meeting revealed that the committee is divided about its tightening cycle. Part of the board is in favour of keeping rates on hold until the inflationary impact of Trump’s tariffs clarifies, with one member calling for decisive rate hikes even in the uncertain economic context.
This divergence puts the bank’s monetary policy normalisation cycle into question, adding pressure on the Yen, already weighed by investors’ appetite for risk. The pair has rallied about 1.6% in the last five trading days and is approaching year-to-date highs, at 198.20 and 198.25. Bank of Japan FAQs What is the Bank of Japan? The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%. What has been the Bank of Japan’s policy? The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance. How do Bank of Japan’s decisions influence the Japanese Yen? The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance. Why did the Bank of Japan decide to start unwinding its ultra-loose policy? A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move. at
10:16 Pound Sterling holds onto gains against US Dollar driven by Israel-Iran truce
The Pound Sterling (GBP) trades firmly near a fresh three-year high around 1.3650 against the US Dollar (USD) during European trading hours on Wednesday.
.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}The Pound Sterling shows strength near 1.3650 against the US Dollar after the announcement of the Israel-Iran ceasefire.Fed’s Powell states that the central bank still needs time to assess the impact of tariffs on inflation.BoE’s Bailey expresses concerns over easing labor market strength.The Pound Sterling (GBP) trades firmly near a fresh three-year high around 1.3650 against the US Dollar (USD) during European trading hours on Wednesday. The GBP/USD pair strengthens as the US Dollar continues to underperform its peers, as its safe-haven demand has diminished significantly after the announcement of a ceasefire between Israel and Iran on Tuesday.During the European trading session, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, struggles to hold the weekly low around 98.00.On Tuesday, United States (US) President Donald Trump announced that a truce between Israel and Iran has become effective and urged them not to violate it. “The ceasefire is now in effect. Please do not violate it!" Trump wrote in a post on Truth Social.Meanwhile, the support for maintaining interest rates at their current levels by Federal Reserve (Fed) Chair Jerome Powell in his semi-annual testimony before the US House Financial Services Committee on Tuesday has failed to uplift the US Dollar.“I don’t think we need to be in any rush as long as economy is strong, and the uncertainty is high surrounding the still-unresolved tariff debate,” Powell said, Reuters reported. He guided that the central bank will closely monitor the “impact of tariffs on inflation during June and July” and expressed confidence that “interest rate cuts would come sooner if the central bank sees the tariff-driven inflation not as strong as expected."Daily digest market movers: Pound Sterling stabilizes while BoE’s Bailey warns of potential labor market risksThe Pound Sterling seems broadly stable against its major peers on Wednesday, even as Bank of England (BoE) Governor Andrew Bailey warned of downside risks to the United Kingdom’s (UK) labor market and reiterated a gradual downward interest rate path in his testimony before the Lords Economic Affairs Committee on Tuesday.“We [BoE] are starting to see labour market softening, and wage settlements are likely to come off," Bailey said. He added that the increase in employers’ contribution to social security schemes seems to be “affecting labour market”.Last week, Andrew Bailey also stated in the monetary policy announcement that the central bank will closely monitor upside inflation risks and downside labor market risks after leaving interest rates unchanged at 4.25%, with a 6-3 majority vote.Meanwhile, data from the latest employment surveys has also shown a slowdown in job vacancies. The recruitment platform Indeed showed that job vacancies were down 5% in mid-June compared to their level at the end of March, Reuters reported.This week, the GBP/USD pair will be influenced by the US Personal Consumption Expenditures Price Index (PCE) data for May, which will be released on Friday. The Fed’s preferred inflation gauge is expected to show that price pressures grew at a fast pace year-over-year. The core PCE inflation data – which excludes volatile food and energy prices – is estimated to have accelerated to 2.6% YoY from 2.5% in April.Technical Analysis: Pound Sterling stays above 20-day EMAThe Pound Sterling clings to gains near a fresh three-year high around 1.3650 against the US Dollar on Wednesday. The near-term trend of the GBP/USD pair remains bullish as the 20-day Exponential Moving Average (EMA) slopes higher around 1.3513.The 14-day Relative Strength Index (RSI) rebounds above 60.00. A fresh bullish momentum would emerge if the RSI holds above that level.Looking down, Monday's low at 1.3370 will act as a key support zone. On the upside, the January 13, 2022, high near 1.3750 will act as the key barrier. Pound Sterling FAQs What is the Pound Sterling? The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data.
Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE). How do the decisions of the Bank of England impact on the Pound Sterling? The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates.
When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money.
When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects. How does economic data influence the value of the Pound? Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP.
A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall. How does the Trade Balance impact the Pound? Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
10:13 WTI seems vulnerable above two-week low around $64 on Israel-Iran ceasefire
West Texas Intermediate (WTI), futures on NYMEX, appears vulnerable near the two-week low around $64.00. The Oil price seems to witness more downside as the announcement of a truce between Israel and Iran has eased global supply risks.
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The Oil price seems to witness more downside as the announcement of a truce between Israel and Iran has eased global supply risks.On Tuesday, United States (US) President Donald Trump announced a ceasefire between Israel and Iran and urged them not to violate. Following the ceasefire, Israeli Prime Minister Benjamin Netanyahu warned its defence forces will respond forcefully if Iran violates the truce.Apparently, the Israel-Iran truce eased fears of the closure of Strait of Hormuz, a passage from which almost a quarter of global Oil is supplied. The Oil price on the NYMEX rallied to near the $76 mark on Monday after Iran threatened to close the Strait of Hormuz.Another headwind for the Oil price is comments from Federal Reserve (Fed) Chair Jerome Powell in his semi-annual testimony before the United States (US) House Financial Services Committee on Tuesday, which signaled that he might not join other officials for supporting an interest rate cut in the July policy meeting.“We [Fed] are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance," Powell said. He guided that the central bank will closely monitor the impact of tariffs imposed by US President Donald Trump on inflation through the June and July data. Powell expressed confidence that interest rate cuts would come sooner if the central bank finds that the tariff-drive inflation is not strong enough.Theoretically, Fed’s stance of higher-for-longer interest rates bode poorly for the Oil price. WTI Oil FAQs What is WTI Oil? WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media. What factors drive the price of WTI Oil? Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa. How does inventory data impact the price of WTI Oil The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency. How does OPEC influence the price of WTI Oil? OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
10:00 Spain Gross Domestic Product (YoY) meets forecasts (2.8%) in 1Q
Spain Gross Domestic Product (YoY) meets forecasts (2.8%) in 1Q
10:00 AUD/JPY holds positive ground above 94.00 amid improved risk sentiment
The AUD/JPY pair attracts some buyers to around 94.30 during the early European session on Wednesday. The Japanese Yen (JPY) softens against the Euro (EUR) due to growing optimism that a ceasefire between Israel and Iran will hold after it was touted by US President Donald Trump.
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Receding safe-haven demand continues to weigh on the Japanese Yen. Australia’s monthly CPI rose by 2.1% YoY in May, softer than expected. The AUD/JPY pair attracts some buyers to around 94.30 during the early European session on Wednesday. The Japanese Yen (JPY) softens against the Euro (EUR) due to growing optimism that a ceasefire between Israel and Iran will hold after it was touted by US President Donald Trump. The Israel-Iran ceasefire went into force on Tuesday and seems to be holding for the time being, despite an Israeli attack on Tehran and an Iranian missile strike. The de-escalation of tensions in the Middle East could undermine the JPY and create a tailwind for the cross in the near term. However, Israeli Prime Minister Benjamin Netanyahu warned that Israel “will strike again” if Iran “thinks of rebuilding” its nuclear program. Any signs of renewed escalation could boost the safe-haven flows and benefit the JPY. Data released by the Australian Bureau of Statistics (ABS) on Wednesday showed that the country’s monthly Consumer Price Index (CPI) rose by 2.1% YoY in May versus 2.4% prior. This figure came in softer than the expectation of 2.3% growth in the reported period. Softer Australian CPI inflation and weaker Gross Domestic Product (GDP) reports reinforce expectations of the Reserve Bank of Australia’s (RBA) rate cut in July. This, in turn, might drag the Aussie lower against the JPY. Financial markets have priced in nearly an 80% chance of a 25 basis points (bps) rate cut by the RBA in the July meeting. Japanese Yen FAQs What key factors drive the Japanese Yen? The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors. How do the decisions of the Bank of Japan impact the Japanese Yen? One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen. How does the differential between Japanese and US bond yields impact the Japanese Yen? Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential. How does broader risk sentiment impact the Japanese Yen? The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
10:00 Spain Gross Domestic Product (QoQ) meets expectations (0.6%) in 1Q
Spain Gross Domestic Product (QoQ) meets expectations (0.6%) in 1Q
09:45 France Consumer Confidence registered at 88, below expectations (89) in June
France Consumer Confidence registered at 88, below expectations (89) in June
09:13 Crude Oil price today: WTI price bullish at European opening
West Texas Intermediate (WTI) Oil price advances on Wednesday, early in the European session. WTI trades at $65.09 per barrel, up from Tuesday’s close at $64.72.
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West Texas Intermediate (WTI) Oil price advances on Wednesday, early in the European session. WTI trades at $65.09 per barrel, up from Tuesday’s close at $64.72.Brent Oil Exchange Rate (Brent crude) is also up, advancing from the $66.87 price posted on Tuesday, and trading at $67.23. WTI Oil FAQs What is WTI Oil? WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media. What factors drive the price of WTI Oil? Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa. How does inventory data impact the price of WTI Oil The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency. How does OPEC influence the price of WTI Oil? OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
09:01 US Dollar Index Price Forecast: Bearish bias remains unchanged near 98.00
The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, extends the decline to near 97.90 during the early European session on Wednesday.
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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.
08:52 EUR/GBP appreciates to near 0.8550, upside seems limited due to dovish ECB's tone
EUR/GBP edges higher after registering losses in the previous session, trading around 0.8530 during the Asian hours on Wednesday. However, the currency cross faced challenges as the Euro (EUR) lost ground following the dovish remarks from the European Central Bank’s (ECB) officials.
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If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation. How do interest rates impact currencies? Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money. How do interest rates influence the price of Gold? Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank.
If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold. What is the Fed Funds rate? The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure.
Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.
08:51 FX option expiries for Jun 25 NY cut
FX option expiries for Jun 25 NY cut at 10:00 Eastern Time vi a DTCC can be found below.
FX option expiries for Jun 25 NY cut at 10:00 Eastern Time vi a DTCC can be found below.EUR/USD: EUR amounts1.1400 1.7b1.1475 1.2b1.1495 3.1b1.1500 1.9b1.1625 914m1.1650 1.7b1.1710 3bGBP/USD: GBP amounts1.3400 1.1bUSD/JPY: USD amounts 144.00 1b144.20 1.1b144.50 2.2b145.00 1.2b146.00 1b148.00 1.9bUSD/CHF: USD amounts 0.8250 822mAUD/USD: AUD amounts0.6300 577m0.6590 626mUSD/CAD: USD amounts 1.3540 650m1.3785 439m
08:22 BoJ's Tamura: Upside risks to price outlook are heightening
The Bank of Japan (BoJ) board member Naoki Tamura said on Wednesday that inflation rose more than expected back in May and it is difficult to predict the outlook. Tamura added that the Japanese central bank may need to act decisively if upside price risks heighten further.
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The Bank of Japan (BoJ) board member Naoki Tamura said on Wednesday that inflation rose more than expected back in May and it is difficult to predict the outlook. Tamura added that the Japanese central bank may need to act decisively if upside price risks heighten further.Key quotes Inflation accelerating more than I expected back in May.
The fog surrounding US tariffs is clearing somewhat.
But it is still hard to predict the outlook.
BoJ may need to act decisively if upside price risks heighten further.Market reaction At the press time, the USD/JPY pair is up 0.10% on the day to trade at 145.10. Bank of Japan FAQs What is the Bank of Japan? The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%. What has been the Bank of Japan’s policy? The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance. How do Bank of Japan’s decisions influence the Japanese Yen? The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance. Why did the Bank of Japan decide to start unwinding its ultra-loose policy? A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
The fog surrounding US tariffs is clearing somewhat.
But it is still hard to predict the outlook.
BoJ may need to act decisively if upside price risks heighten further.Market reaction At the press time, the USD/JPY pair is up 0.10% on the day to trade at 145.10. Bank of Japan FAQs What is the Bank of Japan? The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%. What has been the Bank of Japan’s policy? The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance. How do Bank of Japan’s decisions influence the Japanese Yen? The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance. Why did the Bank of Japan decide to start unwinding its ultra-loose policy? A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
08:18 USD/CAD Price Forecast: Bulls have the upper hand while above 100-period SMA on H4, near 1.3675
The USD/CAD pair builds on the previous day's bounce from the 1.3680-1.3675 area, or the weekly low, and gains some positive traction during the Asian session on Wednesday.
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The USD/CAD pair builds on the previous day's bounce from the 1.3680-1.3675 area, or the weekly low, and gains some positive traction during the Asian session on Wednesday. Spot prices climb to a fresh daily high, around the 1.3730-1.3735 region in the last hour as bearish Crude Oil prices undermine the commodity-linked Loonie, through a softer US Dollar (USD) caps gain.From a technical perspective, this week's retracement slide from the 1.3800 neighborhood, or the monthly top, stalled on Tuesday near the 100-period Simple Moving Average (SMA) on the 4-hour chart. The subsequent move up, along with the recent breakthrough a short-term descending trend-line resistance, favors bullish traders, though mixed oscillators on hourly and daily charts warrant some caution. Hence, any further strength is likely to confront a stiff barrier near the 1.3775 region, or the 200-period SMA on the 4-hour chart. The latter is followed by the monthly high, around the 1.3800 mark, which if conquered would set the stage for a further near-term appreciating move and lift the USD/CAD pair to the 1.3835-1.3840 zone en route to the 1.3860 region (May 29 peak) and the 1.3900 round- figure mark.On the flip side, the 1.3700 mark could offer immediate support ahead of the 1.3680-1.3675 region (100-period SMA on the 4-hour chart). A convincing break below the latter could drag the USD/CAD pair to the descending trend-line hurdle breakpoint, now turned support, currently around the 1.3615 area. Some follow-through selling below the 1.3600 mark would shift the near-term bias in favor of bears.USD/CAD 4-hour chart Canadian Dollar FAQs What key factors drive the Canadian Dollar? The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar. How do the decisions of the Bank of Canada impact the Canadian Dollar? The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive. How does the price of Oil impact the Canadian Dollar? The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD. How does inflation data impact the value of the Canadian Dollar? While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar. How does economic data influence the value of the Canadian Dollar? Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
08:09 USD/CNH Price Analysis: Hovers around 7.1700 near rectangle’s lower boundary
The USD/CNH pair halts its four-day winning streak, trading around 7.1690 during the Asian hours on Wednesday. An analysis of the daily chart indicates that the pair moves sideways within a rectangular pattern, which points to a consolidation phase.
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An analysis of the daily chart indicates that the pair moves sideways within a rectangular pattern, which points to a consolidation phase.However, the 14-day Relative Strength Index (RSI), a key momentum indicator, remains below the 50 level, suggesting a bearish momentum is in play. Additionally, the USD/CNH pair trades below the nine-day Exponential Moving Average (EMA), further suggesting weaker short-term price momentum.On the downside, the USD/CNH pair hovers around the lower boundary of the rectangle around 168.80. A break below this level could confirm the ongoing bearish bias and put the downward pressure on the pair to retest the seven-month low at 7.1603, which was recorded on June 25.The nine-day EMA at 7.1781 appears as the initial barrier. A successful breach above this level would improve the short-term price momentum and support the pair to explore the region around the 50-day EMA at 7.2102, followed by the rectangle’s upper boundary around 7.2150. Further resistance appears at the monthly high of 7.2240, reached on June 2.USD/CNH: Daily Chart Central banks FAQs What does a central bank do? Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%. What does a central bank do when inflation undershoots or overshoots its projected target? A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing. Who decides on monetary policy and interest rates? A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%. Is there a president or head of a central bank? Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.
08:08 USD/CHF refreshes over-a-decade low near 0.8030 on USD’s continued underperformance
The USD/CHF pair posts a fresh over-a-decade low near 0.8034 during Asian trading hours on Wednesday. The Swiss Franc pair faces a sharp selling pressure as the US Dollar (USD) continues to underperform its peers after a ceasefire between Israel and Iran.
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.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}USD/CHF slides to near 0.8035 as the US Dollar continues to decline after Israel-Iran ceasefire.Fed’s Powell stated that the central bank needs time to learn the impact of tariffs on inflation and growth.The SNB pushed interest rates to zero in the monetary policy announcement last week.The USD/CHF pair posts a fresh over-a-decade low near 0.8034 during Asian trading hours on Wednesday. The Swiss Franc pair faces a sharp selling pressure as the US Dollar (USD) continues to underperform its peers after a ceasefire between Israel and Iran.The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, seems vulnerable near the weekly low around 98.00. US Dollar PRICE Today The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar. USD EUR GBP JPY CAD AUD NZD CHF USD -0.02% 0.00% 0.07% 0.15% -0.05% -0.37% -0.03% EUR 0.02% 0.05% 0.10% 0.15% -0.06% -0.35% -0.01% GBP -0.00% -0.05% 0.06% 0.12% -0.08% -0.40% -0.03% JPY -0.07% -0.10% -0.06% 0.01% -0.12% -0.42% -0.08% CAD -0.15% -0.15% -0.12% -0.01% -0.14% -0.39% -0.15% AUD 0.05% 0.06% 0.08% 0.12% 0.14% -0.37% 0.05% NZD 0.37% 0.35% 0.40% 0.42% 0.39% 0.37% 0.37% CHF 0.03% 0.00% 0.03% 0.08% 0.15% -0.05% -0.37% 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 ceasefire agreement between Israel and Iran has diminished the safe-haven demand of the US Dollar. On Monday, the US Dollar gained sharply after the United States (US) joined Israel’s assault on Iran and destroyed three nuclear sites of Tehran.On the monetary policy front, Federal Reserve (Fed) Chair Jerome Powell has reiterated that monetary policy adjustments are not appropriate at the current time as the labor market is still solid and the central bank needs more time to assess the impact of the tariff policy on inflation. Swiss Franc FAQs What key factors drive the Swiss Franc? The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone. Why is the Swiss Franc considered a safe-haven currency? The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in. How do decisions of the Swiss National Bank impact the Swiss Franc? The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF. How does economic data influence the value of the Swiss Franc? Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate. How does the Eurozone monetary policy affect the Swiss Franc? As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
08:02 Gold price struggles to lure buyers as easing Middle East tensions offsets weaker USD
Gold price (XAU/USD) is trading higher during the Asian session on Wednesday and looking to build on the previous day's modest bounce from sub-$3,300 levels, or over a two-week low.
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Federal Reserve (Fed) Chair Jerome Powell maintained his wait-and-see rate policy, though he said that lower inflation and weaker labor hiring could lead to an earlier rate cut. This comes on top of similar comments from Fed officials in recent days and keeps the door open for a potential rate reduction as soon as next month. The resultant fall in the US Treasury bond yields keeps the US Dollar (USD) depressed near a one-week low and lends some support to the non-yielding yellow metal.The XAU/USD pair, for now, seems to have snapped a two-day losing streak, though the uptick lacks bullish conviction as the Israel-Iran ceasefire optimism acts as a headwind for traditional safe-haven assets. However, an Israeli attack on Tehran and an Iranian missile strike raised doubts over the durability of the truce. This keeps geopolitical risk in play, which, along with the supportive fundamental backdrop, supports prospects for a further appreciating move for the Gold price. Traders now look to Fed Chair Jerome Powell's second day of congressional testimony for some impetus ahead of other important US macro releases scheduled during the latter half of the week. Daily Digest Market Movers: Gold price draws support from a weaker USD, though it lacks bullish convictionFederal Reserve Chair Jerome Powell, in his prepared remarks for the Semiannual Monetary Policy Report to Congress, said that inflation could start rising soon on the back of higher tariffs and that the central bank was in no rush to ease borrowing costs. Powell added that many paths are possible for monetary policy and that lower inflation and weaker labor hiring could lead to an earlier rate cut. Traders now seem to have fully priced in at least 50 basis points of Fed rate reductions by year-end and also see a roughly 20% probability of a rate cut at the July meeting. The US Dollar (USD) languishes near a one-week low touched on Tuesday on the back of dovish Fed expectations and supports the non-yielding Gold price on Wednesday following the previous day's slide to over a two-week low.US President Donald Trump criticized both Israel and Iran for breaching a complete ceasefire deal shortly after announcing it. Moreover, media reports stated that recent US airstrikes on Iran’s nuclear facilities likely did not destroy the core components, but merely delayed Tehran’s program by a few months. Trump, however, reiterated that Iran’s nuclear sites were completely destroyed.Nevertheless, the ceasefire between Israel and Iran appears to be holding for now, with both sides claiming victory in the war and warning they were ready to renew hostilities if the other attacks. This keeps the geopolitical risk premium in play and should continue to offer support to the safe-haven Gold price ahead of important US macro releases scheduled during the latter half of the week. The final Q1 GDP print, along with Durable Goods Orders and the usual Weekly Initial Jobless Claims data, will be published on Thursday. The focus, however, will remain glued to the US Personal Consumption Expenditures (PCE) Price Index on Friday, which will play a key role in influencing market expectations about the Fed's rate-cut path. This, in turn, will drive the USD and the XAU/USD pair. Gold price could attract fresh sellers at higher levels; ascending trend-channel breakdown remains in playFrom a technical perspective, the overnight downfall confirmed a breakdown through a short-term ascending channel and favored bearish traders. Moreover, oscillators on daily/4-hour charts have started gaining negative traction and suggest that the path of least resistance for the Gold price is to the downside. Hence, any subsequent move up could be seen as a selling opportunity and remain capped near the trend-channel support breakpoint, around the $3,368-3,370 region. A sustained strength beyond, however, could allow the commodity to reclaim the $3,400 round figure. On the flip side, bearish traders might now await acceptance below the $3,300 mark before placing fresh bets and positioning for a fall toward the $3,245 region. The downward trajectory could extend further and eventually drag the Gold price to the $3,210-$3,200 horizontal support en route to the $3,175 area. Gold FAQs Why do people invest in Gold? 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. Who buys the most Gold? 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. How is Gold correlated with other assets? 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. What does the price of Gold depend on? 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.
08:02 Japan Leading Economic Index above expectations (103.4) in April: Actual (104.2)
Japan Leading Economic Index above expectations (103.4) in April: Actual (104.2)
08:01 Japan Coincident Index increased to 116 in April from previous 115.5
Japan Coincident Index increased to 116 in April from previous 115.5
07:56 EUR/USD strengthens above 1.1600 on risk-on mood
The EUR/USD pair edges higher to around 1.1615 during the early European session on Wednesday. The improved risk sentiment provides some support to the Euro (EUR) against the Greenback. Traders will take more cues from the Federal Reserve’s (Fed) Chair Jerome Powell testifies later on Wednesday.
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EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%). What is the ECB and how does it impact the Euro? The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy.
The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa.
The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde. How does inflation data impact the value of the Euro? Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control.
Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money. How does economic data influence the value of the Euro? Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency.
A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall.
Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy. How does the Trade Balance impact the Euro? Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
07:41 India Gold price today: Gold rises, according to FXStreet data
Gold prices remained broadly unchanged in India on Wednesday, according to data compiled by FXStreet.
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Gold prices remained broadly unchanged in India on Wednesday, according to data compiled by FXStreet.
The price for Gold stood at 9,194.51 Indian Rupees (INR) per gram, broadly stable compared with the INR 9,185.40 it cost on Tuesday.
The price for Gold was broadly steady at INR 107,242.90 per tola from INR 107,136.70 per tola a day earlier. Unit measure Gold Price in INR 1 Gram 9,194.51 10 Grams 91,945.05 Tola 107,242.90 Troy Ounce 285,980.00
2025 Gold Forecast Guide [PDF] Download your free copy of the 2025 Gold Forecast
Daily digest market movers: Gold price pulls back amid weak US Dollar, falling US yields
Gold prices suffered substantial losses as the markets cheered a ceasefire between Israel and Iran. US President Donald Trump posted on his social network that "Both Israel and Iran wanted to stop the War, equally! It was my great honor to Destroy All Nuclear facilities & capabilities, and then, STOP THE WAR!"
Bullion failed to print gains despite the decline in US Treasury bond yields and the US Dollar. The US 10-year Treasury note is yielding 4.30%, falling four basis points (bps). The US Dollar Index (DXY), which tracks the performance of the Buck’s value against a basket of six peers, is also down 0.56% at 97.79.
The CB revealed that Consumer Confidence in June came at 93.0, down from 98.0 a month ago and also missed forecasts of 100. “The decline was broad-based across components, with consumers' assessments of the present situation and their expectations for the future both contributing to the deterioration,” said Stephanie Guichard, senior economist for global indicators at the Conference Board.
Further Fed speakers crossed the wires. Cleveland Fed President Beth Hammack said that she sees rates “on hold for quite some time,” even though the latest inflation readings are encouraging. New York Fed John Williams commented that tariffs will boost inflation to 3% this year and expects inflation to reach the 2% goal in 2026. Furthermore, it was added that the economy will grow at a slower pace, though it will not be tipped into a recession.
On Monday, US Flash PMIs remained in expansionary territory, suggesting that the economy remains solid. Next week, traders will be watching the release of the Institute for Supply Management (ISM) figures for June.
Money markets suggest that traders are pricing in 58 basis points of easing toward the end of the year, according to Prime Market Terminal data. FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Why do people invest in Gold?
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. Who buys the most Gold?
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. How is Gold correlated with other assets?
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. What does the price of Gold depend on?
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. (An automation tool was used in creating this post.)
07:32 USD/INR sees more downside as lower Oil prices strengthen Indian Rupee
The Indian Rupee (INR) opens firmly near the weekly high around 85.95 against the US Dollar (USD) on Wednesday.
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The USD/INR pair struggles to gain ground as the Indian currency strengthens on expectations that the Oil price could decline further, following confidence that both Israel and Iran will not violate the ceasefire agreement.During the Asian trading session, the West Texas Intermediate (WTI) Oil price seems fragile near an almost two-week low around $64.00.Lower Oil price bodes well for currencies from nations that rely heavily on Oil imports to fulfil their energy needs, such as the Indian Rupee.On Tuesday, United States (US) President Donald Trump stated in a post on Truth.Social that a truce between Israel and Iran has become effective and urged them not to violate. “The ceasefire is now in effect. Please do not violate it!" Trump wrote.Meanwhile, the Indian equity market has extended their gains on lower Oil prices and improving investors’ risk appetite amid easing geopolitical tensions in the Middle East. Nifty50 opens almost 100 points higher around 25,150, and Sensex30 jumps 0.83% above 82,400. On Tuesday, Foreign Institutional Investors (FIIs) sold equity worth Rs. 5,266.01 crores.Daily digest market movers: USD/INR weakens as US Dollar underperformsThe downside bias towards the USD/INR pair is also driven by weakness in the US Dollar as easing geopolitical tensions have forced traders to pare bets in safe-haven assets. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, appears fragile near the weekly low around 98.00.The US currency struggles to gain ground even though Federal Reserve (Fed) Chair Jerome Powell has signaled in the semi-annual testimony before the US House Financial Services Committee on Tuesday that he will not endorse interest rate cuts in the July policy meeting.Powell stated the central bank needs more time to “assess the impact of still-unresolved tariff rates on inflation and growth”. He guided that the “impact of the new trade policy will be reflected in the June and July data”.Jerome Powell didn’t rule out the scenario that the impact of new international policies could be “one-time” on inflation. He stated that the central bank will “bring interest rates down sooner if officials find price pressures well contained”.Contrary to Jerome Powell’s ‘wait-and-see’ approach, Fed officials: Vice Chair Michelle Bowman, Governor Christopher Waller, and Chicago Fed President Austan Goolsbee have expressed confidence that the impact of tariffs on inflation will be limited and have warned of growing downside risks to the labor market. Fed officials Waller and Bowman also expressed the need to reduce interest rates as soon as July to avoid further cracks in the job market.Going forward, investors will focus on New Home Sales data for May, which will be published at 14:00 GMT. Economists expect households to have bought 0.7 million homes, slightly lower than 0.743 million in April. Investors will closely monitor the housing data as the latest studies showed that households postponed new home demand due to higher mortgage rates and uncertainty over Trump’s tariff policy.Technical Analysis: USD/INR seems vulnerable around 20-day EMAThe USD/INR pair struggles to hold the 20-day Exponential Moving Average (EMA) around 86.00, suggesting that the near-term trend has become uncertain.The 14-day Relative Strength Index (RSI) slides vertically below 50.00 after remaining above 60.00 in past few trading days, indicating a strong bearish reversal.Looking down, the June 12 high at 85.70 will act as key support for the major. On the upside, the June 24 high of 86.60 will be a critical hurdle for the pair. Indian Rupee FAQs What are the key factors driving the Indian Rupee? The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee. How do the decisions of the Reserve Bank of India impact the Indian Rupee? The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference. What macroeconomic factors influence the value of the Indian Rupee? Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee. How does inflation impact the Indian Rupee? Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
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07:07 Silver Price Forecast: XAG/USD posts modest gains near $36.00 on weaker US Dollar
The Silver price (XAG/USD) posts modest gains near $35.95 during the Asian session on Wednesday. The weaker US Dollar (USD) provides some support to the USD-denominated commodity price. Traders brace for Federal Reserve’s (Fed) Chair Jerome Powell testifies later on Wednesday.
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The weaker US Dollar provides some support to the USD-denominated Silver. The risk-on mood due to easing Middle East tension might cap the XAG/USD’s upside. The Silver price (XAG/USD) posts modest gains near $35.95 during the Asian session on Wednesday. The weaker US Dollar (USD) provides some support to the USD-denominated commodity price. Traders brace for Federal Reserve’s (Fed) Chair Jerome Powell testifies later on Wednesday.US consumer confidence fell again in June amid uncertainty about US President Donald Trump's trade policies. Data released by the Conference Board on Tuesday showed that the US Consumer Confidence Index dropped to 93 in June, below the market consensus. The downbeat US economic data drag the US Dollar lower and benefit the Silver price. On the other hand, the truce between Iran and Israel appeared to hold, with both sides saying they would honor the ceasefire if the other side did the same. Investors expect a truce between both countries will reduce the fears of wider war, which dampens the alternative safe-haven assets like Silver. Investors will closely monitor the developments surrounding the Israel-Iran conflict. Israeli Prime Minister Benjamin Netanyahu said the country would strike again if Iran rebuilds its nuclear project. Any signs of escalation could boost the white metal in the near term. Silver FAQs Why do people invest in Silver? Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets. Which factors influence Silver prices? Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices. How does industrial demand affect Silver prices? Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices. How do Silver prices react to Gold’s moves? Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
07:00 EUR/JPY hovers around 168.50 following BoJ’s Summary of Opinions
EUR/JPY steadies after registering over 0.50% losses in the previous session, trading around 168.30 during the Asian hours on Wednesday. The Japanese Yen (JPY) moves little against its peers following the release of the Summary of Opinions from the Bank of Japan's (BoJ) June meeting.
.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}EUR/JPY maintains its position as the BoJ’s Summary of Opinions indicated to keep interest rates steady.The pair may appreciate due to dampened safe-haven demand following the Israel-Iran ceasefire.ECB’s Francois Villeroy de Galhau noted that the central bank may cut interest rates despite the volatile Oil market.EUR/JPY steadies after registering over 0.50% losses in the previous session, trading around 168.30 during the Asian hours on Wednesday. The Japanese Yen (JPY) moves little against its peers following the release of the Summary of Opinions from the Bank of Japan's (BoJ) June meeting.The BoJ’s summary showed that some policymakers called for keeping interest rates steady for the time being due to uncertainty over the impact of US tariffs on Japan's economy. Many members indicated that the effects of US tariff policies are yet to materialize, and the impact will certainly exert downward pressure on firms’ sentiment.Latest data showed that Japan's core inflation climbed to a more than two-year high in May and remained above the central bank's 2% target. Additionally, the better-than-expected Japan's PMI keeps the door open for further rate hikes by the BoJ in the coming month.The risk-sensitive EUR/JPY cross may gain ground due to improved risk appetite, driven by the easing tensions in the Middle East. On Tuesday, US President Donald Trump announced that a ceasefire between Iran and Israel was in place, raising hopes for an end to the 12-day conflict.However, caution lingered amid uncertainty over the ceasefire’s durability. A US intelligence report indicated that US strikes on Iranian nuclear sites have set back Tehran's program by only a matter of months, per Reuters. Additionally, Iranian Foreign Minister Abbas Araghchi said that the country's nuclear program continues, per the local news agency Al Arabiya.European Central Bank (ECB) policymaker Francois Villeroy de Galhau told the Financial Times on Tuesday that the central bank could still cut interest rates despite the volatility seen in the Oil market. Meanwhile, ECB chief economist Philip Lane said that "Our monetary policy will have to take into account not only the most likely path (the baseline) but also the risks to activity and inflation," per Reuters. Interest rates FAQs What are interest rates? Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%.
If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation. How do interest rates impact currencies? Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money. How do interest rates influence the price of Gold? Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank.
If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold. What is the Fed Funds rate? The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure.
Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.
06:09 NZD/USD trades near weekly high, around 0.6035 area on softer USD
The NZD/USD pair attracts fresh buyers near the 0.6000 psychological mark during the Asian session on Wednesday and climbs back closer to the weekly top touched the previous day.
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Spot prices currently trade near the 0.6030-0.6035 area and look to prolong a three-day-old recovery momentum from a one-month low set at the start of this week amid a weaker US Dollar (USD). The USD Index (DXY), which tracks the Greenback against a basket of currencies, languishes near a one-week low touched on Tuesday amid the growing acceptance that the Federal Reserve (Fed) will lower borrowing costs further this year. The USD bulls seem rather unimpressed by Fed Chair Jerome Powell's relatively hawkish testimony on Tuesday, reaffirming the wait-and-see rate policy amid expectations that US President Donald Trump's trade tariffs will boost inflation.Meanwhile, the optimism over the Israel-Iran ceasefire, which came into effect on Tuesday, remains supportive of the upbeat market mood. This turns out to be another factor undermining the Greenback's safe-haven status and benefiting the risk-sensitive Kiwi. The NZD/USD pair draws additional support from the better-than-expected domestic data, showing that New Zealand posted a monthly trade surplus of NZ$1.235 billion in May and the annual deficit stood at NZ$3.79 billion. However, the growing acceptance that the Reserve Bank of New Zealand (RBNZ) will cut rates further on the back of lower inflation and economic headwinds stemming from US tariffs might hold back the NZD bulls from placing aggressive bets. Even from a technical perspective, the recent repeated failures near the 0.6065-0.6070 supply zone make it prudent to wait for a sustained move beyond the said barrier before positioning for any further appreciating move. New Zealand Dollar FAQs What key factors drive the New Zealand Dollar? The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD. How do decisions of the RBNZ impact the New Zealand Dollar? The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair. How does economic data influence the value of the New Zealand Dollar? Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate. How does broader risk sentiment impact the New Zealand Dollar? The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
06:09 GBP/USD holds gains above 1.3600 due to improved risk appetite
GBP/USD extends its winning streak for the third successive session, trading around 1.3620 during the Asian hours on Wednesday. The pair is hovering around 1.3648, the highest since February 2022, which was recorded on Tuesday.
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Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE). How do the decisions of the Bank of England impact on the Pound Sterling? The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates.
When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money.
When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects. How does economic data influence the value of the Pound? Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP.
A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall. How does the Trade Balance impact the Pound? Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
05:54 Premier Li: China's economy showed a steady improvement in the second quarter
Speaking at the t World Economic Forum (WEF) in Tianjin on Wednesday, China’s Premier Li Qiang said that “Judging from key indicators, China's economy showed a steady improvement in the second quarter.”
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Speaking at the t World Economic Forum (WEF) in Tianjin on Wednesday, China’s Premier Li Qiang said that “Judging from key indicators, China's economy showed a steady improvement in the second quarter.”Additional quotesRegardless of how the international environment evolves, China's economy has 'consistently maintained a strong momentum for growth.
We are confident in our ability to maintain a relatively rapid growth rate for China's economy.
Aim for China to transition from a major manufacturing power to a mega consumer market.
That will open up vast, untapped markets for businesses in various countries.
Willing to share original technologies and innovative scenarios with various countries.
Hope all will engage in activities that benefit greater good, abide by market principles in all endeavors, persist in doing the 'right thing'.
Urge all parties refrain from politicizing and securitizing economic and trade issues excessively.
Oppose decoupling, and focus on long-term goals.
Encourage all to seize opportunities presented by the current wave of technological innovation and industrial transformation.
China warmly welcomes enterprises from all over the world to invest in China, establish a strong foothold here.Market reactionAUD/USD is keeping its range play intact at around 0.6500 following these headlines. Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
We are confident in our ability to maintain a relatively rapid growth rate for China's economy.
Aim for China to transition from a major manufacturing power to a mega consumer market.
That will open up vast, untapped markets for businesses in various countries.
Willing to share original technologies and innovative scenarios with various countries.
Hope all will engage in activities that benefit greater good, abide by market principles in all endeavors, persist in doing the 'right thing'.
Urge all parties refrain from politicizing and securitizing economic and trade issues excessively.
Oppose decoupling, and focus on long-term goals.
Encourage all to seize opportunities presented by the current wave of technological innovation and industrial transformation.
China warmly welcomes enterprises from all over the world to invest in China, establish a strong foothold here.Market reactionAUD/USD is keeping its range play intact at around 0.6500 following these headlines. Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
05:39 Japanese Yen stands firm near one-week high against USD amid BoJ rate hike bets
The Japanese Yen (JPY) remains on the front foot against its American counterpart during the Asian session on Wednesday and remains close to a one-week high touched the previous day amid a combination of supporting factors.
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The USD remains depressed amid Fed rate cut expectations and weighs on USD/JPY. The Japanese Yen (JPY) remains on the front foot against its American counterpart during the Asian session on Wednesday and remains close to a one-week high touched the previous day amid a combination of supporting factors. The Summary of Opinions from the Bank of Japan's (BoJ) June meeting showed that some policymakers called for keeping interest rates steady for the time being due to uncertainty over the impact of US tariffs on Japan's economy. Adding to this, the fragile Israel-Iran ceasefire and trade-related uncertainties underpin the safe-haven JPY.Meanwhile, investors seem convinced that the BoJ will hike interest rates again amid the broadening inflationary pressures in Japan. The bets were reaffirmed by Japan’s Services Producer Price Index (PPI), which rose for the third straight month in May and remained above the 3% YoY rate. In contrast, traders have been pricing in the possibility that the Federal Reserve (Fed) would lower borrowing costs further this year. This, in turn, keeps the US Dollar (USD) bulls on the defensive and suggests that the path of least resistance for the lower-yielding JPY remains to the upside. Japanese Yen bulls in control as Japan’s Services PPI favor more BoJ rate hikesThe Bank of Japan published the Summary of Opinions from the June monetary policy meeting earlier this Wednesday, which revealed that several board members warned of the expected hit to Japan's fragile economy from sweeping US tariffs. Some policymakers said that consumer inflation was moving at higher-than-expected levels, partly due to surging prices of the staple rice.In fact, data released last week showed that Japan's annual National Consumer Price Index (CPI) rose by 3.5% YoY in May and remained above the BoJ's 2% target. Further details revealed that the National core CPI – excluding volatile fresh food prices – shot to the highest level since January 2023, while a core gauge that excludes both fresh food and energy prices climbed 3.3% YoY in May.Adding to this, Japan's Services Producer Price Index, released earlier this Wednesday, increased 3.3% YoY in May, slightly lower than the previous month's upwardly revised reading of 3.4%. The Services PPI is a key gauge of domestic inflation pressures and back-to-back readings above the 3% mark keep alive market expectations for further interest rate hikes by the central bank.Meanwhile, Federal Reserve Chair Jerome Powell, in his prepared remarks for the Semiannual Monetary Policy Report to Congress, said that the central bank expects inflation to start rising soon and is in no rush to ease borrowing costs. Powell's remarks come after his colleagues recently suggested a rate cut at the July policy meeting, though it does little to impress the US Dollar bulls. The Israel-Iran ceasefire came into effect on Tuesday and appeared to hold for now, despite an Israeli attack on Tehran and an Iranian missile strike. Both Iran and Israel have claimed victory in the war and warned they were ready to renew hostilities if the other attacks. This keeps geopolitical risks in play and benefits the safe-haven Japanese Yen amid the divergent BoJ-Fed expectations. USD/JPY finds acceptance below 200-hour SMA; could slide to 144.00From a technical perspective, the overnight decline below the 145.35-145.25 resistance-turned-support and acceptance below the 200-hour Simple Moving Average (SMA) was seen as a key trigger for the USD/JPY bears. Moreover, oscillators on the daily chart have just started gaining negative traction and validate the near-term negative outlook for the currency pair. Some follow-through selling below mid-144.00s, or the overnight trough, should pave the way for a slide towards the 144.00 round figure en route to the 143.70-143.65 region before spot prices aim to test sub-143.00 levels.On the flip side, any attempted recovery might now attract fresh sellers near the 145.00 psychological mark and remain capped near the 145.25-145.35 static barrier. A sustained strength beyond the latter might trigger a short-covering rally and allow the USD/JPY pair to reclaim the 146.00 mark. The momentum could extend further, though it runs the risk of fizzling out quickly near the 146.65-146.70 region. The latter should act as a pivotal point, which if cleared would negate the negative outlook and shift the near-term bias back in favor of bullish traders. Economic Indicator Corporate Service Price Index (YoY) The Corporate Service Price Index (CSPI) released by the Bank of Japan measures the prices of services traded among companies. It presents price developments that reflect most sensitively the supply and demand conditions in the services market. It is also considered as an indicator for inflationary pressures. Normally, a high reading is seen as positive (or bullish) for the JPY, while a low reading is seen as negative (or bearish). Read more. Last release: Tue Jun 24, 2025 23:50 Frequency: Monthly Actual: 3.3% Consensus: - Previous: 3.1% Source: Bank of Japan
05:10 Australian Dollar remains strong despite a weaker-than-expected Monthly CPI
The Australian Dollar (AUD) extends its gains for the third successive session on Wednesday. The AUD/USD pair remains stronger following the release of Australia’s Monthly Consumer Price Index (CPI), which climbed by 2.1% year-over-year in May.
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.fxs-event-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-event-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-event-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-event-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:12px}.fxs-event-module-section:last-child{border:none;margin-bottom:0}.fxs-event-module-header{color:#1b1c23;font-weight:700;font-size:16px;font-style:normal;line-height:20px;margin:0;padding:4px 0;background-color:#fff;border:none;position:relative;padding-right:32px}.fxs-event-module-header label{cursor:pointer;display:block}.fxs-event-module-header label:after,.fxs-event-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-event-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-event-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-event-module-container input[type=checkbox]{display:none}.fxs-event-module-container input[type=checkbox]:checked+.fxs-event-module-section .fxs-event-module-header label:after{transform:rotate(45deg) translateX(4px)}.fxs-event-module-container input[type=checkbox]:checked+.fxs-event-module-section .fxs-event-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-event-module-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0;margin-top:8px}.fxs-event-module-content.why-matters{max-height:0;overflow:hidden;transition:all .3s ease-in-out}.fxs-event-module-container input[type=checkbox]:checked+.fxs-event-module-section .fxs-event-module-content.why-matters{max-height:1000px;margin-top:8px}.fxs-event-module-calendar-title{color:#1b1c23;font-size:17.6px;font-family:Roboto;font-style:normal;font-weight:700;line-height:20.8px;margin:4px 0 0 0}.fxs-event-module-calendar-title-description-wrapper{display:flex;flex-direction:column;gap:12px;border-bottom:1px solid #ececf1;padding-bottom:16px;margin-bottom:16px}.fxs-event-module-inner-calendar{padding:16px}.fxs-event-module-inner-calendar .fxs-event-module-section{padding:0}.fxs-event-module-inner-calendar .fxs-event-module-header{font-size:12.8px;line-height:17px}.fxs-event-module-read-more{display:flex;align-items:center;align-content:center;gap:4px;color:#e4871b;font-size:12.8px;font-family:Roboto;font-style:normal;font-weight:700;line-height:17px;text-decoration:none}.fxs-event-module-read-more svg{width:16px;height:16px}.fxs-event-module-read-more:hover span{text-decoration:underline}.fxs-event-module-release{margin:0;display:flex;flex-direction:column;gap:2px}.fxs-event-module-release>p{font-size:12.8px;font-family:Roboto;font-style:normal;line-height:17px;margin:0}.fxs-event-module-release>p>strong{color:#8c8d91;font-weight:700}.fxs-event-module-release>p>span{color:#8c8d91;font-weight:400}.fxs-event-module-release>p>a{color:#e4871b;font-weight:700;text-decoration:none}.fxs-event-module-release>p>a:hover>span{text-decoration:underline}.fxs-event-module-inner-calendar .fxs-event-module-container{margin:16px 0 0 0;border-top:1px solid #ececf1;padding:12px 0 0 0}@media (min-width:680px){.fxs-event-module-inner-calendar .fxs-event-module-header{font-size:14.72px;line-height:20px}.fxs-event-module-release p{font-size:14.72px;line-height:20px}.fxs-event-module-read-more{font-size:14.72px;line-height:20px}.fxs-event-module-calendar-title{font-size:22.4px;line-height:25.6px}.fxs-event-module-title{font-size:19.2px;line-height:27.2px}.fxs-event-module-header{font-size:19.2px;line-height:25.92px}.fxs-event-module-content{font-size:16px;line-height:21.6px}}The Australian Dollar extends gains due to the Israel-Iran ceasefire.Australia’s Monthly Consumer Price Index increased by 2.1% YoY in May, against the expected 2.3% rise and the 2.4% prior.Fed Chair Powell advocated for delaying rate cuts, likely until sometime in the fourth quarter.The Australian Dollar (AUD) extends its gains for the third successive session on Wednesday. The AUD/USD pair remains stronger following the release of Australia’s Monthly Consumer Price Index (CPI), which climbed by 2.1% year-over-year in May. The inflation came in softer than market expectations of a 2.3% rise and the 2.4% prior, easing after remaining consistent for three successive months.Australia’s softer inflation data, along with recent weaker-than-expected GDP figures, reinforces expectations of the Reserve Bank of Australia’s (RBA) rate cut in July. Markets are now pricing in an 80% probability of a 25 basis points (bps) rate cut by the RBA next month. Traders are also expecting a total of 73 bps interest rate cuts by the end of the year.The AUD also receives support from improved risk appetite amid easing tensions in the Middle East. US President Donald Trump announced that a ceasefire between Iran and Israel had taken effect, raising hopes for an end to the 12-day conflict. However, caution lingered amid uncertainty over the ceasefire’s durability. Traders will likely focus on the potential revival of nuclear talks and the fate of Iran’s enriched uranium.Australian Dollar advances as US Dollar remains subdued amid improved risk appetiteThe US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is trading lower at around 97.90 at the time of writing. Investors will keep an eye on Federal Reserve (Fed) Chair Jerome Powell’s testimony later on Wednesday.Fed Chair Powell highlighted during his testimony before the congressional budget committee on Tuesday, strengthening his case for delaying rate cuts, likely until sometime in the fourth quarter. Powell added, “When the time is right, expect rate cuts to continue.” He also said that data suggests that at least some of the tariffs will hit consumers and will start to see more tariff inflation starting in June.Fed’s Powell reaffirmed his stance that policymakers should avoid rushing to adjust interest rates, contradicting recent comments from Fed Governors Christopher Waller and Michelle Bowman, who said that the two would be open to lowering rates as soon as July.Fed’s Vice Chair for Supervision Michelle Bowman noted on Monday that the time to cut interest rates is getting nearer as risks to the job market may be on the rise. Bowman also highlighted that inflation appears to be on a sustained path back to 2% and she is less concerned that tariffs will cause an inflation problem.Fed Governor Christopher Waller noted on Friday that the US central bank could start easing monetary policy as soon as next month, signaling flexibility amid global economic uncertainty and rising geopolitical risks.The US Fed decided to keep the interest rate steady at 4.5% in June as widely expected. The Federal Open Market Committee (FOMC) still sees around 50 basis points of interest rate cuts through the end of 2025.S&P Global Australia Manufacturing Purchasing Managers Index remained consistent at a 51.0 reading in June. Meanwhile, the Services PMI edged higher to 51.3 from the previous reading of 50.6, while the Composite PMI improved to 51.2 in June from 50.5 prior.Australian Dollar moves above 0.6500, nine-day EMAAUD/USD is trading around 0.6510 on Wednesday. The technical analysis of the daily suggests a persistent bullish bias as the pair remains within the ascending channel pattern. The 14-day Relative Strength Index (RSI) remains slightly above the 50 mark. Additionally, the pair has moved above the nine-day Exponential Moving Average (EMA), indicating that short-term price momentum is strengthening.On the upside, the AUD/USD pair may explore the region around the seven-month high of 0.6552, which was recorded on June 16, followed by the ascending channel’s upper boundary around 0.6570.The immediate support appears at the nine-day EMA of 0.6486. A break below this level would weaken the short-term price momentum and put downward pressure on the AUD/USD pair to test the lower boundary of the ascending channel around 0.6450, aligned with the 50-day EMA at 0.6438.AUD/USD: Daily Chart Australian Dollar PRICE Today The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the US Dollar. USD EUR GBP JPY CAD AUD NZD CHF USD -0.17% -0.10% -0.16% 0.06% -0.25% -0.40% -0.12% EUR 0.17% 0.09% 0.00% 0.20% -0.12% -0.25% 0.05% GBP 0.10% -0.09% -0.10% 0.14% -0.18% -0.33% -0.00% JPY 0.16% 0.00% 0.10% 0.18% -0.07% -0.20% 0.09% CAD -0.06% -0.20% -0.14% -0.18% -0.25% -0.34% -0.14% AUD 0.25% 0.12% 0.18% 0.07% 0.25% -0.21% 0.17% NZD 0.40% 0.25% 0.33% 0.20% 0.34% 0.21% 0.33% CHF 0.12% -0.05% 0.00% -0.09% 0.14% -0.17% -0.33% 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 Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote). Economic Indicator Monthly Consumer Price Index (YoY) The Monthly Consumer Price Index (CPI), released by the Australian Bureau of Statistics on a monthly basis, measures the changes in the price of a fixed basket of goods and services acquired by household consumers. The indicator was developed to provide inflation data at a higher frequency than the quarterly CPI. The YoY reading compares prices in the reference month to the same month a year earlier. A high reading is seen as bullish for the Australian Dollar (AUD), while a low reading is seen as bearish. Read more. Last release: Wed Jun 25, 2025 01:30 Frequency: Monthly Actual: 2.1% Consensus: 2.3% Previous: 2.4% Source: Australian Bureau of Statistics
05:08 WTI drifts lower below $65.00 after Israel agrees to Iran ceasefire
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $64.90 during the Asian trading hours on Wednesday. The WTI price tumbles to a two-week low near $64.75 after Israel agrees to a ceasefire with Iran after nearly two weeks of conflict.
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Expectations Israel-Iran ceasefire will reduce the risk of oil supply disruptions in the Middle East weigh on the WTI price. US crude oil inventories declined by 4.277 million barrels in the week ended June 20, according to the API. West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $64.90 during the Asian trading hours on Wednesday. The WTI price tumbles to a two-week low near $64.75 after Israel agrees to a ceasefire with Iran after nearly two weeks of conflict.The WTI price edges lower after news of the ceasefire between Israel and Iran. Investors expect a truce between both countries will reduce the risk of oil supply disruptions in the Middle East. "If the ceasefire is followed as announced, investors might expect the return to normalcy in oil," said Priyanka Sachdeva, senior market analyst at Phillip Nova.US Crude Oil Inventories saw another sharp draw last week. The American Petroleum Institute (API) weekly report showed crude oil stockpiles in the US for the week ending June 20 declined by 4.277 million barrels, compared to a fall of 10.133 million barrels in the previous week. So far this year, crude oil inventories are up 3.3 million barrels, according to oil price calculations of API data.Oi traders will closely monitor the developments surrounding the Israel-Iran conflict. Any signs of renewed escalation could raise the fears of oil global supplies, which might boost the WTI price. The weekly crude oil stock from the US Energy Information Administration will be published later on Wednesday. WTI Oil FAQs What is WTI Oil? WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media. What factors drive the price of WTI Oil? Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa. How does inventory data impact the price of WTI Oil The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency. How does OPEC influence the price of WTI Oil? OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
04:31 Australia’s monthly CPI inflation eases to 2.1% YoY in May vs. 2.3% expected
Australia’s monthly Consumer Price Index (CPI) eased to 2.1% in the year to May, compared to a 2.4% rise seen in April, according to the data published by the Australian Bureau of Statistics (ABS) on Wednesday.
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Australia’s monthly Consumer Price Index (CPI) eased to 2.1% in the year to May, compared to a 2.4% rise seen in April, according to the data published by the Australian Bureau of Statistics (ABS) on Wednesday.The market forecast was for 2.3% growth in the reported period. Market reaction to Australia’s monthly CPI inflationAt the time of writing, the AUD/USD pair is trading 0.21% higher on the day to trade at 0.6501. Inflation FAQs What is inflation? Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%. What is the Consumer Price Index (CPI)? The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls. What is the impact of inflation on foreign exchange? Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money. How does inflation influence the price of Gold? Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it.
Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
04:25 BoJ’ Tamura: Inflation is on track, somewhat stronger than expected
The Bank of Japan (BoJ) board member Naoki Tamura said on Wednesday that inflation is on track or moving somewhat stronger than expected.
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The Bank of Japan (BoJ) board member Naoki Tamura said on Wednesday that inflation is on track or moving somewhat stronger than expected.Key quotes Inflation on track or moving somewhat stronger than expected.
Upward inflation risk had been elevated until March.
Japan’s wage momentum sufficiently heightening.
Consumer inflation data for April, May overshooting expectations.
While downward pressure exists, risk of Japan’s wage, price-setting behaviour reverting to low growth environment is small.
US tariff likely to weigh on Japan’s economy, prices but inflation to Tay near 2% until fiscal 2027.
Market-based services inflation exceeding 2%, rent and public service costs also gradually rising.
Rise in fresh food prices can no longer be described as temporary, must watch moves carefully.
Medium-, long-term inflation expectations heightening gradually.
Household, corporate inflation expectations are already around 2%.
Must be vigilant to risk of Japan’s inflation expectations overshooting further.
My basic stance is BOJ must raise rate in timely, appropriate fashion without being too quick or too late.
Don’t see 0.5% as barrier for BoJ rate hikes.
JGB market function has improved somewhat but remains low.
Voted against June decision to slow pace of bond buying taper next year on view BOJ should normalise bond holdings balance as soon as possible.
Must steadily normalise balance sheet, even though it may take time.Market reaction At the press time, the USD/JPY pair is down 0.49% on the day to trade at 151.94. Bank of Japan FAQs What is the Bank of Japan? The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%. What has been the Bank of Japan’s policy? The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance. How do Bank of Japan’s decisions influence the Japanese Yen? The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance. Why did the Bank of Japan decide to start unwinding its ultra-loose policy? A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
Upward inflation risk had been elevated until March.
Japan’s wage momentum sufficiently heightening.
Consumer inflation data for April, May overshooting expectations.
While downward pressure exists, risk of Japan’s wage, price-setting behaviour reverting to low growth environment is small.
US tariff likely to weigh on Japan’s economy, prices but inflation to Tay near 2% until fiscal 2027.
Market-based services inflation exceeding 2%, rent and public service costs also gradually rising.
Rise in fresh food prices can no longer be described as temporary, must watch moves carefully.
Medium-, long-term inflation expectations heightening gradually.
Household, corporate inflation expectations are already around 2%.
Must be vigilant to risk of Japan’s inflation expectations overshooting further.
My basic stance is BOJ must raise rate in timely, appropriate fashion without being too quick or too late.
Don’t see 0.5% as barrier for BoJ rate hikes.
JGB market function has improved somewhat but remains low.
Voted against June decision to slow pace of bond buying taper next year on view BOJ should normalise bond holdings balance as soon as possible.
Must steadily normalise balance sheet, even though it may take time.Market reaction At the press time, the USD/JPY pair is down 0.49% on the day to trade at 151.94. Bank of Japan FAQs What is the Bank of Japan? The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%. What has been the Bank of Japan’s policy? The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance. How do Bank of Japan’s decisions influence the Japanese Yen? The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance. Why did the Bank of Japan decide to start unwinding its ultra-loose policy? A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
04:15 PBOC sets USD/CNY reference rate at 7.1668 vs. 7.1656 previous
On Wednesday, the People’s Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead at 7.1668 as compared to the previous day's fix of 7.1656 and 7.1709 Reuters estimate.
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On Wednesday, the People’s Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead at 7.1668 as compared to the previous day's fix of 7.1656 and 7.1709 Reuters estimate. PBOC FAQs What does the People's Bank of China do? The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market. Who owns the PBoC? The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts. What are the main policy tools used by the PBoC? Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi. Are private banks allowed in China? Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.
03:51 Gold Price Forecast: XAU/USD drifts lower below $3,350 amid de-escalation in the Middle East
The Gold price (XAU/USD) edges lower to near $3,325 during the early Asian session on Wednesday. The precious metal loses ground due to the de-escalation of tensions in the Middle East. Traders brace for the Federal Reserve’s (Fed) Chair Jerome Powell testifies later on Wednesday.
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The Gold price (XAU/USD) edges lower to near $3,325 during the early Asian session on Wednesday. The precious metal loses ground due to the de-escalation of tensions in the Middle East. Traders brace for the Federal Reserve’s (Fed) Chair Jerome Powell testifies later on Wednesday. The yellow metal retreats from recent highs after news of the ceasefire between Israel and Iran. A truce between both countries came into effect following four waves of Iranian attacks on Israeli-occupied territories. "The de-escalation of tensions in the Middle East is the primary factor that's weighing on gold. The safe-haven bid has diminished, and the market is in more of a risk-on mode," said Peter Grant, vice president and senior metals strategist at Zaner Metals.Kansas City Fed President Jeff Schmid said on Wednesday the US central bank has time to study tariff effects on inflation before any rate decision. Schmid’s comments suggest he’s in no rush to lower borrowing costs, echoing what Fed Chair Jerome Powell said earlier TuesdayFed Chair Powell reiterated his stance that policymakers should not hurry to adjust policy, saying that the US central bank will continue to wait and see how the economy evolves before deciding whether to reduce its key interest rate. Less dovish remarks from the Fed Chair might help limit the Gold’s losses in the near term.Money markets have fully priced in two Fed reductions by the end of 2025, with a first move in September far more likely than next month, though expectation of a July reduction rises from last week. Gold FAQs Why do people invest in Gold? 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. Who buys the most Gold? 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. How is Gold correlated with other assets? 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. What does the price of Gold depend on? 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.
03:31 Fed's Schmid: Wait-and-see approach to policy is appropriate
Federal Reserve Bank of Kansas City President Jeff Schmid said early Wednesday that the Fed should wait to see how tariffs and other policies impact the economy before adjusting interest rates, per Bloomberg.
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Federal Reserve Bank of Kansas City President Jeff Schmid said early Wednesday that the Fed should wait to see how tariffs and other policies impact the economy before adjusting interest rates, per Bloomberg. Key quotesWith all this uncertainty, the current posture of monetary policy, which has been characterized as ‘wait-and-see,’ is appropriate.
The resilience of the economy gives us the time to observe how prices and the economy develop.
“Certainly, with the inflation of the past couple of years still in people’s minds, I will be carefully watching the monthly price data for signs of broad-based price increases that might further challenge an already fragile price-setting psychology. Market reaction The US Dollar Index (DXY) is trading 0.07% lower on the day at 97.90, as of writing. Fed FAQs What does the Federal Reserve do, how does it impact the US Dollar? Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback. How often does the Fed hold monetary policy meetings? The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis. What is Quantitative Easing (QE) and how does it impact USD? In extreme situations, the Federal Reserve may resort to a policy named 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 during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar. What is Quantitative Tightening (QT) and how does it impact the US Dollar? Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
The resilience of the economy gives us the time to observe how prices and the economy develop.
“Certainly, with the inflation of the past couple of years still in people’s minds, I will be carefully watching the monthly price data for signs of broad-based price increases that might further challenge an already fragile price-setting psychology. Market reaction The US Dollar Index (DXY) is trading 0.07% lower on the day at 97.90, as of writing. Fed FAQs What does the Federal Reserve do, how does it impact the US Dollar? Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback. How often does the Fed hold monetary policy meetings? The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis. What is Quantitative Easing (QE) and how does it impact USD? In extreme situations, the Federal Reserve may resort to a policy named 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 during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar. What is Quantitative Tightening (QT) and how does it impact the US Dollar? Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
03:14 BoJ Summary of Opinions: Member says uncertainty is extremely high over outlook
The Bank of Japan (BoJ) published the Summary of Opinions from the June monetary policy meeting, with the key findings noted below.
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The Bank of Japan (BoJ) published the Summary of Opinions from the June monetary policy meeting, with the key findings noted below. Key quotesOne member said: While much of the hard data for April and May has been relatively solid, it is likely that the effects of tariff policies are yet to materialize.
One member said while the impact of U.S. tariff policy will certainly exert downward pressure on firms’ sentiment, the bank needs to take some time to examine the magnitude of the impact on the real economy.
One member said despite the impact of U.S. tariff policy, many firms will likely continue to raise wages to address labor shortages, make high levels of business fixed investment.
One member said although the direct impact of U.S. tariff policy has not been observed so far, Japan’s economy has been somewhat stagnant.
One member said Japan’s economy at crossroads between making a transition to a “growth-oriented economy driven by wage increases and investment” and falling into stagflation.
One member said although uncertainty regarding trade policies remains extremely high, on the domestic front, wage developments have been solid, and the CPI has been slightly higher than expected.
One member said as the price of rice could affect perceived inflation and inflation expectations, it is necessary to closely monitor developments in rice prices.
One member said as US, Europe and emerging economies leaning toward accommodative policies, Japan’s economy could unexpectedly be pushed up or experience inflationary pressure.
One member said if its outlook for economic activity and prices will be realized, the bank, in accordance with improvement in economic activity and prices, will continue to raise the policy interest rate.
One member said given high uncertainty, the bank should, at this point, maintain accommodative financial conditions with the current interest rate level and thereby firmly support the economy.
One member said even though prices have been somewhat higher than expected, it is appropriate for the Bank to maintain current policy, given downside risks stemming from U.S. tariff policy and situation in the Middle East.
One member said with extremely high uncertainty in the outlook, it is appropriate for the Bank to maintain the current policy interest rate for the time being.
One member said increased volatility in the super-long-term zone may spill over to the entire yield curve, thereby spreading unintended tightening effects to the market as a whole.
One member said situation of government bond markets around the world has been a major topic of discussion, such as at international meetings, attention is warranted on the possibility that developments overseas will spread to Japan.
One member said although the CPI has been higher than expected, the pass-through of higher wages to services prices seems to have plateaued.
One member said with inflation being at levels higher than expected, the bank may face a situation where it should adjust the degree of monetary accommodation decisively, even when there is high uncertainty.Market reaction Following the BoJ’s Summary of Opinions, the USD/JPY pair is down 0.03% on the day to trade at 144.90 as of writing. Bank of Japan FAQs What is the Bank of Japan? The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%. What has been the Bank of Japan’s policy? The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance. How do Bank of Japan’s decisions influence the Japanese Yen? The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance. Why did the Bank of Japan decide to start unwinding its ultra-loose policy? A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
One member said while the impact of U.S. tariff policy will certainly exert downward pressure on firms’ sentiment, the bank needs to take some time to examine the magnitude of the impact on the real economy.
One member said despite the impact of U.S. tariff policy, many firms will likely continue to raise wages to address labor shortages, make high levels of business fixed investment.
One member said although the direct impact of U.S. tariff policy has not been observed so far, Japan’s economy has been somewhat stagnant.
One member said Japan’s economy at crossroads between making a transition to a “growth-oriented economy driven by wage increases and investment” and falling into stagflation.
One member said although uncertainty regarding trade policies remains extremely high, on the domestic front, wage developments have been solid, and the CPI has been slightly higher than expected.
One member said as the price of rice could affect perceived inflation and inflation expectations, it is necessary to closely monitor developments in rice prices.
One member said as US, Europe and emerging economies leaning toward accommodative policies, Japan’s economy could unexpectedly be pushed up or experience inflationary pressure.
One member said if its outlook for economic activity and prices will be realized, the bank, in accordance with improvement in economic activity and prices, will continue to raise the policy interest rate.
One member said given high uncertainty, the bank should, at this point, maintain accommodative financial conditions with the current interest rate level and thereby firmly support the economy.
One member said even though prices have been somewhat higher than expected, it is appropriate for the Bank to maintain current policy, given downside risks stemming from U.S. tariff policy and situation in the Middle East.
One member said with extremely high uncertainty in the outlook, it is appropriate for the Bank to maintain the current policy interest rate for the time being.
One member said increased volatility in the super-long-term zone may spill over to the entire yield curve, thereby spreading unintended tightening effects to the market as a whole.
One member said situation of government bond markets around the world has been a major topic of discussion, such as at international meetings, attention is warranted on the possibility that developments overseas will spread to Japan.
One member said although the CPI has been higher than expected, the pass-through of higher wages to services prices seems to have plateaued.
One member said with inflation being at levels higher than expected, the bank may face a situation where it should adjust the degree of monetary accommodation decisively, even when there is high uncertainty.Market reaction Following the BoJ’s Summary of Opinions, the USD/JPY pair is down 0.03% on the day to trade at 144.90 as of writing. Bank of Japan FAQs What is the Bank of Japan? The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%. What has been the Bank of Japan’s policy? The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance. How do Bank of Japan’s decisions influence the Japanese Yen? The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance. Why did the Bank of Japan decide to start unwinding its ultra-loose policy? A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
02:52 Japan Corporate Service Price Index (YoY): 3.3% (May) vs 3.1%
Japan Corporate Service Price Index (YoY): 3.3% (May) vs 3.1%
02:30 US strikes only set back Iran’s nuclear program by months - Reuters
A US intelligence report suggested that US strikes over the weekend on Iranian nuclear facilities have set back Tehran's program by only a matter of months and it was not “completely and fully obliterated” as US President Donald Trump has said, three sources with knowledge of the matter told Reuters
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A US intelligence report suggested that US strikes over the weekend on Iranian nuclear facilities have set back Tehran's program by only a matter of months and it was not “completely and fully obliterated” as US President Donald Trump has said, three sources with knowledge of the matter told Reuters.Iranian Foreign Minister Abbas Araghchi said that the country's nuclear program continues, per the local news agency Al Arabiya.Market reactionAt the time of writing, the West Texas Intermediate (WTI) is trading 0.05% lower on the day to trade at $64.70. The Gold price (XAU/USD) is trading 0.02% lower on the day to trade at $3,322. Risk sentiment FAQs What do the terms"risk-on" and "risk-off" mean when referring to sentiment in financial markets? In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest. What are the key assets to track to understand risk sentiment dynamics? Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit. Which currencies strengthen when sentiment is "risk-on"? The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity. Which currencies strengthen when sentiment is "risk-off"? The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
02:11 USD/CAD holds below 1.3750 on easing Middle East tensions
The USD/CAD pair trades with mild losses near 1.3725 during the early Asian session on Wednesday. The US Dollar (USD) weakens against the Canadian Dollar (CAD) amid easing Middle East tensions. Investors will keep an eye on Federal Reserve (Fed) Chair Jerome Powell testifies later on Wednesday.
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Fed’s Powell said central bank will continue to wait and see how the economy evolves before deciding whether to cut its rate. Canada CPI inflation remained unchanged at 1.7% YoY in May as expected.The USD/CAD pair trades with mild losses near 1.3725 during the early Asian session on Wednesday. The US Dollar (USD) weakens against the Canadian Dollar (CAD) amid easing Middle East tensions. Investors will keep an eye on Federal Reserve (Fed) Chair Jerome Powell testifies later on Wednesday. Investors bet that a delicate ceasefire between Israel and Iran will hold. A ceasefire between Iran and Israel begins following four waves of Iranian attacks on Israeli-occupied territories. US President Donald Trump said on Tuesday a ceasefire was now in place and asked both countries not to violate it. Easing tensions in the Middle East and risk-on sentiment could weigh on the Greenback in the near term. Fed Chair Powell reiterated his stance that policymakers should not hurry to adjust policy, contradicting recent comments from Fed Governors Christopher Waller and Michelle Bowman, who said that the two would be open to lowering rates as soon as July. Money markets have fully priced in two Fed reductions by the end of 2025, with a first move in September far more likely than next month, though expectations of a July reduction rise from last week.Data released by Statistics Canada on Tuesday showed that the country’s Consumer Price Index (CPI) rose 1.7% on a yearly basis in May versus 1.7% prior. This reading aligned with market expectations. On a monthly basis, the CPI rose 0.6% in May, compared to a 0.1% decline reported in April. This reading surpassed the market expectation of 0.5%.Meanwhile, the extended decline in Crude Oil prices might undermine the commodity-linked Loonie and cap the downside for the pair. It’s worth noting that Canada is the largest oil exporter to the US, and lower crude oil prices tend to have a negative impact on the CAD value. Canadian Dollar FAQs What key factors drive the Canadian Dollar? The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar. How do the decisions of the Bank of Canada impact the Canadian Dollar? The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive. How does the price of Oil impact the Canadian Dollar? The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD. How does inflation data impact the value of the Canadian Dollar? While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar. How does economic data influence the value of the Canadian Dollar? Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
01:46 New Zealand Trade Balance NZD (MoM) above forecasts ($1060M) in May: Actual ($1235M)
New Zealand Trade Balance NZD (MoM) above forecasts ($1060M) in May: Actual ($1235M)
01:45 New Zealand Imports climbed from previous $6.42B to $6.44B in May
New Zealand Imports climbed from previous $6.42B to $6.44B in May
01:45 New Zealand Trade Balance NZD (YoY): $-3.79B (May) vs $-4.81B
New Zealand Trade Balance NZD (YoY): $-3.79B (May) vs $-4.81B
01:45 New Zealand Exports down to $7.68B in May from previous $7.84B
New Zealand Exports down to $7.68B in May from previous $7.84B
00:42 AUD/JPY Price Forecast: Slips below 94.00 as Middle East de-escalation lifts safe havens
The AUD/JPY retreats amid a risk-on mood, spurred by the de-escalation of the Middle East conflict. This pushed safe-haven currencies, except for the US Dollar, higher during Tuesday’s session, to the detriment of the Australian Dollar.
.fxs-major-currency-prices-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-major-currency-prices-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-major-currency-prices-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:8px 16px}table.fxs-major-currency-prices-currency-prices-table{width:100%;text-align:center;border-collapse:collapse;font-size:1rem}table.fxs-major-currency-prices-currency-prices-table th{background-color:#f2f2f2}table.fxs-major-currency-prices-currency-prices-table td{color:#fff}table.fxs-major-currency-prices-currency-prices-table td.green{background-color:#9cd6cd}table.fxs-major-currency-prices-currency-prices-table td.red{background-color:#faafb5}table.fxs-major-currency-prices-currency-prices-table td.blue-grey{background-color:#888a93}.fxs-major-currency-prices-currency-prices-legend{font-size:11px;margin:8px;color:#49494f}@media (min-width:680px){.fxs-major-currency-prices-content{font-size:16px;line-height:21.6px}.fxs-major-currency-prices-title{font-size:19.2px;line-height:27.2px}}.fxs-major-currency-prices-currency-price td.dark-green{background-color:#39ad9a}.fxs-major-currency-prices-currency-price td.light-green{background-color:#9cd6cd}.fxs-major-currency-prices-currency-price td.gray{background-color:#888a93}.fxs-major-currency-prices-currency-price td.light-red{background-color:#faafb5}.fxs-major-currency-prices-currency-price td.strong-red{background-color:#f55e6a}AUD/JPY down 0.06% after failing to clear May 14 peak at 95.56.RSI turns slightly lower; mixed signals keep traders focused on price structure.Key support at 93.40/56; break below could expose 93.00 and 92.63 Senkou Span B.The AUD/JPY retreats amid a risk-on mood, spurred by the de-escalation of the Middle East conflict. This pushed safe-haven currencies, except for the US Dollar, higher during Tuesday’s session, to the detriment of the Australian Dollar. At the time of writing, the cross-pair trades below the 94.00 figure, and is down 0.06%.AUD/JPY Price Forecast: Technical AnalysisThe trend remains down in the AUD/JPY cross-pair. Even though the Australian Dollar showed signs of strength, its failure to clear the May 14 peak of 95.56 pushed the pair below the 94.00 figure, although it meanders around the latter.In the short term, the Relative Strength Index (RSI) aims slightly lower, though it remains bullish. The mixed readings leave us as traders focused on price action.Hence, if AUD/JPY clears the confluence of the Tenkan-sen and the Senkou Span A at around 93.40/56, look for a test of the Kijun-sen at 93.23. On further weakness, 93.00 will be exposed, followed by the Senkou Span B at 92.63.Conversely, if AUD/JPY rises past 94.00, the first resistance would be 95.00, followed by 95.56, the May 14 high. Above this level, the next zone of interest will be the 96.00 figure.AUD/JPY Price Chart – Daily Australian Dollar PRICE Today The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Swiss Franc. USD EUR GBP JPY CAD AUD NZD CHF USD 0.00% -0.00% 0.00% 0.05% 0.00% -0.02% -0.04% EUR -0.01% -0.00% -0.05% 0.03% -0.02% -0.07% -0.04% GBP 0.00% 0.00% -0.02% 0.02% 0.00% -0.07% -0.01% JPY 0.00% 0.05% 0.02% 0.05% 0.04% 0.00% 0.04% CAD -0.05% -0.03% -0.02% -0.05% 0.00% 0.02% -0.05% AUD 0.00% 0.02% -0.01% -0.04% -0.01% -0.11% 0.02% NZD 0.02% 0.07% 0.07% -0.01% -0.02% 0.11% 0.05% CHF 0.04% 0.04% 0.00% -0.04% 0.05% -0.02% -0.05% 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 Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
00:30 EUR/USD extends rally above 1.1600 as ceasefire sinks US Dollar
EUR/USD extended its gains for the fourth straight day, up by 0.39%, even though it trades off the yearly highs of 1.1641, driven by US Dollar weakness spurred by a de-escalation of the Middle East conflict.
.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}EUR/USD gains 0.39%, trading near yearly high after the ceasefire weakens safe-haven Dollar demand.Powell says policy is modestly restrictive but open to cuts if inflation remains contained.IFO Business Climate improves for sixth month; ECB officials hint at steady path unless inflation flares.EUR/USD extended its gains for the fourth straight day, up by 0.39%, even though it trades off the yearly highs of 1.1641, driven by US Dollar weakness spurred by a de-escalation of the Middle East conflict. Israel and Iran agreed to a ceasefire, which improved the market mood and ultimately weighed on the Greenback. At the time of writing, the pair traded at 1.1619, up 0.38%.Market mood turned upbeat, pushing the Dollar down. The US Dollar Index (DXY), which tracks the buck’s performance against a basket of six currencies, including the Euro, tumbled over 0.47%, trading near weekly lows of 97.70.Recently, the New York Times revealed that US intelligence suggests that strikes on Iran did not destroy nuclear sites, which CNN previously reported. Despite this, Wall Street is poised to end Tuesday’s session in the green with traders brushing aside hawkish comments by the Federal Reserve Chair Jerome Powell.In his testimony before the US House of Representatives, Powell stated that rates are modestly restrictive. He added that if inflation pressures are contained, the Federal Open Market Committee (FOMC) may consider cutting rates.During the European session, the Eurozone economic docket revealed that the IFO Business Climate rose for the sixth consecutive month, despite overall geopolitical uncertainty. Aside from this, some European Central Bank (ECB) speakers crossed the wires.ECB Francois Villeroy said that the central bank could still cut rates if inflation expectations remain moderate, according to the FT. ECB Kazimir shifted his stance, turning neutral, favoring keeping rates unchanged. He said that he thinks “that we are at target when it comes to neutral rate.”Daily digest market movers: EUR/USD soars despite Fed’s hawkish tiltEUR/USD increased despite Fed Chair Jerome Powell's hawkish remarks, stating that the Fed is in no hurry to cut interest rates. Fed Governor Michael Barr said that monetary policy is well-positioned for the Fed to wait and see the economic evolution.New York Fed President John Williams echoed Powell’s comments, mentioning that tariffs could drive inflation higher and that economic growth will slow down. He also noted that tariffs are likely to impact growth and inflation in the months to come.Minneapolis Fed Neel Kashkari said that the Fed is in a wait-and-see mode regarding monetary policy. He says the Committee is evaluating the impact of tariffs on inflation. Echoing some of his comments was Boston Fed Susan Collins, who said that the current state of monetary policy is necessary.The US docket revealed the latest US Consumer Confidence data by the Conference Board, with June’s print falling to 93.0, down from 98.0 in May and well below the expected reading of 100. According to Stephanie Guichard, Senior Economist for Global Indicators at the Conference Board, “The decline was broad-based across components, with consumers' views on both current conditions and future expectations contributing to the downturn.”Germany’s IFO Business Climate Index rose to 88.4 in June, up from 87.5 in May and slightly above the forecast of 88.3. Business expectations also showed improvement, climbing to 90.7 from 88.9, beating projections of 90.0. Despite the upbeat data, the Euro saw little reaction.Financial market players do not expect that the ECB will reduce its Deposit Facility Rate by 25 basis points (bps) at the July monetary policy meeting.Euro technical outlook: EUR/USD remains bullish with buyers targeting 1.1700 as next resistanceThe EUR/USD remains bullish, and after hitting a new year-to-date (YTD) high of 1.1641, further upside is expected in the near term. Price action confirms the trend, while the Relative Strength Index (RSI) suggests that consolidation lies ahead.The EUR/USD needs a daily close above 1.1650. A breach of the latter will expose the 1.1700, followed by the 1.1700 and 1.1800 figures, as the next key resistance levels. On the flipside, a daily close below 1.1600 could pave the way for testing 1.1550, followed by the 1.1500 mark. Once surpassed, the next support would be the weekly open at 1.1454. Euro FAQs What is the Euro? The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day.
EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%). What is the ECB and how does it impact the Euro? The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy.
The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa.
The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde. How does inflation data impact the value of the Euro? Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control.
Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money. How does economic data influence the value of the Euro? Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency.
A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall.
Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy. How does the Trade Balance impact the Euro? Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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