Forex News Timeline
18:21 BoE's Ramsden: Less concerned than other MPC members that disinflation will stall
Bank of England (BoE) Deputy Governor Dave Ramsden said on Tuesday that if evidence becomes stronger that inflation will undershoot the target, they can speed up rate cuts, per Reuters.
Bank of England (BoE) Deputy Governor Dave Ramsden said on Tuesday that if evidence becomes stronger that inflation will undershoot the target, they can speed up rate cuts, per Reuters.Key takeaways"Material uncertainty about how the UK economy is responding to shocks.""In the short term, for me focus is likely to remain on domestic side of the economy.""UK has a challenging fiscal environment.""Moves in gilt markets have been orderly.""Moves in UK 30 year gilt yields since April have been driven by US.""We remain very vigilant on markets.""I'm less concerned than other Monetary Policy Committee members that disinflation will stall."Market reactionGBP/USD clings to strong daily gains following these comments and trades at its highest level since February 2022 above 1.3630.
17:35 US CB Consumer Confidence Index declines to 93 in June
Consumer sentiment in the US deteriorated in June, with the Conference Board's Consumer Confidence Index falling to 93 from 98.4 in May.
CB Consumer Confidence Index declined by 5.4 points to 93 in June.USD Index stays deep in negative territory below 98.00.Consumer sentiment in the US deteriorated in June, with the Conference Board's Consumer Confidence Index falling to 93 from 98.4 in May.The Present Situation Index fell by 6.4 points to 129.1 in this period, while the Expectations Index declined by 4.6 points to 69.Assessing the survey's findings, "consumers were less positive about current business conditions than May," said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board. "Their appraisal of current job availability weakened for the sixth consecutive month but remained in positive territory, in line with the still-solid labor market."Market reaction The US Dollar Index stays under bearish pressure after this report and was last seen losing 0.55% on the day at 97.80.
17:27 USD/JPY sides below 145.00 as Yen recovers from five-week low
The Japanese Yen (JPY) extends its winning streak against the US Dollar (USD) on Tuesday, building on Monday’s gains as the Greenback stays on the defensive.
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USD/JPY is trading below the 145.00 mark at the time of writing, during American trading hours, and staying afloat above its 100-day Moving Average, which remains a key near-term support zone.
The Japanese Yen is now easing away from the five-week low it touched on Monday, as improving risk sentiment and softer Oil prices help the currency regain lost ground. Lower energy costs are viewed as supportive for Japan’s trade balance, adding to the Yen’s strength. Meanwhile, Japan’s benchmark 10-year government bond yield rose past 1.42% for a second straight session, buoyed by stronger risk appetite and calming geopolitical tensions that have dampened demand for safe-haven bonds.
Last week’s data revealed that Japan’s core inflation accelerated for the third consecutive month in May, climbing to 3.7% — its highest level since January 2023. The stubborn inflation trend has strengthened market expectations that the Bank of Japan may stay on its tightening path. At its June policy meeting, the central bank kept its benchmark rate unchanged at 0.5% but indicated a readiness to hike further, citing persistent price pressure as companies pass higher wage costs onto consumers.
On the US side, the weakness in the US Dollar stems from a combination of easing geopolitical tensions and dovish signals from the Federal Reserve (Fed). President Trump’s announcement of a ceasefire between Iran and Israel, which he dubbed “The 12-Day War,” helped calm markets and reduce safe-haven flows into the Greenback. Meanwhile, recent remarks from Fed officials have bolstered expectations for a possible rate cut as early as July, further weighing on the US Dollar Index (DXY), which is drifting lower toward 98.00 on Tuesday.
Looking ahead, traders will keep a close watch on Fed Chair Jerome Powell’s ongoing testimony before Congress for any fresh clues on the policy outlook. While Powell’s prepared remarks reiterated that the Fed sees no urgency to cut rates, market participants will scrutinize his live responses for any subtle shifts in tone. Any hints on the timing of a potential rate cut could influence US Dollar sentiment and shape near-term moves in USD/JPY.
Economic Indicator
Fed's Chair Powell testifies
Federal Reserve Chair Jerome Powell testifies before Congress, providing a broad overview of the economy and monetary policy. Powell's prepared remarks are published ahead of the appearance on Capitol Hill. Read more. Last release: Tue Jun 24, 2025 14:00 Frequency: IrregularActual: -Consensus: -Previous: -Source: Federal Reserve
17:23 GBP/USD nears 1.3600 as ceasefire fails, Powell tempers rate cut hopes
The Pound Sterling extended its gains versus the US Dollar on Tuesday, as the proposed ceasefire between Israel and Iran was violated by both parties, despite US President Donald Trump's warning. Nevertheless, the risk appetite remains strong, despite the ongoing developments in the Middle East.
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Nevertheless, the risk appetite remains strong, despite the ongoing developments in the Middle East. The GBP/USD trades above 1.3600, gaining over 0.65%, after printing a weekly high of 1.3626.Sterling climbs over 0.65% as markets stay risk-on despite Middle East flare-up and Fed pushback on July easingAside from geopolitical risks, the Fed Chair Jerome Powell said in prepared remarks for his testimony at the US Congress, that rate cuts can wait, as the central bank studies the impact of tariffs on the economy. He stated that “tariffs this year are likely to push up prices and weigh on economic activity,” adding that the impact could be short-lived or persistent.He pushed back against a previously dovish posture by Fed Governors Christopher Waller and Michelle Bowman. Last year, they were two of the most hawkish members, who, so far, had backed a rate cut in the July meeting.Recently, Cleveland Fed Beth Hammack, a hawk, revealed that rate cuts could be “on hold for quite some time.” She echoed previous words of Atlanta Fed President Raphael Bostic, who said that there’s no need to cut rates now and acknowledged that he sees just a 25 basis points (bps) of easing this year.US housing data showed that home prices rose 2.7% from the previous year in April. Across the pond, the UK economic docket was light, with the release of the CBI Industrial Trends Survey revealing that manufacturing output volumes fell in the quarter to June, from -25 to -23. The poll showed “Manufacturers expect output volumes to decline at a slower pace in the three months to June.”Bank of England Governor Dave Ramsden said that “cumulative evidence of material loosening in the labour market” influenced his decision at the latest BoE meeting. He said that the weakness in the labor market is getting his attention.Ahead, traders will eye Fed Chair Jerome Powell's testimony at the US House of Representatives.On Wednesday, the UK docket will feature speeches by members of the Bank of England's Monetary Policy Committee (MPC). In the US, Fed Chair Powell will appear at the US Senate.GBP/USD Price Forecast: Technical outlookThe GBP/USD remains upwardly biased, after briefly diving towards the 50-day SMA at 1.3407. Since then, the pair has climbed and appears poised to break decisively above the 1.3600 figure.Momentum remains bullish as depicted by the Relative Strength Index (RSI). However, traders should be aware that geopolitical risks loom. Hence, an escalation of the Middle East conflict could pave the way for a pullback.If GBP/USD weakens, the first support is seen at 1.3550, followed 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 -1.22% -1.53% -1.32% -0.36% -1.09% -1.24% -1.31% EUR 1.22% -0.33% -0.07% 0.88% 0.10% 0.00% -0.13% GBP 1.53% 0.33% 0.32% 1.21% 0.44% 0.32% 0.20% JPY 1.32% 0.07% -0.32% 0.95% 0.20% 0.13% -0.08% CAD 0.36% -0.88% -1.21% -0.95% -0.69% -0.89% -1.00% AUD 1.09% -0.10% -0.44% -0.20% 0.69% -0.13% -0.24% NZD 1.24% -0.00% -0.32% -0.13% 0.89% 0.13% -0.11% CHF 1.31% 0.13% -0.20% 0.08% 1.00% 0.24% 0.11% 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).
17:16 Bailey speech: Trade tariff impact on inflation is more ambiguous than impact on economic growth
While testifying before the Lords Economic Affairs Committee on Tuesday, Bank of England (BoE) Governor Andrew Bailey said the impact of trade tariffs on inflation is more ambiguous than the impact on economic growth, per Reuters.
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While testifying before the Lords Economic Affairs Committee on Tuesday, Bank of England (BoE) Governor Andrew Bailey said the impact of trade tariffs on inflation is more ambiguous than the impact on economic growth, per Reuters.Key quotes"Big turnaround overnight with the oil price.""Very unpredictable where US import tariffs are going to end up.""Market volatility in April meant we were looking globally at a difficult situation.""Saw a lot of short-term market positioning changes in April.""There was no point when there was real stress in markets in April.""We are seeing investors reassessing overweight position in US assets.""I think we are starting to see labour market softening.""Wage settlements are likely to come off.""NICS increase for employers seems to be affecting labour market."Market reactionGBP/USD preserves its bullish momentum on Tuesday and was last seen rising 0.7% on the day at 1.3620. BoE FAQs What does the Bank of England do and how does it impact the Pound? The Bank of England (BoE) decides monetary policy for the United Kingdom. Its primary goal is to achieve ‘price stability’, or a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP). How does the Bank of England’s monetary policy influence Sterling? When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls below target, it is a sign economic growth is slowing, and the BoE will consider lowering interest rates to cheapen credit in the hope businesses will borrow to invest in growth-generating projects – a negative for the Pound Sterling. What is Quantitative Easing (QE) and how does it affect the Pound? In extreme situations, the Bank of England can enact a policy called Quantitative Easing (QE). QE is the process by which the BoE substantially increases the flow of credit in a stuck financial system. QE is a last resort policy when lowering interest rates will not achieve the necessary result. The process of QE involves the BoE printing money to buy assets – usually government or AAA-rated corporate bonds – from banks and other financial institutions. QE usually results in a weaker Pound Sterling. What is Quantitative tightening (QT) and how does it affect the Pound Sterling? Quantitative tightening (QT) is the reverse of QE, enacted when the economy is strengthening and inflation starts rising. Whilst in QE the Bank of England (BoE) purchases government and corporate bonds from financial institutions to encourage them to lend; in QT, the BoE stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive for the Pound Sterling.
17:10 ECB's Lane: Still some distance to travel in relation to services inflation
European Central Bank chief economist Philip Lane said on Tuesday that there is still some distance to travel in relation to services inflation, per Reuters.
European Central Bank chief economist Philip Lane said on Tuesday that there is still some distance to travel in relation to services inflation, per Reuters.Key takeaways"We have enough confidence, bringing inflation to target is largely completed.""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.""It will be important to explore how alternative rate paths hold up in various plausible sensitivity and scenario analyses.""Primary task for monetary policymakers is to make sure that any temporary deviations from target do not turn into longer-term deviations."Market reactionEUR/USD largely ignores these comments and was last seen rising 0.2% on the day at 1.1600.
17:00 United States Richmond Fed Manufacturing Index meets forecasts (-7) in June
United States Richmond Fed Manufacturing Index meets forecasts (-7) in June
16:29 Gold falls as Israel-Iran ceasefire lifts risk appetite and Fed Powell testifies
Gold prices are falling on Tuesday as investors flee from safe-haven assets after the announcement of a ceasefire between Israel and Iran.
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Risk appetite was lifted after United States (US) President Donald Trump confirmed a ceasefire between Israel and Iran, posting on Truth Social: “THE CEASEFIRE IS NOW IN EFFECT. PLEASE DO NOT VIOLATE IT!” Despite the apparent breakthrough, Israeli Defense Minister Israel Katz ordered retaliatory strikes after claiming Iran violated the agreement hours after both nations agreed to the ceasefire, allegations that Tehran denies. With the Middle East conflict entering a fragile pause, attention turns to Federal Reserve (Fed) Chair Jerome Powell’s semiannual testimony before Congress at 14:00 GMT. Traders are closely watching his stance on inflation and the path for rate cuts, with July or September emerging as key potential months for such a move. Any dovish signal from Powell could renew support for Gold, which typically benefits from lower interest rates due to its non-yielding nature.Daily Digest market movers: Israel-Iran ceasefire, Fed expectations drive Gold pricesUS President Donald Trump announced the initial ceasefire between Israel and Iran on Monday evening during an address at Capitol Hill, stating that “Stability in the Middle East is essential for global peace.”The announcement followed Iranian missile strikes on US bases in Qatar, which were intercepted without casualties. The ceasefire has pressured Gold and Crude Oil prices as traders unwind risk hedges tied to potential disruptions in the Strait of Hormuz, a critical chokepoint for roughly 20% of global Oil supply. The reduced threat of supply disruption would help lower inflation expectations, a key theme for the Fed, which is facing pressure from Trump to cut interest rates.Although markets are pricing in two rate cuts this year, analysts are expecting the Fed to begin easing in September. Any changes to this narrative and these expectations could contribute to Gold’s next move.On Monday, Fed Governor Michelle Bowman said she was “open” to rate cuts if inflation continues to ease.The remarks echo similar comments from Fed Governor Christopher Waller last Friday. Waller noted in a CNBC interview that “we could do this as early as July.” According to the CME FedWatch Tool, the probability of a rate cut next month is at around 23%, up from 16% a week ago. Friday’s release of the Core Personal Consumption Expenditures Price Index (PCE), the Fed’s preferred inflation gauge, will also be key for market direction.Gold technical analysis: XAU/USD slips toward 50-day SMA supportXAU/USD is trading just above the 50-day Simple Moving Average (SMA) at $3,323 on Tuesday, as prices continue to digest the latest geopolitical developments and assess the Fed's rate path. With prices currently trading near $3,311 at the time of writing, the focus shifts to the $3,300 psychological support level.A break below this level may expose support at the 38.2% Fibonacci retracement of the April rally at $3,292, followed by the 50% retracement near $3,228. Resistance aligns at the 20-day SMA around $3,353 and the 23.6% Fibonacci level at $3,372. A break above $3,400 is needed to revive bullish momentum. The Relative Strength Index (RSI) has fallen to 47.97, indicating weakening upside pressure. 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.
16:24 Fed's Hammack: Policy could be on hold for quite some time as Fed seeks clarity
Federal Reserve (Fed) Bank of Cleveland President Beth Hammack said on Tuesday that the rate policy could remain on hold for quite some time as the Fed seeks clarity, per Reuters.
Federal Reserve (Fed) Bank of Cleveland President Beth Hammack said on Tuesday that the rate policy could remain on hold for quite some time as the Fed seeks clarity, per Reuters.Key takeaways"I don't see any imminent case to cut interest rates.""Fed has time to make next decision on monetary policy.""Would rather be slow and right than fast and wrong with monetary policy.""Possible tariffs may have one-time hit on inflation, but that’s hard to say right now.""Supported Fed’s decision to hold rates steady at June meeting.""Fed policy is modestly restrictive.""US economy has solid momentum, job market solid so far.""Still some ways to go to get inflation to 2% target.""Tariffs have added uncertainty to outlook."Market reactionThe US Dollar Index struggles to rebound following these comments and was last seen losing 0.25% on the day at 98.10.These comments received a neutral score of 5.6 from FXStreet Fed Speech Tracker. As a result, FXStreet Fed Sentiment Index inched higher to 106.1 from 105.8.
16:17 Canada Consumer Price Index - Core (MoM) fell from previous 0.4% to 0.2% in May
Canada Consumer Price Index - Core (MoM) fell from previous 0.4% to 0.2% in May
16:14 United States Redbook Index (YoY) dipped from previous 5.2% to 4.5% in June 20
United States Redbook Index (YoY) dipped from previous 5.2% to 4.5% in June 20
16:06 EUR/GBP Price Forecast: Bulls test key resistance as momentum indicators cool
The Euro (EUR) is slipping against the Pound today, putting the brakes on a solid run that saw buyers firmly in control for nearly two weeks. The EUR/GBP cross is edging lower, trading around 0.8527 during the American trading hours, down about 0.40% on the day.
EUR/GBP trades lower against the British Pound on Tuesday, snapping a steady winning streak that began earlier in June.The cross is edging lower, quoted around 0.8533 during the American trading hours, down about 0.40% on the day.RSI has eased from overbought territory and is drifting lower at 59.83, while the MACD remains slightly positive but shows signs of flattening momentum.The Euro (EUR) is slipping against the Pound today, putting the brakes on a solid run that saw buyers firmly in control for nearly two weeks. The EUR/GBP cross is edging lower, trading around 0.8527 during the American trading hours, down about 0.40% on the day.Zooming in on the daily chart, the broader trend structure remains constructive despite today’s short pullback. EUR/GBP continues to trace a well-respected rising channel that has guided price action since late January. Within this structure, buyers have consistently stepped in near the lower boundary and the 21-day EMA, which now sits close to 0.8496, cushioning dips.However, the pair is encountering resistance near the 0.8550 psychological level, which aligns with the 50% Fibonacci retracement of the April peak to the May low. This area, overlapping with the channel’s midline, is drawing profit-taking and testing the strength of the recent bullish momentum.Momentum signals suggest caution in the near term. The Relative Strength Index (RSI) has retreated from overbought levels and is currently at 59.83, implying the recent bullish push may be cooling off. Meanwhile, the MACD histogram remains in positive territory but hints at flattening momentum, signaling that the rally could stall without fresh catalysts.A sustained daily close above 0.8600 would validate the bullish case and open the path toward 0.8740 — the April high and channel ceiling. Conversely, if the pullback deepens, the 21-day EMA near 0.8496 provides immediate support, followed by stronger buying interest around the 38.2% Fib at 0.8504 and the lower channel boundary near 0.8400.
16:00 United States Housing Price Index (MoM) below expectations (0.1%) in April: Actual (-0.4%)
United States Housing Price Index (MoM) below expectations (0.1%) in April: Actual (-0.4%)
16:00 United States S&P/Case-Shiller Home Price Indices (YoY) came in at 3.4%, below expectations (4.2%) in April
United States S&P/Case-Shiller Home Price Indices (YoY) came in at 3.4%, below expectations (4.2%) in April
15:58 USD/CAD edges lower as Canada’s inflation steadies in May
The Canadian Dollar (CAD) is reacting to the latest Consumer Price Index (CPI) data released by Statistics Canada on Tuesday, which showed inflation steadying in May.
.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/CAD trades near 1.3710 as traders digest Canada’s latest inflation report.Canada’s BoC Core Consumer Price Index (CPI) data for May print in line with analyst forecasts.Bank of Canada (BoC) policy outlook - OIS market data shows a 38% probability of a rate hold at the July meeting.,The Canadian Dollar (CAD) is reacting to the latest Consumer Price Index (CPI) data released by Statistics Canada on Tuesday, which showed inflation steadying in May.USD/CAD is trading around 1.3710 following the release, with markets reassessing rate cut prospects.Canada CPI data summaryCanada’s May inflation data showed that the BoC Core Consumer Price Index (CPI) rose by 0.6% (MoM) in May, slightly above the previous reading of 0.5%. The YoY figure held steady at 2.5%. The headline CPI matched expectations, rising 0.6% (MoM) and 1.7% (YoY). The BoC Core CPI, which strips out volatile components such as food and energy, is viewed as a more accurate measure of underlying inflation. What does this mean for the Bank of Canada?With the BoC holding its key rate at 2.75% during the June policy meeting, BoC Governor Tiff Macklem raised concerns over tariffs and rising input costs. The Governor stated that the central bank is closely monitoring both the headline CPI and business sentiment.The stronger monthly core print signals persistent price pressures, which could lead the Bank of Canada to delay rate cuts as it continues to monitor inflation dynamics and their implications for monetary policy. With Core CPI still above the BoC'S 2% target, Canadian OIS market data shows a 38% probability of a rate hold at the July meeting.USD/CAD market reactionUSD/CAD to after the release, as traders dialed back expectations for BoC easing in the coming months unless the economy shows signs of weakening.The pair continues to trade between the 20-day Simple Moving Average (SMA), providing support at 1.3697, and the 50-day SMA, which acts as resistance at 1.3798.
Bank of Canada FAQs What is the Bank of Canada and how does it influence the Canadian Dollar? The Bank of Canada (BoC), based in Ottawa, is the institution that sets interest rates and manages monetary policy for Canada. It does so at eight scheduled meetings a year and ad hoc emergency meetings that are held as required. The BoC primary mandate is to maintain price stability, which means keeping inflation at between 1-3%. Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Canadian Dollar (CAD) and vice versa. Other tools used include quantitative easing and tightening. What is Quantitative Easing (QE) and how does it affect the Canadian Dollar? In extreme situations, the Bank of Canada can enact a policy tool called Quantitative Easing. QE is the process by which the BoC prints Canadian Dollars for the purpose of buying assets – usually government or corporate bonds – from financial institutions. QE usually results in a weaker CAD. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The Bank of Canada used the measure during the Great Financial Crisis of 2009-11 when credit froze after banks lost faith in each other’s ability to repay debts. What is Quantitative tightening (QT) and how does it affect the Canadian Dollar? Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Bank of Canada purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the BoC stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Canadian Dollar.
Bank of Canada FAQs What is the Bank of Canada and how does it influence the Canadian Dollar? The Bank of Canada (BoC), based in Ottawa, is the institution that sets interest rates and manages monetary policy for Canada. It does so at eight scheduled meetings a year and ad hoc emergency meetings that are held as required. The BoC primary mandate is to maintain price stability, which means keeping inflation at between 1-3%. Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Canadian Dollar (CAD) and vice versa. Other tools used include quantitative easing and tightening. What is Quantitative Easing (QE) and how does it affect the Canadian Dollar? In extreme situations, the Bank of Canada can enact a policy tool called Quantitative Easing. QE is the process by which the BoC prints Canadian Dollars for the purpose of buying assets – usually government or corporate bonds – from financial institutions. QE usually results in a weaker CAD. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The Bank of Canada used the measure during the Great Financial Crisis of 2009-11 when credit froze after banks lost faith in each other’s ability to repay debts. What is Quantitative tightening (QT) and how does it affect the Canadian Dollar? Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Bank of Canada purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the BoC stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Canadian Dollar.
15:30 Canada Consumer Price Index (MoM) above forecasts (0.5%) in May: Actual (0.6%)
Canada Consumer Price Index (MoM) above forecasts (0.5%) in May: Actual (0.6%)
15:30 Canada BoC Consumer Price Index Core (MoM): 0.6% (May) vs 0.5%
Canada BoC Consumer Price Index Core (MoM): 0.6% (May) vs 0.5%
15:30 Canada Consumer Price Index (YoY) meets forecasts (1.7%) in May
Canada Consumer Price Index (YoY) meets forecasts (1.7%) in May
15:30 Canada BoC Consumer Price Index Core (YoY) unchanged at 2.5% in May
Canada BoC Consumer Price Index Core (YoY) unchanged at 2.5% in May
15:30 United States Current Account registered at $-450.2B, below expectations ($-440B) in 1Q
United States Current Account registered at $-450.2B, below expectations ($-440B) in 1Q
15:12 Copper market tight at the short end, and in the medium term? – Commerzbank
The significant decline in available Copper stocks registered on the LME is also having an impact on the Copper market: The forward curve at the front end is in massive backwardation; the spot price for a ton of Copper climbed back above $10,000 yesterday, bringing the premium on the 3-month contrac
The significant decline in available Copper stocks registered on the LME is also having an impact on the Copper market: The forward curve at the front end is in massive backwardation; the spot price for a ton of Copper climbed back above $10,000 yesterday, bringing the premium on the 3-month contract to almost $380, its highest level since the record high in 2021, Commerzbank's commodity analyst Barbara Lambrecht notes. China's Copper boom may continue"Unlike on the aluminum market, however, the new LME measures do not appear to be having any effect here, as it is probably not individual market participants who are holding high positions, but rather the rise in the spot price is related to the current buying rush in the US due to the threat of US tariffs.""In addition to this short-term shortage on the market, the question of long-term supply continues to arise: Reports of possible deals with negative processing fees for Copper smelters have caused concern in this regard.""However, market sources now say that Chinese smelters are entering into negotiations for longer-term contracts with at least slightly positive processing fees. This is somewhat easing concerns that China's Copper boom could come to a rapid end."
15:05 JPY outshines G10 on policy shift – Scotiabank
The Japanese yen (JPY) is strengthening sharply, climbing 0.8% against the US Dollar (USD) and outperforming most G10 currencies, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
The Japanese yen (JPY) is strengthening sharply, climbing 0.8% against the US Dollar (USD) and outperforming most G10 currencies, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report. Tighter spreads fuel JPY gains"The JPY is up an impressive 0.8% vs. the USD and outperforming nearly all of the G10 currencies on the back of a meaningful shift in the outlook for relative central bank policy. Spreads are driving JPY gains, allowing it to maintain its relative outperformance in an environment of easing geopolitical tensions."
15:00 Mexico 1st half-month Inflation below forecasts (0.12%) in June: Actual (0.1%)
Mexico 1st half-month Inflation below forecasts (0.12%) in June: Actual (0.1%)
15:00 USD/INR extends losses as Iran-Israel ceasefire weighs on Oil, US Dollar
The USD/INR pair falls on Tuesday for a third consecutive day, as a pullback in global Crude Oil prices and a weaker Greenback improved the outlook for India’s trade balance.
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Sentiment improved after US President Donald Trump announced on social media that Iran and Israel have agreed to a ceasefire, easing the tensions that had kept energy markets on edge in the past days.At the time of writing, USD/INR trades softer near 86.00 during the European session, down around 0.50% on the day as the Rupee extends its modest winning streak. Meanwhile, the US Dollar Index (DXY) remains under pressure, drifting lower toward 97.95 — close to its lowest level in nearly three years — as easing geopolitical tensions cap demand for the Greenback.Global markets welcomed the ceasefire news, taking some pressure off safe-haven assets and energy prices. US President Donald Trump termed it a “complete and total" ceasefire via Truth Social, stating that Iran would halt hostilities first, with Israel to join 12 hours later — a framework he said was brokered through Qatar with input from senior US officials, including VP Vance and Secretary Rubio. Israeli Prime Minister Netanyahu backed the plan, stating his government had “achieved military goals” and would honor the US-brokered pause.Iran’s Foreign Minister Abbas Araghchi at first rejected talk of a formal agreement but later hinted at de-escalation, praising Iran’s armed forces for “fighting until the very last minute” and state media reporting that the truce had begun. Despite Israel reaffirming its commitment to the truce, some officials quickly accused Iran of breaching the terms — accusations Tehran has firmly denied. While this de-escalation has tempered geopolitical risk premiums, markets remain watchful for any renewed flare-up that could quickly revive volatility in Oil and currency markets.Market Movers: Rupee rebounds as equities firmThe Indian Rupee, which had been under pressure since the Iran–Israel conflict erupted — slipping to a three-month low — is now staging a solid recovery. Several global and domestic factors, including easing geopolitical tensions, subdued Oil prices, and a softer US Dollar, have driven the sharp rebound.India’s equity benchmarks surged as investor optimism rose, driven by improved risk sentiment and lower Oil prices. The BSE Sensex jumped nearly 1% intraday, briefly adding over 1,100 points before trimming gains to close about 158 points higher at 82,744. Similarly, the NSE Nifty climbed above the 25,200 mark during the session and settled modestly higher above 25,000. Hopes for a lasting ceasefire in the Middle East and a softer Greenback supported buying across most sectors, although energy shares lagged due to weaker crude Oil prices.Following Monday’s sharp sell-off, Oil prices extended losses early on Tuesday, with Brent briefly slipping below the $70 mark for the first time in weeks as optimism over an Iran-Israel ceasefire trimmed the geopolitical risk premium. However, prices later pared some of the intraday decline — at the time of writing, Brent is trading near $68.66 per barrel, while WTI holds around $66.50. The softer energy market continues to ease cost pressures for Oil-importing countries like India, offering support to the Rupee and broader risk sentiment, though traders remain cautious about the fragile nature of the truce.S&P Global Ratings raised India’s GDP growth projection for the current fiscal year to 6.5%, up from its previous estimate of 6.3%, citing supportive factors such as falling crude Oil prices, the prospect of monetary easing, and expectations of a normal monsoon season. The agency also noted that while geopolitical tensions persist, they are unlikely to create “significant pressure” on the Rupee or stoke inflation risks, offering an encouraging backdrop for the currency and the broader economy.S&P economist Vishrut Rana told PTI that energy costs remain lower than last year — Brent crude averaged around $85 a barrel a year ago, compared to current levels. “This will help contain both current account outflows and domestic energy price pressures — while energy prices may rise moderately, the path of food prices will have a higher impact on inflation. Overall, we do not expect significant pressure on the Indian rupee or inflation,” Rana added.S&P’s upgraded FY2026 growth estimate for India aligns with the Reserve Bank of India’s projection, pegging GDP expansion at 6.5%. Alongside stronger growth, S&P forecasts that India’s inflation will moderate to an average of 4% in 2025, easing from 4.6% in 2024.The US Dollar Index (DXY) is trading on a softer footing as markets brace for fresh policy clues from the Federal Reserve (Fed). Recent comments from Fed officials, including Vice Chair Michelle Bowman and Governor Christopher Waller, have strengthened expectations that rate cuts could come as soon as July. All eyes are now on Fed Chair Jerome Powell’s testimony before Congress later on Tuesday, which traders hope will provide clearer guidance on the policy path ahead.Technical analysis: USD/INR softens after triangle breakout, EMA support in focusFrom a technical perspective, USD/INR broke out of a months-long triangle pattern earlier in June, confirming an upside bias. The pair surged past the descending trendline resistance but quickly ran into selling pressure near 86.80–87.00. This zone has capped further gains, resulting in a modest pullback over the past three days.The pair is now hovering just above its 21-day Exponential Moving Average (EMA), which serves as immediate support at around 85.90. Holding this level could help bulls regroup for another attempt at the recent high near 86.50, while a break below might expose the next support around 85.50 and the triangle’s upper trendline retest.Momentum signals are showing early signs of fatigue, indicating potentially choppy price action in the near term. The daily Relative Strength Index (RSI), which recently peaked above 67, has slipped back toward the neutral 50 zone, suggesting that the bullish momentum is losing steam but not yet fully reversing. If buyers defend the EMA support, the pair could maintain a mild upward bias. However, a sustained drop below the 85.90–85.70 area might encourage further profit-taking, dragging USD/INR back inside the prior consolidation range. Indian economy FAQs How does the Indian economy impact the Indian Rupee? The Indian economy has averaged a growth rate of 6.13% between 2006 and 2023, which makes it one of the fastest growing in the world. India’s high growth has attracted a lot of foreign investment. This includes Foreign Direct Investment (FDI) into physical projects and Foreign Indirect Investment (FII) by foreign funds into Indian financial markets. The greater the level of investment, the higher the demand for the Rupee (INR). Fluctuations in Dollar-demand from Indian importers also impact INR. What is the impact of Oil prices on the Rupee? India has to import a great deal of its Oil and gasoline so the price of Oil can have a direct impact on the Rupee. Oil is mostly traded in US Dollars (USD) on international markets so if the price of Oil rises, aggregate demand for USD increases and Indian importers have to sell more Rupees to meet that demand, which is depreciative for the Rupee. How does inflation in India impact the Rupee? Inflation has a complex effect on the Rupee. Ultimately it indicates an increase in money supply which reduces the Rupee’s overall value. Yet if it rises above the Reserve Bank of India’s (RBI) 4% target, the RBI will raise interest rates to bring it down by reducing credit. Higher interest rates, especially real rates (the difference between interest rates and inflation) strengthen the Rupee. They make India a more profitable place for international investors to park their money. A fall in inflation can be supportive of the Rupee. At the same time lower interest rates can have a depreciatory effect on the Rupee. How does seasonal US Dollar demand from importers and banks impact the Rupee? India has run a trade deficit for most of its recent history, indicating its imports outweigh its exports. Since the majority of international trade takes place in US Dollars, there are times – due to seasonal demand or order glut – where the high volume of imports leads to significant US Dollar- demand. During these periods the Rupee can weaken as it is heavily sold to meet the demand for Dollars. When markets experience increased volatility, the demand for US Dollars can also shoot up with a similarly negative effect on the Rupee.
15:00 Mexico 1st half-month Core Inflation came in at 0.22%, above forecasts (0.18%) in June
Mexico 1st half-month Core Inflation came in at 0.22%, above forecasts (0.18%) in June
14:56 GBP is ignoring softer CBI sentiment – Scotiabank
Pound Sterling (GBP) is up a notable 0.6% vs. the US Dollar (USD), extending Monday’s impressive gains and pushing back toward its recent multi-year high from mid-June, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
Pound Sterling (GBP) is up a notable 0.6% vs. the US Dollar (USD), extending Monday’s impressive gains and pushing back toward its recent multi-year high from mid-June, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report. GBP ignores softer CBI sentiment, threatens fresh multi-year highs"CBI business sentiment figures were slightly softer than expected, however the market appears to be ignoring the data and setting its sights on the outlook for relative central bank policy. Yield spreads are providing GBPUSD with a fundamental lift, largely reflecting renewed dovish expectations for the Fed. "This week’s release calendar is light, leaving the focus squarely centered on central bank expectations and the relatively heavy BoE speaking schedule. The last two sessions have provided GBPUSD with a meaningful recovery and a push back toward its recent multi-year highs from mid-June." "The 50 day MA (1.3412) has once again been confirmed as an important level of medium-term support, and we look to near-term support in the 1.1520-1.1550 area. We see little additional longer-term resistance ahead of 1.3750."
14:54 CAD underperforms but charts point to recovery – Scotiabank
The Canadian Dollar (CAD) is tracking a little higher on the session, with the broader drop in the USD and rebound in risk appetite overshadowing the sharp slide in crude oil prices, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
The Canadian Dollar (CAD) is tracking a little higher on the session, with the broader drop in the USD and rebound in risk appetite overshadowing the sharp slide in crude oil prices, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report. Support for USD/CAD is 1.3695"CAD correlations with stocks and crude remain weak and statistically insignificant on our rolling 1m study of daily returns. The CAD failed to benefit from the jump in crude oil prices amid the recent Gulf tensions and its performance rather reflected the broader swings in the USD." "If geo-political tensions do ease on a sustained basis and the broader trend lower in the USD extends, the CAD should be able to realign with our fair value estimate (1.3662 currently) shortly. The USD’s retreat from the intraday high just under 1.38 yesterday looks meaningful, leaving a bearish 'doji' candle on the daily chart." "A net loss for the USD today should reinforce the turn lower in the USD from the 40-day MA (1.3785) resistance zone tested yesterday. Support for USD/CAD is 1.3695 ahead of a drop back to 1.3635."
14:41 Gold price resilient thanks to speculation about US interest rate cuts – Commerzbank
While the Oil price fell significantly after Iran's counterattack, which was widely seen as symbolic rather than a step towards further escalation of the conflict, the Gold price remained resilient yesterday, Commerzbank's Head of FX and Commodity Research Thu Lan Nguyen notes.
While the Oil price fell significantly after Iran's counterattack, which was widely seen as symbolic rather than a step towards further escalation of the conflict, the Gold price remained resilient yesterday, Commerzbank's Head of FX and Commodity Research Thu Lan Nguyen notes. Gold can be back above the $3,400 on a permanent basis"It only came under greater pressure this morning after US President Trump announced a ceasefire between Israel and Iran. The initial resilience of the precious metal is likely to have been due to speculation about US interest rate cuts, which was fuelled by comments from Fed Governor Michelle Bowman. Bowman would support an interest rate cut as early as next month if inflation remains contained. In both April and May, US inflation fell short of expectations, reducing the risks of it spiralling out of control.""Bowman seems to share this assessment, pointing out that the effects of US tariffs are likely to take longer to materialise and be less severe than expected. She also assumes that the tariffs will tend to be lower than originally announced as a result of the current negotiations with US trading partners. Bowman is now the second member of the Board of Governors, alongside Christopher Waller, to have raised the possibility of an interest rate cut in July." "This is relevant because the Board of Governors usually votes unanimously – dissenters are rather rare (although Bowman was recently one of them). A rate cut in July is only priced in at just over 20% in Fed Fund Futures, while one in September is priced in at almost 100%. A potentially earlier-than-expected US rate cut could lift Gold back above the $3,400 per troy ounce mark on a permanent basis."
14:36 US Dollar Index (DXY) consolidates losses below 97.80 with Fed's Powell on focus
The US Dollar is one of the worst performers on Tuesday, hammered by weaker demand for safe assets, after the ceasefire between Israel and Iran and higher hopes for further Fed easing in the coming months.The DXY, which measures the value of the US Dollar against the world’s six most traded currenci
.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 has depreciated by more than 1.3% from Monday's highs.Risk appetite and dovish comments from Fed officials keep USD's upside attempts limited.Fed Powell's testimony to Congress is likely to set the US Dollar's near-term direction.The US Dollar is one of the worst performers on Tuesday, hammered by weaker demand for safe assets, after the ceasefire between Israel and Iran and higher hopes for further Fed easing in the coming months.
The DXY, which measures the value of the US Dollar against the world’s six most traded currencies, has given away most of the last two weeks’ gains on a nearly 1.4% reversal from Monday’s highs. Price action is approaching the three-year low, at 97.13, with upside attempts capped below 97.80 so far.
US President Donald Trump boosted investors’ appetite for risk late on Monday with the announcement of a ceasefire in the Middle East, which sent the US Dollar and other safe havens tumbling.
Tehran has denied Israel's accusations of a violation of the ceasefire. Tel Aviv has vowed a strong response to any attack but, so far, market sentiment remains positive, with European stocks in green and Oil prices more than $10 below Monday’s highs. In this context, the US Dollar is likely to be on its back foot.A dovish Fed added pressure on the US DollarIf this was not enough, the recent dovish comments by Fed officials have heightened hopes of a rate cut in July or, most likely, in September, and have increased pressure on the USD.On Monday, Fed Vice Chair for Supervision, Michelle Bowman joined her colleague Christopher Waller in his call for a rate cut in July. The inflationary impact of tariffs is likely to be over than expected, said Bowman, and this would allow the bank to act to support a deteriorating labour market.Against this backdrop, Fed Chairman Jerome Powell will testify to Congress later today to explain the bank’s plans to navigate a complex outlook of softer growth and higher price pressures. Investors will be looking for dovish signs to confirm an upcoming rate cut. 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. Congress
The DXY, which measures the value of the US Dollar against the world’s six most traded currencies, has given away most of the last two weeks’ gains on a nearly 1.4% reversal from Monday’s highs. Price action is approaching the three-year low, at 97.13, with upside attempts capped below 97.80 so far.
US President Donald Trump boosted investors’ appetite for risk late on Monday with the announcement of a ceasefire in the Middle East, which sent the US Dollar and other safe havens tumbling.
Tehran has denied Israel's accusations of a violation of the ceasefire. Tel Aviv has vowed a strong response to any attack but, so far, market sentiment remains positive, with European stocks in green and Oil prices more than $10 below Monday’s highs. In this context, the US Dollar is likely to be on its back foot.A dovish Fed added pressure on the US DollarIf this was not enough, the recent dovish comments by Fed officials have heightened hopes of a rate cut in July or, most likely, in September, and have increased pressure on the USD.On Monday, Fed Vice Chair for Supervision, Michelle Bowman joined her colleague Christopher Waller in his call for a rate cut in July. The inflationary impact of tariffs is likely to be over than expected, said Bowman, and this would allow the bank to act to support a deteriorating labour market.Against this backdrop, Fed Chairman Jerome Powell will testify to Congress later today to explain the bank’s plans to navigate a complex outlook of softer growth and higher price pressures. Investors will be looking for dovish signs to confirm an upcoming rate cut. 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. Congress
14:32 EUR is extending Monday’s recovery gains – Scotiabank
The Euro (EUR) is up a modest 0.2% vs. the US Dollar (USD), consolidating around 1.16 and threatening a break of its recent multi-year high, Scotiabank's Chief FX Strategists Shaun Osborne EUR and Eric Theoret report.
The Euro (EUR) is up a modest 0.2% vs. the US Dollar (USD), consolidating around 1.16 and threatening a break of its recent multi-year high, Scotiabank's Chief FX Strategists Shaun Osborne EUR and Eric Theoret report. EUR is threatening fresh multi-year high"Fundamentals are once again shifting positively for the EUR, as yield spreads offer support on the back of a fade in easing expectations at the ECB and a renewed pricing of cuts from the Fed. Germany’s IFO business sentiment figures were largely in line with expectations, offering little in terms of near-term price action.""The EUR’s primary near-term drivers will remain the broader market’s tone (geopolitics) and the outlook for relative central bank policy. Monday’s recovery was impressive, as the bullish outside day provided for a meaningful recovery from the mid-1.14s toward the mid -June (multi-year) high around 1.16." "Momentum is once again firmly bullish, with an RSI back in the mid-60s (64). We continue to highlight the importance of the 50 day MA (1.1372) as a level of medium-term support. The near-term range is likely to be defined by support in the low 1.15s and resistance above 1.1620. Additional resistance is limited ahead of the 1.1680-1.1700 area."
14:31 Dow Jones futures advance on Israel-Iran truce, increase in Fed dovish bets
Dow Jones futures gain sharply during the European trading session on Tuesday due to multiple tailwinds: ceasefire between Israel and Iran, and dovish commentary from a slew of Federal Reserve (Fed) officials, including Fed Vice Chair Michelle Bowman, Governor Christopher Waller, and Chicago Fed Pre
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S&P 500 futures added 47 points and rises to near 6,072.The agreement of a ceasefire between Tel Aviv and Tehran after an aerial war for 12 calendar days has increased demand of riskier assets worldwide. During European trading hours, United States (US) President Donald Trump stated in a post on Truth.Social that a truce between two Middle East nations has become effective now and urged them not to violate the same. “The ceasefire is now in effect. Please do not violate it!" Trump wrote.The ceasefire announcement has apparently led to a sharp decline in the appeal of safe-haven assets, such as the US Dollar (USD). The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, slumps to near 98.00, the lowest level seen in a week.Another reason behind rising US equity futures is a sharp decline in the Oil price. Lower energy prices often lead to cooling price pressures, a move that supports interest rate cuts from the Federal Reserve (Fed). Interest rate cuts by the Fed bodes well for the equity market as companies get the opportunity to raise cheaper funds.Meanwhile, Fed officials have already started arguing in favor of reducing interest rates soon, while expressing confidence that the impact of the Donald Trump’s tariff policy will be limited and citing labor market risks.On Monday, Fed Vice Chair Michelle Bowman said, “It is time to consider adjusting the policy rate, and added, “We should put more weight on downside risks to the job market going forward.” Bowman also showed openness for lowering interest rates in the July policy meeting.The dovish commentary from Fed officials has forced traders to raise bets supporting interest rate cuts in the July meeting. According to the CME FedWatch tool, the probability for the Fed to reduce interest rates next month has increased to 22.7% from 14.5% recorded on Friday.For fresh cues on the monetary policy outlook, investors await Fed Chair Jerome Powell’s two-day testimony before the US House Financial Services Committee, which will be started from Tuesday. 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.
14:24 USD slides as gulf concerns ease – Scotiabank
While the 'ceasefire' between Israel and Iran declared by President Trump yesterday looks fragile—Israel is reportedly ordering a new strike on Iran after an alleged breach of the truce—markets continue to trade as if the conflict is over.
While the 'ceasefire' between Israel and Iran declared by President Trump yesterday looks fragile—Israel is reportedly ordering a new strike on Iran after an alleged breach of the truce—markets continue to trade as if the conflict is over. Crude oil, which traded as high as $78.50 yesterday, is off earlier session lows but is still down some 14-15% from Monday’s high, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report. USD weakens, crude plunges and stocks rebound on 'ceasefire'"Global stocks are strengthening, bonds have eased— although Treasurys are steady to slightly firmer—and the USD is trading sharply lower across the board. Recent underperformers—the JPY, AUD and NZD—are outperforming on the day. The CAD and NOK are firmer versus the USD but sit at the foot of the overnight performance table. Markets reason that yesterday’s weak retaliation by Iran for the US attack on it nuclear facilities reflected either very diminished or limited capabilities or represented a deliberately weak response. "Either way, investors appear confident that the uncertainty created by the situation over the past couple of weeks is likely to recede as both parties reduce military posturing. After concentrating his attention on the Middle East, President Trump is refocusing on domestic issues, repeating his criticism of 'too late' Fed Chair Powell ahead of his congressional appearance today, hoping lawmakers 'really work over' the chair. Powell is one of half a dozen or so Fed officials speaking today. His testimony is unlikely to shift from the cautious outlook for policy amid ongoing uncertainty over the impact of tariffs, despite the president’s comments." "Atlanta Fed President Bostick commented that there was “no rush” to ease policy in a Reuters interview this morning. On the charts, hefty USD losses yesterday and additional weakness today is likely to stoke up bearish momentum in the USD again after last week’s brief consolidation. Key support is 97.60 for the DXY now while resistance is 98.25/35. We still think broader risks point towards a slide in the DXY to the 90-95 range in the coming months."
13:57 Silver Price Forecast: XAG/USD has a key support level at $35.50
Silver (XAG/USD) is bouncing up from a key support area at $35.50 on Tuesday, following a three-day reversal from multi-year highs at $37.35.
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Investors are celebrating what the US President, Donald Trump, announced as a “complete and total ceasefire”, which only hours later is under threat amid accusations of violation from Iran. Israel has vowed a strong response in case of attack, but so far, risk appetite prevails.
On the macroeconomic domain, further calls for Fed easing, this time from the Vice Chair for Supervision Bowman, have underscored the divergence within the Federal Reserve’s committee and increased bearish pressure on the US Dollar ahead of Powell’s testimony to Congress, due later today.XAG/USD: The $35.50 is the neckline of a bearish H&S formationA look at the 4-hour charts, and we see the pair moving without a clear bias, with upside attempts limited at below Monday’s high, at $36.40. The Doji candles on the daily chart indicate a hesitant market following a three-day reversal from long-term highs.
The broader trend remains positive, but the lower highs this week anticipate a potential Head & Shoulders pattern, which is often a signal of a trend shift. A break of the neckline, at $35.50, suggests that there is room for a deeper correction, aiming at $34.10 (June 4 low) and the $32.70 area, which held prices on May 22, 27, 28 and 30.XAG/USD 4-Hour Chart 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.
Investors are celebrating what the US President, Donald Trump, announced as a “complete and total ceasefire”, which only hours later is under threat amid accusations of violation from Iran. Israel has vowed a strong response in case of attack, but so far, risk appetite prevails.
On the macroeconomic domain, further calls for Fed easing, this time from the Vice Chair for Supervision Bowman, have underscored the divergence within the Federal Reserve’s committee and increased bearish pressure on the US Dollar ahead of Powell’s testimony to Congress, due later today.XAG/USD: The $35.50 is the neckline of a bearish H&S formationA look at the 4-hour charts, and we see the pair moving without a clear bias, with upside attempts limited at below Monday’s high, at $36.40. The Doji candles on the daily chart indicate a hesitant market following a three-day reversal from long-term highs.
The broader trend remains positive, but the lower highs this week anticipate a potential Head & Shoulders pattern, which is often a signal of a trend shift. A break of the neckline, at $35.50, suggests that there is room for a deeper correction, aiming at $34.10 (June 4 low) and the $32.70 area, which held prices on May 22, 27, 28 and 30.XAG/USD 4-Hour Chart 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.
13:36 Gold Price Forecast: XAU/USD slides below 20-day EMA as Israel-Iran call ceasefire
Gold price (XAU/USD) plummets to near $3,320 during the European trading session on Tuesday. The yellow metal faces a sharp selling pressure as safe-haven assets are underperforming after the announcement of a ceasefire between Israel and Iran.
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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.
13:22 Kazakhstan still producing far too much oil in June – Commerzbank
Kazakhstan's overproduction is probably the main reason for the OPEC+ change in production strategy and the rapid reversal of voluntary production cuts, Commerzbank's commodity analyst Barbara Lambrecht notes.
Kazakhstan's overproduction is probably the main reason for the OPEC+ change in production strategy and the rapid reversal of voluntary production cuts, Commerzbank's commodity analyst Barbara Lambrecht notes. Oil prices are likely to fall further"The situation remains unchanged ahead of the production decision due in early July: Reuters quotes the Kazakh Energy Ministry as saying that oil and condensate production in June would rise by around 6% from the previous month to 2.14 million barrels per day. This would mean that Kazakhstan would produce significantly above the agreed level for another month, even though condensates are excluded from the production restrictions.""If, as a result, daily OPEC+ production is increased by a good 400,000 barrels for the fourth month in a row from August, there is a risk of a massive oversupply on the market by autumn at the latest. As soon as the stronger demand in the summer months subsides and if geopolitical risks do not increase again, oil prices are likely to fall further."
13:18 Is it a ceasefire if Trump says so? – Danske Bank
Middle East is back from the brink, or is it? The situation has been fluid since Israel launched its attack on Israel on the 13th of June. Iran immediately responded by launching a missile barrage in Israel.
Middle East is back from the brink, or is it? The situation has been fluid since Israel launched its attack on Israel on the 13th of June. Iran immediately responded by launching a missile barrage in Israel. Israel managed to achieve air superiority amazingly fast, and thereafter, was able to hammer Tehran with cost-efficient air bombardment, while Iran was forced to deplete its precious missile stockpile, Danske Bank's FX analysts report. Middle East escalation to divert the attention from the Russian-Ukraine conflict"For a few days, it really looked like the conflict could spiral out of control as on the 22nd of June the US joined Israel and struck the Iranian nuclear sites, including the heavily fortified Fordo plant. Iran's response to the US attack, however, turned out much softer than feared. On 23rd of June, Iran attacked the largest US base in the region, the one in Qatar. But as the attack was pre-warned and there were no casualties, the US rightly interpreted Iran's move as de-escalatory, and President Trump soon announced a ceasefire that would also involve Israel. The oil market immediately priced out the geopolitical risk premium.""So, from a situation where the whole world was afraid that Iran could go as far as closing the Strait of Hormuz, to a situation where a fragile truce prevails. As Israel has already accused Iran of violating the ceasefire, we are not yet fully convinced that the danger is over. Israeli PM Netanyahu (but also Trump) has hinted that he wants to topple the Islamic regime, and if that is the case, their job is not yet finished. To prepare for a potential re-escalation, please read our Research Global: What if Iran closes the Strait of Hormuz? 22 June.""Apart from Middle East, we also discuss EU-China trade tensions that seem to be on the rise again. Tensions are also on the rise in the South China Sea. There is no progress in Ukraine peace talks and we have updated our scenarios accordingly to reflect a higher probability that the war will drag on. The more the situation escalates in Middle East, the attention is diverted away from the continued Russian aggression towards Ukraine."
13:14 EUR/USD surges above 1.16 on ceasefire hopes – Commerzbank
According to US President Trump, there is allegedly a ceasefire between Israel and Iran. First, Iran is to lay down its weapons for 12 hours, followed by Israel for 12 hours, so that the war will be over within 24 hours.
According to US President Trump, there is allegedly a ceasefire between Israel and Iran. First, Iran is to lay down its weapons for 12 hours, followed by Israel for 12 hours, so that the war will be over within 24 hours. However, the situation remains precarious, as there is reportedly no agreement yet and no response from Israel, with the military reporting further attacks from Iran. Nevertheless, the markets reacted immediately to this news, with the dollar falling (EUR/USD jumped back above 1.16) and oil prices falling, Commerzbank's FX analyst Antje Praefcke notes. USD to trade softly in the medium term"The US Dollar had managed to appreciate across the board. This is primarily due to rising oil prices and the resulting improvement in the US terms of trade. However, I also see a certain degree of appreciation in the dollar's role as a safe haven. Confidence in this function of the US dollar has certainly been dented, but it is clearly still holding up to a certain extent in times of military conflict. The US demonstrated its military strength once again on Sunday. But I can also think of another reason why the dollar may have gained ground: the market may believe that things are not as bad in the US as they appear.""If there are real signs of a détente or even an end to the Middle East conflict, Trump can once again focus on his 'enemy of the state,' Fed Chair Jerome Powell, who will explain the Fed's monetary policy at his semi-annual testimony before the House Committee on Financial Services today. It will be interesting to see how vehemently he defends his position and that of the FOMC against government pressure for lower interest rates. Pressure usually generates counter-pressure. In this respect, Powell may well convey his convictions clearly and unambiguously. If Powell comes across this way, the dollar could receive another short boost, especially if, in the end, there might not be a détente in the Middle East conflict.""In principle, we stick to our view that the structural factors weighing on the dollar remain in place. Therefore, a correction in the USD like the one in the wake of the Middle East conflict is possible, but in the medium term we continue to expect a soft USD."
13:10 Fed's Bostic: No need to cut rates now
Atlanta Federal Reserve (Fed) President Raphael Bostic told Reuters on Tuesday that the Fed does not need to cut the policy rate now, noting that inflation risks remain as businesses run out of ways to postpone tariff driven price hikes.
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Atlanta Federal Reserve (Fed) President Raphael Bostic told Reuters on Tuesday that the Fed does not need to cut the policy rate now, noting that inflation risks remain as businesses run out of ways to postpone tariff driven price hikes.Key takeaways"Expecting a single quarter of a percentage point reduction late this year.""Business officials have become less pessimistic, feel they can manage through tariffs, but say price increases are just a matter of time.""Labor market remains solid, consumption is still resilient.""Expecting economic growth slowing to 1.1% this year, inflation rising to 2.9%."Market reactionThe US Dollar (USD) edged slightly higher with the immediate reaction to these comments and was last seen losing 0.33% on the day at 98.03.Bostic's remarks received a neutral/hawkish score of 6.0 from FXStreet Fed Speech Tracker. Meanwhile, FXStreet Fed Sentiment Index rose to 105.8 from 105.2. 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.
13:06 USD/CNH: Likely moves into a 7.1620/7.2200 – UOB Group
US Dollar (USD) could edge lower against Chinese Yuan (CNH), but any decline is unlikely to break below the major support at 7.1620. In the longer run, USD has likely moved into a 7.1620/7.2200 range trading phase, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
US Dollar (USD) could edge lower against Chinese Yuan (CNH), but any decline is unlikely to break below the major support at 7.1620. In the longer run, USD has likely moved into a 7.1620/7.2200 range trading phase, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. USD/CNH has a change of edging lower24-HOUR VIEW: "We expected USD to 'trade in a 7.1750/7.1950 range' yesterday. We were not wrong, even though USD traded in a narrower range than expected (7.1754/7.1925). 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." 1-3 WEEKS VIEW: "Our latest narrative was 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.' Since then, USD has traded mostly sideways, and our narrative remains unchanged."
13:02 NBH to hold steady at 6.50% as inflation risks linger – BBH
National Bank of Hungary is widely expected to keep rates steady at 6.50%, BBH FX analysts report.
National Bank of Hungary is widely expected to keep rates steady at 6.50%, BBH FX analysts report. Hungary’s Central Bank set for 8th straight rate hold"At the last May 27 meeting, the bank decided unanimously to leave the base rate unchanged at 6.50%, marking the 8th consecutive hold since September 2024. The bank also showed no signs of departing from its hold stance." "The bank reiterated that 'maintaining tight monetary conditions is warranted' while Governor Varga warned that rates could remain at the current level for a 'an extended period.' Nevertheless, the swaps market continues to price in 50bps of easing over the next twelve months.
13:01 AUD/USD climbs to fresh weekly highs above 0.6500 amid a risk-on mood
The Australian Dollar is one of the strongest performers among major currencies on Tuesday.
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US President Trump boosted investors’ optimism on Monday, announcing an agreement between Israel and Iran to cease all hostilities. Oil plunged on the news, and safe-haven assets like the US Dollar tumbled to the benefit of riskier-perceived currencies like the AUD.The Fed returns to the focusBeyond that, the Fed Vice Chair for Supervision, Michelle Bowman, affirmed that the effect of tariffs on inflation is likely to be smaller than expected and that the bank should consider cutting interest rates as soon as July.These comments echo the views expressed by Christopher Waller on Friday and highlight a divergence on the Federal Reserve’s committee. Investors have ramped up bets on rate cuts in the next months, which is adding pressure on the US Dollar
Australian business activity improves.
In this context, the focus today is on Fed Chairman Powell, who will have to defend his wait-and-see policy in his Testimony to Congress, due later today. Investors will be looking for signs of a tone change to confirm hopes of further rate cuts in July or September. Economic Indicator Fed's Chair Powell testifies Federal Reserve Chair Jerome Powell testifies before Congress, providing a broad overview of the economy and monetary policy. Powell's prepared remarks are published ahead of the appearance on Capitol Hill. Read more. Next release: Tue Jun 24, 2025 14:00 Frequency: Irregular Consensus: - Previous: - Source: Federal Reserve
US President Trump boosted investors’ optimism on Monday, announcing an agreement between Israel and Iran to cease all hostilities. Oil plunged on the news, and safe-haven assets like the US Dollar tumbled to the benefit of riskier-perceived currencies like the AUD.The Fed returns to the focusBeyond that, the Fed Vice Chair for Supervision, Michelle Bowman, affirmed that the effect of tariffs on inflation is likely to be smaller than expected and that the bank should consider cutting interest rates as soon as July.These comments echo the views expressed by Christopher Waller on Friday and highlight a divergence on the Federal Reserve’s committee. Investors have ramped up bets on rate cuts in the next months, which is adding pressure on the US Dollar
Australian business activity improves.
In this context, the focus today is on Fed Chairman Powell, who will have to defend his wait-and-see policy in his Testimony to Congress, due later today. Investors will be looking for signs of a tone change to confirm hopes of further rate cuts in July or September. Economic Indicator Fed's Chair Powell testifies Federal Reserve Chair Jerome Powell testifies before Congress, providing a broad overview of the economy and monetary policy. Powell's prepared remarks are published ahead of the appearance on Capitol Hill. Read more. Next release: Tue Jun 24, 2025 14:00 Frequency: Irregular Consensus: - Previous: - Source: Federal Reserve
12:46 NZD/USD: Likely to trade in a range of 0.5900/0.6090 – UOB Group
There is scope for New Zealand Dollar (NZD) to rebound further; overbought conditions suggest 0.6040 is likely out of reach.
There is scope for New Zealand Dollar (NZD) to rebound further; overbought conditions suggest 0.6040 is likely out of reach. 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. Short-lived swings have resulted in a mixed outlook24-HOUR VIEW: "Yesterday, we expected NZD to 'trade in a range of 0.5925/0.5985.' We did not expect the ensuing volatility as NZD first dropped to a low of 0.5884, then rebounded strongly to close at 0.5976 (+0.16%). Although there is scope for NZD to rebound further, overbought conditions suggest any advance is unlikely to reach 0.6040. On the downside, any pullback is likely to hold above 0.5935, with minor support at 0.5965." 1-3 WEEKS VIEW: "Last Friday (20 Jun, spot at 0.5995), we highlighted that 'while there has been an increase in downward momentum, it is not enough to suggest a sustained drop.' We also highlighted that NZD 'must break and hold below 0.5940 before further declines are likely.' Although NZD dropped to a low of 0.5884 yesterday, it rebounded strongly to close 0.5976. Downward momentum has largely faded with the strong rebound. The sharp but short-lived swings have resulted in a mixed outlook. For the time being, NZD could trade in range between 0.5900 and 0.6090."
12:43 USD/CAD soft ahead of key Canada CPI data – BBH
USD/CAD is trading heavy near 1.3700 after peaking at 1.3800 yesterday, BBH FX analysts report.
USD/CAD is trading heavy near 1.3700 after peaking at 1.3800 yesterday, BBH FX analysts report. BOC cut in question as USD/CAD slips to 1.3700"Canada’s May CPI print will be a key driver of Bank of Canada (BOC) July rate cut expectations (1:30pm London). Headline CPI is expected at 1.7% y/y vs. 1.7% in April while core CPI (average of trim and median CPI) is anticipated at 3.0% y/y vs. 3.15% in April.""The BOC is concerned that 'underlying inflation could be firmer than we thought' which has dampened expectations for additional rate cuts. The swaps market is pricing in 39% odds of a 25bps cut at the next July 30 meeting. Over the next 12 months, the swaps market implies a total of between 25bps and 50bps of easing and the policy rate to bottom between 2.25% and 2.50%."
12:42 PBOC: Will increase support for the real economy
The People’s Bank of China (PBOC) said in a statement on Tuesday that it will increase support for the real economy.
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The People’s Bank of China (PBOC) said in a statement on Tuesday that it will increase support for the real economy.Additional takeawaysTo step up countercyclical, cross-cyclical adjustment.
To maintain ample liquidity.
To improve financial institutions' capabilities, expand financial supply in the consumer sector.
To support residents' employment, boost income.
To strengthen basic financial services to help optimise consumption environment.Market reaction
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.
To maintain ample liquidity.
To improve financial institutions' capabilities, expand financial supply in the consumer sector.
To support residents' employment, boost income.
To strengthen basic financial services to help optimise consumption environment.Market reaction
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.
12:37 BoE’s Greene: A careful, gradual approach to policy easing continues to be warranted
Bank of England (BoE) policymaker Megan Greene said on Tuesday that “a careful and gradual approach to removing monetary policy restrictiveness continues to be warranted.”
Bank of England (BoE) policymaker Megan Greene said on Tuesday that “a careful and gradual approach to removing monetary policy restrictiveness continues to be warranted.”Further commentsUnderlying activity is weak, the labor market has loosened further and the disinflationary process continues.
I’m worried about both the demand and the supply sides of the economy.
I continue to think the risks remain two-sided but skewed to the downside on growth and to the upside on inflation
Given the period of elevated inflation through which we have just come, I think price stability is the key priority.
Noisy data means that it will take longer for me to take comfort from recent disinflationary trends.
I worry about the near-term profile for inflation this year, which in my view now resembles more of a “plateau” than a “hump”.
The risk that our near-term plateau in inflation feeds through into second-round effects is skewed to the upside.
Different end states for central bank balance sheets may create financial arbitrage opportunities for banks, but they are fairly limited.
Financial arbitrage opportunities present incentives for banks to participate in our facilities, this is a feature, not a bug.
I’m worried about both the demand and the supply sides of the economy.
I continue to think the risks remain two-sided but skewed to the downside on growth and to the upside on inflation
Given the period of elevated inflation through which we have just come, I think price stability is the key priority.
Noisy data means that it will take longer for me to take comfort from recent disinflationary trends.
I worry about the near-term profile for inflation this year, which in my view now resembles more of a “plateau” than a “hump”.
The risk that our near-term plateau in inflation feeds through into second-round effects is skewed to the upside.
Different end states for central bank balance sheets may create financial arbitrage opportunities for banks, but they are fairly limited.
Financial arbitrage opportunities present incentives for banks to participate in our facilities, this is a feature, not a bug.
12:34 USD/JPY plunges to near 145.00 as US Dollar underperforms on Israel-Iran truce
The USD/JPY pair faces a sharp sell-off and slides to near 145.00 on Tuesday. The pair dives significantly as the US Dollar (USD) underperforms its peers after a ceasefire between Israel and Iran.
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A lower oil price bodes well for the currencies of nations that fulfill their energy requirements through imports.During the European session, United States (US) President Donald Trump confirmed a ceasefire between Israel and Iran, and urged them not to violate the same in a post on Truth.Social. “The ceasefire is now in effect. Please do not violate it!" Trump wrote.Meanwhile, a few Federal Reserve (Fed) officials have argued in favor of resuming the monetary expansion cycle, which was paused in the December policy meeting. On Monday, Fed Governor Michelle Bowman showed openness to cut interest rates in the July meeting and warned of downside risks to the labor market. 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.
12:30 Silver price today: Silver broadly unchanged, according to FXStreet data
Silver prices (XAG/USD) broadly unchanged on Tuesday, according to FXStreet data.
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Silver prices (XAG/USD) broadly unchanged on Tuesday, according to FXStreet data. Silver trades at $36.12 per troy ounce, broadly unchanged 0.06% from the $36.10 it cost on Monday.
Silver prices have increased by 25.01% since the beginning of the year. Unit measure Silver Price Today in USD Troy Ounce 36.12 1 Gram 1.16
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 91.95 on Tuesday, down from 93.31 on Monday. 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 91.95 on Tuesday, down from 93.31 on Monday. 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.)
12:21 FXS Fed Sentiment Index drops to lowest level since March ahead of Powell testimony
Federal Reserve (Fed) Chairman Jerome Powell will testify before the US House Financial Services Committee on Tuesday. Investors will look for fresh hints on the timing of the next policy action after recent comments from Fed policymakers showed a difference of opinion.
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Federal Reserve (Fed) Chairman Jerome Powell will testify before the US House Financial Services Committee on Tuesday. Investors will look for fresh hints on the timing of the next policy action after recent comments from Fed policymakers showed a difference of opinion.FXStreet (FXS) Fed Sentiment Index rose to 108.84 following the June policy meeting, at which the US central bank decided to leave the policy rate unchanged at the range of 4.25%-4.5%. In the post-meeting press conference, Powell reiterated that they have to keep rates high to get inflation all the way down and noted that they need to see more data before taking policy steps.On a dovish note, however, Fed Governor Christopher Waller told CNBC last Friday that the Fed is in a position to cut the policy rate as early as July, arguing that they should not wait for the job market to crash to start easing the policy. Similarly, Governor Michelle Bowman noted on Monday she would be in favour of lowering the policy rate at the next meeting if inflation pressures stay contained. Related news Powell to outline Fed’s rate cut path in testimony before US Congress Jerome Powell's Testimony: A crucial meeting between the Fed and political power Could July be the month the FOMC cuts rates?
Following these comments FXStreet Fed Sentiment Index declined to its lowest level since March at 105.2. Although the Index remains above the neutral line at 100, it highlights a less hawkish Fed tone overall.According to the CME FedWatch Tool, markets are currently pricing in about a 20% probability of a July rate cut and an 80% chance that the policy rate will be lowered by at least 25 basis points by September. 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.
12:18 HUF: Steady rate does not equal steady the forint – Commerzbank
The Hungarian central bank (MNB) is set to leave its base rate unchanged at 6.50%, for the ninth consecutive month, today. That much has been clear from the MPC’s persistent rhetoric, and now confirmed by unanimous expectations among analysts.
The Hungarian central bank (MNB) is set to leave its base rate unchanged at 6.50%, for the ninth consecutive month, today. That much has been clear from the MPC’s persistent rhetoric, and now confirmed by unanimous expectations among analysts. Governor Mihály Varga has repeated at every opportunity that monetary policy must remain 'patient and careful' as the inflation fight is not yet over. Forward guidance is expected to remain intact too, with no rate cuts in sight before year-end, but equally no indication that _hikes_ could be under consideration, Commerzbank's FX analyst Tatha Ghose notes. HUF remains vulnerable to being tested"Headline and core inflation resumed a gradual deceleration over the past couple of months. But, this inflation moderation may now already be slightly outdated: economy minister Marton Nagy has remarked on social media that the war between Israel and Iran could bring back inflationary pressures via energy. In the event that inflation does re-accelerate, the policy rate, while still high in absolute terms, may not deliver a clearly positive real interest rate when measured using month-on-month core trends. That is Hungary’s key vulnerability, in our view.""Varga is unlikely to dwell much on this adverse scenario today, especially as recent data allow the central bank to argue that inflation is within the forecast range and that expectations are beginning to moderate. But the FX market will focus on such scenarios. As we have previously noted, what is missing is a convincing signal that MNB would be willing to hike the rate if the forint were to depreciate sharply in a risk-off environment. The forint is a high-beta currency, and global market conditions remain jumpy. S&P’s negative outlook on Hungary, weak Q1 GDP growth, and the IMF’s downbeat 2025 growth forecast (1.4%) all flag up different dimensions vis-à-vis adverse possibilities; what is more, when tensions run high, PM Orban has a propensity to get stuck into the opposite geo-political positions compared with the EU, which also impacts risk perception.""A steady base rate is widely anticipated for today, and while this is certainly positive compared to alternatives involving rate cuts, it falls short, in our view, of creating downside protection for the exchange rate. Without a convincing reaction function of the MNB – one that includes the possibility of rate hikes – HUF remains vulnerable to being tested."
12:17 EUR/JPY falls to near 168.00 due to growing odds of BoJ’s rate hikes
EUR/JPY halts its three-day winning streak, trading around 168.10 during the European hours on Tuesday. The currency cross extends its losses after pulling back from an 11-month high of 169.72, reached on Monday.
.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 continues its decline after retreating from an 11-month high of 169.72.The Japanese Yen receives support from the hawkish tone surrounding the BoJ’s interest rate hikesThe Euro draws support from the improved risk appetite following the Israel-Iran ceasefire.EUR/JPY halts its three-day winning streak, trading around 168.10 during the European hours on Tuesday. The currency cross extends its losses after pulling back from an 11-month high of 169.72, reached on Monday.The decline of the EUR/JPY cross could be attributed to the strengthening of the Japanese Yen (JPY) against its peers, driven by the hawkish sentiment surrounding the Bank of Japan’s (BoJ) interest rate hikes. This cites persistent core inflation driven by firms passing wage increases onto prices as a reason for further policy tightening.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. Moreover, the better-than-expected Japan's PMI keeps the door open for further rate hikes by the BoJ in the coming month.Japan's Economy Minister, Ryosei Akazawa, is expected to make his seventh visit to the United States on June 26, raising hopes for a US-Japan trade agreement ahead of the July 9 deadline for steep reciprocal US tariffs.The downside of the EUR/JPY cross could be restrained as the Euro (EUR) receives support as safe-haven demand weakens following the ceasefire agreement that came into effect between Israel and Iran. The Israeli government agreed to a ceasefire with Iran, while Iranian state media announced later that Tehran had also accepted the deal, raising hopes for an end to the 12-day conflict. However, the Israeli military said that Iran had launched missiles toward Israel after the ceasefire took effect.The headline German IFO Business Climate Index climbed to 88.4 in June from 87.5 in May, surpassing the market forecast of 88.3. Meanwhile, the Current Economic Assessment Index improved to 86.2 from 86.1 previously. The IFO Expectations Index, which indicates firms’ projections for the next six months, advanced to 90.7 against the previous 88.9 and expected 90.0 readings. Euro PRICE Today The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the New Zealand Dollar. USD EUR GBP JPY CAD AUD NZD CHF USD -0.22% -0.62% -0.71% -0.16% -0.82% -0.92% -0.09% EUR 0.22% -0.44% -0.54% 0.05% -0.59% -1.14% 0.14% GBP 0.62% 0.44% -0.10% 0.49% -0.15% -0.70% 0.43% JPY 0.71% 0.54% 0.10% 0.57% -0.13% -0.24% 0.51% CAD 0.16% -0.05% -0.49% -0.57% -0.66% -1.19% -0.07% AUD 0.82% 0.59% 0.15% 0.13% 0.66% -0.55% 0.58% NZD 0.92% 1.14% 0.70% 0.24% 1.19% 0.55% 1.14% CHF 0.09% -0.14% -0.43% -0.51% 0.07% -0.58% -1.14% 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).
12:12 AUD/USD: Likely to trade between 0.6385 and 0.6555 – UOB Group
Overbought advance in Australian Dollar (AUD) could test 0.6505 before leveling off against US Dollar (USD); 0.6555 is not expected to come into view.
Overbought advance in Australian Dollar (AUD) could test 0.6505 before leveling off against US Dollar (USD); 0.6555 is not expected to come into view. 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: "While we highlighted yesterday that “the risk for AUD is on the downside”, we indicated that it 'may not have sufficient momentum to break below 0.6400.' Our assessment was incorrect, as AUD broke below 0.6400 and reached a low of 0.6373, before surging to close 0.13% higher at 0.6460. While overbought, the advance could test 0.6505 before leveling off. The major resistance at 0.6555 is not expected to come into view. Support is at 0.6440, followed by 0.6415." 1-3 WEEKS VIEW: "Last Friday (20 Jun, spot at 0.6485), we indicated that 'while further range trading still seems likely, a tighter 0.6430/0.6550 range should be sufficient to contain price movements for now.' After AUD broke below 0.6430 in the early Asian trading yesterday, we indicated that 'although AUD broke below 0.6430 on the opening today, it must close below this level before a move to 0.6355 can be expected.' We added, 'the likelihood of AUD closing below 0.6430 will remain in place, as long as the ‘strong resistance’ level, currently at 0.6505, is not breached.' AUD then dropped to 0.6373 before soaring to close at 0.6460. Although our ‘strong resistance’ level has not been breached yet, the downward momentum has largely faded with the sharp rise. To put it another way, the current price movements are likely part of a broad range trading phase, probably between 0.6385 and 0.6555."
12:08 HUF: NBH must increase hawkishness to protect FX – ING
The National Bank of Hungary is likely to leave rates unchanged today at 6.50% in line with market expectations, ING's FX analyst Frantisek Taborsky notes.
The National Bank of Hungary is likely to leave rates unchanged today at 6.50% in line with market expectations, ING's FX analyst Frantisek Taborsky notes. Weakness in HUF is likely to fade"The central bank is expected to confirm the hawkish message from the last meetings and perhaps increase the amount of hawkishness, given some upside inflation surprises and the current developments in the Middle East, which clearly threaten FX and price stability in Hungary. The new forecast will also be in the spotlight, where we are likely to see a worse outlook for the economy this year and next.""The market has priced in roughly two rate cuts this year over the past few weeks, leaving only one at the end of the year. At the same time, the priced terminal rate has risen from roughly 5.00% to 5.60%. Our economists do not expect any rate cut this year and the NBH should not return to rate cuts until early next year. Moreover, the current energy price developments, geopolitical uncertainty and pressure on the HUF should keep the central bank's tone strongly hawkish.""EUR/HUF almost touched 404.5 yesterday, the highest since late May, and as we expected, was the most affected currency in the CEE region after the risk-off trigger this weekend. However, as we discussed here yesterday, we believe any weakness in HUF should fade and the market should sell EUR/HUF ahead of the NBH meeting today, which should protect the currency and head back below 402."
12:06 ECB's Villeroy: ECB could still cut rates despite oil market volatility
European Central Bank (ECB) policymaker Francois Villeroy de Galhau told the Financial Times on Tuesday that the ECB could still cut rates despite the volatility seen in the oil market, per Reuters.
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European Central Bank (ECB) policymaker Francois Villeroy de Galhau told the Financial Times on Tuesday that the ECB could still cut rates despite the volatility seen in the oil market, per Reuters. "If we look at the present assessment of markets so far, inflation expectations remain moderate," Villeroy added.Market reactionThese comments failed to trigger a noticeable market reaction. At the time of press, EUR/USD was trading at 1.1595, rising about 0.15% on a daily basis.These comments received a dovish score of 3.6 from FXStreet's ECB Speech Tracker. ECB FAQs What is the ECB and how does it influence 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 for the region.
The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger 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. What is Quantitative Easing (QE) and how does it affect the Euro? In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro.
QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic. What is Quantitative tightening (QT) and how does it affect the Euro? Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
12:00 EUR/HUF tests 405 hurdle after trendline rebound – Société Générale
EUR/HUF is staging a tentative rebound after defending key trendline support near 398. However, the 200-DMA and upper band of its recent range at 405 remain a critical test.
EUR/HUF is staging a tentative rebound after defending key trendline support near 398. However, the 200-DMA and upper band of its recent range at 405 remain a critical test. A failure to clear this barrier could trigger another leg lower toward the March low at 395, Société Générale's FX analysts note. Rebound in EUR/HUF faces key resistance zone"EUR/HUF has recently defended the ascending trend line drawn since 2023 near 398, which is an interim support. A brief rebound is taking shape after this test. Upper part of recent range and the 200-DMA at 405 is an important hurdle." "It will be interesting to see if the pair can establish above this resistance. Inability to cross this could denote a risk of one more down leg. Break below 398 may lead to extension in decline towards the March low of 395."
12:00 Powell to outline Fed’s rate cut path in testimony before US Congress
Jerome Powell, Chairman of the United States (US) Federal Reserve (Fed), will deliver the Semi-Annual Monetary Policy Report and testify before the US House Financial Services Committee on Tuesday.
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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}}Jerome Powell’s testimony in the US Congress will be a top-tier market-moving event this week.New clues on the Federal Reserve interest rate path are awaited.US Dollar, stock markets and other asset classes could see big swings with the Fed Chair’s words. Jerome Powell, Chairman of the United States (US) Federal Reserve (Fed), will deliver the Semi-Annual Monetary Policy Report and testify before the US House Financial Services Committee on Tuesday. The hearing will start at 14:00 GMT and it will have the full attention of all financial market players. Jerome Powell is expected to address the main takeaways of the Fed’s Semi-Annual Federal Reserve Monetary Policy Report, published last Friday. In that report, the Fed noted that there are some early signs suggesting that tariffs are pushing up inflation and reiterated that monetary policy is well-positioned for what lies ahead.In a long Q&A session, House members are expected to ask Powell about the interest rate path, inflation developments, and the economic outlook. They are also very likely to inquire about how US President Donald Trump’s policies and the current geopolitical environment could influence prices, growth prospects and the monetary policy moving forward. Related news Fed’s Bowman: Open to cutting rates as soon as July Jerome Powell's Testimony: A crucial meeting between the Fed and political power Is Trump causing divisions within the Fed?
The CME FedWatch Tool shows that markets are currently pricing in about a 20% probability that the Fed will lower the policy rate by 25 basis points (bps) in July after maintaining its status quo at every meeting this year. The revised Summary of Economic Projections (SEP), published alongside the policy statement after the June meeting, showed that policymakers are still projecting two 25 basis points (bps) rate cuts in 2025 and a single rate cut in 2026, compared to two rate cuts marked down in March’s SEP.In an interview with CNBC this past Friday, Fed Governor Christopher Waller said that the Fed is in a position to lower rates as early as July. Citing concerning signs in the labor market, such as a high unemployment rate among recent graduates and slower job creation, Waller argued that the Fed should not wait for the job market to crash before easing policy. Similarly, Fed Governor Michelle Bowman noted that she would be in favour of lowering the interest rate at the next meeting to align the policy more closely with its neutral setting and maintain a healthy labour market.In case Powell notes that they will not have enough data to confirm a rate cut in July and reiterates that they need to remain patient, the market positioning suggests that the US Dollar (USD) could gather strength against its rivals in the immediate reaction. On the flip side, a significant USD selloff could be seen if Powell leaves the door open for a policy-easing step in July. Comments on the inflation outlook, especially with rising energy prices due to the escalating geopolitical tensions in the Middle East, could also drive the USD’s valuation. About Jerome Powell (via Federalreserve.gov)"Jerome H. Powell first took office as Chair of the Board of Governors of the Federal Reserve System on February 5, 2018, for a four-year term. He was reappointed to the office and sworn in for a second four-year term on May 23, 2022. Mr. Powell also serves as Chairman of the Federal Open Market Committee, the System's principal monetary policymaking body. Mr. Powell has served as a member of the Board of Governors since taking office on May 25, 2012, to fill an unexpired term. He was reappointed to the Board and sworn in on June 16, 2014, for a term ending January 31, 2028." 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.
11:59 GBP/USD: Likely to trade in a range of 1.3420/1.3655 – UOB Group
There is a chance for Pound Sterling (GBP) to test 1.3580 before the risk of a pullback increases. 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.
There is a chance for Pound Sterling (GBP) to test 1.3580 before the risk of a pullback increases. 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 to be mixed24-HOUR VIEW: "After GBP fell sharply after opening yesterday, we indicated that 'downward momentum is building, and GBP may retest the 1.3385 level, but a sustained break below this level seems unlikely for now.' Our view was not wrong, as GBP dropped to a low of 1.3373. That said, we did not expect GBP to soar from the low. GBP closed at 1.3527 before extending its gains today. The rapid rise appears overstretched, but there is a chance for GBP to test 1.3580 before the risk of a pullback increases. The major resistance at 1.3655 is not expected to come into view. Support levels are at 1.3525 and 1.3485." 1-3 WEEKS VIEW: "In our latest narrative from last Thursday (19 Jun, spot at 1.3415), we indicated that 'downward momentum is beginning to build, but it may take a while before 1.3335 comes into view.' Yesterday, GBP dropped to a low of 1.3373 and then, in an abrupt move, soared above our ‘strong resistance’ level of 1.3520. The breach of our ‘strong resistance’ indicates that the momentum buildup has faded. After the sharp swings, the outlook appears mixed, and GBP could trade in a range of 1.3420/1.3655 for now."
11:48 USD/CAD remains supported above 1.3700 ahead of Canada’s CPI release
The US Dollar retreated against its Canadian Counterpart on Monday as Trump’s announcement of a ceasefire in the Middle East boosted risk appetite.
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The US Dollar retreated against its Canadian Counterpart on Monday as Trump’s announcement of a ceasefire in the Middle East boosted risk appetite. The pair’s reversal, however, has been capped above 1.3700 with investors awaiting Canadian inflation figures.
The US Dollar is trading lower across the board, with the US Dollar Index (DXY) more than 1% below Monday’s highs. The agreement between Israel and Iran to cease all hostilities has boosted market sentiment and sent safe-haven assets like the US Dollar tumbling.The slide on Oil prices is weighing on the CADThe Canadian Dollar, however, is failing to put a significant distance from Monday’s lows, weighed by a nearly 15% decline in Oil prices in the last two days. Oil is Canada’s main import, and the CAD is strongly correlated to Crude prices.
Investors’ hopes of a long-lasting truce in the Middle East have eased concerns about a disruption to Oil supply that had boosted prices in the last few weeks. The risks of Iran blocking the Strait of Horm¡uz have also declined, altogether prompting a more than $10 sell-off in WTI prices over the last two days. This is acting as a headwind for the CAD.
Beyond that, traders are also wary of placing large CAD longs ahead of the Canadian CPI release, due later today. Consumer inflation is expected to have picked up in June, which might complicate the Bank of Canada’s monetary policy and increase pressure on the loonie.
In the US, all eyes will be on Fed chairman Powell, whose testimony to Congress will be observed with interest, as the dovish comments by Waller and Bowman in recent days have heightened hopes of a rate cut in the coming months. 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.
The US Dollar retreated against its Canadian Counterpart on Monday as Trump’s announcement of a ceasefire in the Middle East boosted risk appetite. The pair’s reversal, however, has been capped above 1.3700 with investors awaiting Canadian inflation figures.
The US Dollar is trading lower across the board, with the US Dollar Index (DXY) more than 1% below Monday’s highs. The agreement between Israel and Iran to cease all hostilities has boosted market sentiment and sent safe-haven assets like the US Dollar tumbling.The slide on Oil prices is weighing on the CADThe Canadian Dollar, however, is failing to put a significant distance from Monday’s lows, weighed by a nearly 15% decline in Oil prices in the last two days. Oil is Canada’s main import, and the CAD is strongly correlated to Crude prices.
Investors’ hopes of a long-lasting truce in the Middle East have eased concerns about a disruption to Oil supply that had boosted prices in the last few weeks. The risks of Iran blocking the Strait of Horm¡uz have also declined, altogether prompting a more than $10 sell-off in WTI prices over the last two days. This is acting as a headwind for the CAD.
Beyond that, traders are also wary of placing large CAD longs ahead of the Canadian CPI release, due later today. Consumer inflation is expected to have picked up in June, which might complicate the Bank of Canada’s monetary policy and increase pressure on the loonie.
In the US, all eyes will be on Fed chairman Powell, whose testimony to Congress will be observed with interest, as the dovish comments by Waller and Bowman in recent days have heightened hopes of a rate cut in the coming months. 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.
11:44 USD: Fed independence risks can take over now – ING
Markets are materially scaling back geopolitical risk as President Trump declared that a ceasefire between Iran and Israel is in place following measured retaliatory strikes on US positions in Qatar yesterday.
Markets are materially scaling back geopolitical risk as President Trump declared that a ceasefire between Iran and Israel is in place following measured retaliatory strikes on US positions in Qatar yesterday. This morning, Israel confirmed it has agreed to a ceasefire, prompting another leg lower in oil prices, which are now more than 15% off Monday’s open, ING's FX analyst Francesco Pesole notes. DXY may well retest the 97.62 lows in the coming days"The support that had built for the US Dollar (USD) over the past few days has faltered on the back of the oil correction, but we think a growing dovish front in the FOMC is also doing quite a lot of harm to the greenback. After Christopher Waller and Michelle Bowman – both Trump appointees – openly showed support for cutting rates even as early as July, Chicago Fed President Austan Goolsbee also sounded open to easing yesterday, even though he didn’t discuss timing.""Today, Chair Jay Powell faces Congress in a testimony where he will likely be intensively questioned on the Fed’s cautious approach to easing, echoing criticism from Trump. The risks of some dovish hints by Powell and, by extension, downside risks for the dollar have increased after the latest comments by Waller and Bowman, in our view. Crucially, markets may treat any tweaks in Powell’s stance as an indication that Trump’s political pressure has breached the independence shield of the Fed – and that has the potential to drive substantial USD depreciation. The USD OIS curve is now fully pricing in a September cut, compared to less than 20bp at Monday’s open. A July cut is now 23% priced in.""Even without a dovish surprise from Powell, DXY may well retest the 97.62 lows in the coming days, as markets are much freer to jump back into popular strategic dollar shorts now that geopolitical and oil risks are being priced out. Some support may come from a potential return above 100 in the Conference Board Consumer Confidence, whose June print is published this afternoon, but that may not prove enough to take the dollar on a sustainable recovery."
11:37 EUR/USD: Likely to trade between 1.1480 and 1.1660 – UOB Group
Sharp rally may extend further; overbought conditions suggest Euro (EUR) is unlikely to break clearly above 1.1620.
Sharp rally may extend further; overbought conditions suggest Euro (EUR) is unlikely to break clearly above 1.1620. 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, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. EUR is expected to continue to trade in a range24-HOUR VIEW: "We stated yesterday that 'there is a chance for EUR to test 1.1445.' We also stated that 'the major support at 1.1400 is unlikely to come under threat.' While EUR dropped to a low of 1.1451 in the London session, it then rallied sharply to 1.1581. EUR continues to rise in the early Asian session today. The sharp rally may extend further, but deeply overbought conditions suggest EUR is unlikely to break clearly above 1.1620. On the downside, if EUR breaks below 1.1535 (minor support is at 1.1560), it would indicate that the rally is ready to take a breather." 1-3 WEEKS VIEW: "In our most recent narrative from 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.' Yesterday, EUR fluctuated in a broad range between 1.1451 and 1.1581. While EUR has moved above 1.1570, there has been no significant increase in upward momentum. For the time being, we continue to expect range trading, but given the increase in volatility, we now expect EUR to trade in a range of 1.1480/1.1660."
11:35 WTI trades lower around $66.00, downside appears further due to easing supply concerns
West Texas Intermediate (WTI) Oil price extends its losses for the second successive day, trading around $66.30 during the European hours on Tuesday. Crude Oil prices lose ground due to easing concerns over supply disruptions, driven by the ceasefire agreement 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}}WTI price struggled as supply concerns eased following the Israel-Iran ceasefire.President Trump said that a ceasefire came into effect and urged both countries to uphold it.Oil prices may receive support as Fed officials indicate an interest rate cut as early as July.West Texas Intermediate (WTI) Oil price extends its losses for the second successive day, trading around $66.30 during the European hours on Tuesday. Crude Oil prices lose ground due to easing concerns over supply disruptions, driven by the ceasefire agreement between Israel and Iran.On Tuesday, the Israeli government confirmed it had agreed to a ceasefire with Iran. Prime Minister Benjamin Netanyahu said that Israel achieved Iran war goals, adding that the country will respond forcefully to a breach of the truce. Iranian state media announced that Tehran had also accepted the deal, raising hopes for an end to the 12-day conflict.However, the Israeli military warned that Iran had launched missiles toward Israel after the ceasefire took effect. US President Donald Trump said a ceasefire was now in place and asked both countries not to violate it.Oil prices struggled as traders avoided panicking following Iran’s retaliatory strike on Al Udeid, a US military base in Qatar, on Monday. Qatar officials said that the missile barrage was intercepted and reported no casualties, as the base had been evacuated in advance. Concerns over Oil supply disruption ease as Tehran decided to avoid targeting the strategic Strait of Hormuz, a crucial chokepoint that handles approximately 20% of the world’s Oil transit.Crude Oil prices may regain their ground due to dovish remarks from the Federal Reserve’s (Fed) officials pertaining to the policy outlook. Federal Reserve’s (Fed) Vice Chair for Supervision Michelle Bowman said on Monday that he could support a rate cut in July as risks to the job market may be on the rise. Moreover, Fed Governor Christopher Waller noted on Friday that the US central bank could start easing monetary policy as soon as next month. This is important to note that lower borrowing costs could boost economic activities in the United States (US), the world’s largest oil-consuming country, which may increase the demand and prices of crude Oil. 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.
11:35 EUR: Breaking the range? – ING
Eurozone PMIs came in largely in line with expectations yesterday, signalling that business sentiment has stabilised after the tariff scare but still points to stagnation, ING's FX analyst Francesco Pesole notes.
Eurozone PMIs came in largely in line with expectations yesterday, signalling that business sentiment has stabilised after the tariff scare but still points to stagnation, ING's FX analyst Francesco Pesole notes. Concerns about the erosion of EUR fundamentals are dissipating"The euro would benefit from an improvement in domestic activity indicators, but those are neither particularly likely nor necessary to take EUR/USD higher from here. That’s because the euro continues to benefit from the buildup of dollar shorts and its substitution value rather than any strong eurozone narrative. Incidentally, the drop in oil prices means concerns about the erosion of EUR fundamentals are dissipating.""EUR/USD is re-testing the 1.1630 intraday highs this morning. Much of the direction today will depend on whether markets find any dovish hints in Powell’s testimony, which holds the keys for a decisive break higher. Barring that, we remain unconvinced that there is enough thrust to keep EUR/USD sustainably bid beyond the 1.1600 mark, considering the calm in the Treasury market and extensive overvaluation.""Markets will also keep a close eye on the NATO summit in the Netherlands, where NATO leadership is trying to build consensus on a 5% defence spending commitment."
11:16 USD/CHF consolidates losses below 0.8130 in risk-on markets with Fed's Powell in the spotlight
Fed Chair Powell is expected to speak to Congress later today and give more clues on the bank's next steps.The Swiss Franc has retraced most of the last two weeks’ losses, and the USD/CHF has returned to levels right above 0.8100, with the Dollar weighed by the risk-on mood after the announcement of
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The Swiss Franc has retraced most of the last two weeks’ losses, and the USD/CHF has returned to levels right above 0.8100, with the Dollar weighed by the risk-on mood after the announcement of a truce in the Middle East, and dovish rhetoric by Fed officials.
Trump boosted investors’ sentiment late on Monday, downplaying Iran’s attack on a US military base in Qatar and announcing a “complete and total” ceasefire. The ensuing risk rally has hit the US Dollar harder than the CHF, another safe haven, which is also struggling today.
Also on Monday, Federal Reserve Vice Chair of Supervision, Michelle Bowman, joined her colleague Waller and called for a rate cut in the coming months. Bowman affirmed that the impact of Trump’s tariffs on inflation is likely to be smaller than previously thought, and that the bank should ease its monetary policy to support job creation.
These comments have boosted the interest in Chairman Powell’s testimony to Congress. Investors will be looking for signs of cracks in his recent hawkish rhetoric, which would boost hopes of a rate cut, probably more in September than in July, and increase pressure on the US Dollar. 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 Swiss Franc has retraced most of the last two weeks’ losses, and the USD/CHF has returned to levels right above 0.8100, with the Dollar weighed by the risk-on mood after the announcement of a truce in the Middle East, and dovish rhetoric by Fed officials.
Trump boosted investors’ sentiment late on Monday, downplaying Iran’s attack on a US military base in Qatar and announcing a “complete and total” ceasefire. The ensuing risk rally has hit the US Dollar harder than the CHF, another safe haven, which is also struggling today.
Also on Monday, Federal Reserve Vice Chair of Supervision, Michelle Bowman, joined her colleague Waller and called for a rate cut in the coming months. Bowman affirmed that the impact of Trump’s tariffs on inflation is likely to be smaller than previously thought, and that the bank should ease its monetary policy to support job creation.
These comments have boosted the interest in Chairman Powell’s testimony to Congress. Investors will be looking for signs of cracks in his recent hawkish rhetoric, which would boost hopes of a rate cut, probably more in September than in July, and increase pressure on the US Dollar. 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.
11:02 German IFO Business Climate Index rises further to 88.4 in June vs. 88.3 expected
The headline German IFO Business Climate Index advanced to 88.4 in June from 87.5 in May. The data came in a tad higher than the market forecast of 88.3.
German IFO Business Climate Index outpaces estimates with 88.4 in June.EUR/USD defends minor bids near 1.1600 on German sentiment data.The headline German IFO Business Climate Index advanced to 88.4 in June from 87.5 in May. The data came in a tad higher than the market forecast of 88.3.Meanwhile, the Current Economic Assessment Index improved to 86.2 during the same period from 86.1 in May but missed the expected 86.5 print.The IFO Expectations Index, which indicates firms’ projections for the next six months, rose to 90.7 in June vs. 88.9 in May and 90 expected.Market reaction to the German IFO Survey
11:01 Germany IFO – Expectations above forecasts (90) in June: Actual (90.7)
Germany IFO – Expectations above forecasts (90) in June: Actual (90.7)
11:00 Germany IFO – Current Assessment came in at 86.2, below expectations (86.5) in June
Germany IFO – Current Assessment came in at 86.2, below expectations (86.5) in June
11:00 Germany IFO – Business Climate above expectations (88.3) in June: Actual (88.4)
Germany IFO – Business Climate above expectations (88.3) in June: Actual (88.4)
11:00 EUR/USD jumps near YTD highs after Trump announces a complete Iran-Israel ceasefire
The EUR/USD pair is rallying on Tuesday, following a significant rebound on Monday after US President Donald Trump announced a "complete and total 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}}A relief rally is boosting the Euro and crushing the safe-haven US Dollar.A sharp decline in Oil prices is giving additional support to the common currency.EUR/USD has broken the top of a bullish flag formation and aims for 1.1630 and 1.1700.The EUR/USD pair is rallying on Tuesday, following a significant rebound on Monday after US President Donald Trump announced a "complete and total ceasefire" between Israel and Iran. The common currency has jumped about 1.30% from Monday's lows to reach levels right above 1.1600 at the time of writing, at a short distance from the year-to-date high of 1.1630.Israel and Iran seem to have reached a ceasefire agreement after twelve days of hostilities that included a strike from the US on Iran's strategic nuclear sites. The terms of the agreement have not been disclosed, and Iran launched a barrage of missiles at Israel earlier today. The market, however, is celebrating the agreement, buying risky assets while the US Dollar (USD) and Oil are dropping sharply.Crude prices are dropping nearly 3% so far on Tuesday, following a nearly 13% sell-off on Monday, with the barrel of WTI returning to $63.00 from above $77.00. The decline in Oil prices gives some respite to the Eurozone, as Europe is a net Crude importer, and expensive Oil would add inflationary pressures on a weakening economy.ini the Fed Chairman Jerome Powell's testimony to Congress, due at 14:00 GMT, in which he is expected to lay out the country's economic prospects and the bank's policy plans. Euro PRICE Today The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar. USD EUR GBP JPY CAD AUD NZD CHF USD -0.26% -0.35% -0.62% -0.10% -0.59% -0.65% -0.05% EUR 0.26% -0.14% -0.39% 0.16% -0.33% -0.83% 0.22% GBP 0.35% 0.14% -0.26% 0.30% -0.19% -0.70% 0.20% JPY 0.62% 0.39% 0.26% 0.53% -0.01% -0.07% 0.45% CAD 0.10% -0.16% -0.30% -0.53% -0.50% -0.99% -0.10% AUD 0.59% 0.33% 0.19% 0.01% 0.50% -0.51% 0.40% NZD 0.65% 0.83% 0.70% 0.07% 0.99% 0.51% 0.91% CHF 0.05% -0.22% -0.20% -0.45% 0.10% -0.40% -0.91% 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 sends the US Dollar tumblingMarkets are going through a relief rally. The announcement of the ceasefire between Israel and Iran has dissipated fears of a full-blown war in the region, triggered by the involvement of the US during the weekend. The US Dollar Index, which measures the value of the USD against the six most traded currencies, has dropped more than 1% since the ceasefire was announced, giving away most of the ground gained over the last two weeks.Iran launched missiles at Israel, killing four, after an attack on a US military base in Qatar, which did not cause injuries. The Iranian Foreign Minister affirmed that Tehran will only stop its attacks when Israel ceases its airstrikes. Investors, however, are celebrating the agreement as a done deal.On the macroeconomic front, the German IFO business climate, which is expected to show a moderate improvement in June, and some European Central Bank (ECB) speakers will attract attention on Tuesday. With geopolitical fears easing, macroeconomics might have a higher impact on FX markets.In the US, the highlight is Fed Chairman Powell's Semiannual Monetary Policy Report to Congress, due on Tuesday and Wednesday. The central bank's chief will be questioned about the bank's plans to deal with a context of weakening growth and higher inflationary pressures. His comments will be observed with interest after the recent dovish calls by both Bowman and Waller.Investors have ramped up bets on a Fed rate cut in the coming months following recent Fedspeak. Futures markets are now pricing a 22% chance of a July cut, up from around 14% last week, while expectations of a September cut have increased to above 80% from below 70% last week, according to the CME Group's Fed Watch Tool.Eurozone data released on Monday showed that business activity remained broadly steady in June. The preliminary Manufacturing and Services PMIs came in roughly at the same levels as in the previous month at 49.4 and 50.0, respectively. The Euro retreated after the data release as investors had expected slightly better results.In the US, the preliminary S&P Global PMIs beat expectations. The Manufacturing PMI remained steady at 52 in June, against expectations of a slowdown to 51, while the Services PMI eased to 53.1 from the previous 53.7, still better than the 52.9 reading forecasted by the analysts.EUR/USD breaks higher and sets its focus at the 1.1630 high
EUR/USD has broken above the top of the last few weeks' corrective channel, boosted by a favourable market sentiment with bulls focusing on the June 12 high at 1.1630.
The breach of the trendline resistance at 1.1540 highlights a bullish flag formation, whose measured target is located at the 1.1700 area, where the 127.2% Fibonacci extension of the June 10-12 rally lies.
bring
On the downside, a bearish reaction from these levels might seek support at the reverse trendline, now around 1.1535, before rallying further. A confirmation below that level would cancel the bullish view and bring the June 19 and June 22 low at 1.1445 back to the focus. 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.
EUR/USD has broken above the top of the last few weeks' corrective channel, boosted by a favourable market sentiment with bulls focusing on the June 12 high at 1.1630.
The breach of the trendline resistance at 1.1540 highlights a bullish flag formation, whose measured target is located at the 1.1700 area, where the 127.2% Fibonacci extension of the June 10-12 rally lies.
bring
On the downside, a bearish reaction from these levels might seek support at the reverse trendline, now around 1.1535, before rallying further. A confirmation below that level would cancel the bullish view and bring the June 19 and June 22 low at 1.1445 back to the focus. 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.
11:00 Canada CPI set to remain below target in May despite inflation uncertainty from US tariffs
This Tuesday, Statistics Canada will release the Consumer Price Index (CPI) for May. This will get the market's attention because it will provide new information about inflation trends that the Bank of Canada (BoC) uses to make decisions about interest rates.
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This will get the market's attention because it will provide new information about inflation trends that the Bank of Canada (BoC) uses to make decisions about interest rates. Economists think that headline inflation will match April’s annual increase of 1.7%. But on a monthly basis, inflation may have gone up by 0.5%, which is much more than the 0.1% drop in April.The Bank of Canada will also release its core inflation measures, which leave out unstable price swings to show the underlying momentum. These main indicators went up 2.6% from the same month last year in April.Analysts remain on high alert regarding the potential pass-through of domestic inflation from the impact of US tariffs, even though there are signs that price pressure is easing. Because the inflation outlook is now less certain, both investors and policymakers are expected to be careful in the coming weeks.What can we expect from Canada’s inflation rate?The Bank of Canada maintained its benchmark rate at 2.75% earlier this month, a decision that was largely expected. The central bank has chosen to evaluate the complete effects of US tariffs before considering additional stimulus measures. Since June 2024, the central bank has reduced borrowing costs by 225 basis points. However, Governor Tiff Macklem has indicated that further cuts may be necessary if trade-related challenges intensify.Market participants now assign a roughly 45% probability to a July rate cut, with overnight index swaps implying about 36 basis points of easing by year-end.At his post-meeting press conference, Governor Macklem acknowledged the challenge of isolating tariff effects in headline CPI figures, noting the bank’s growing reliance on business surveys and soft data, which already point to rising input costs.When is the Canada CPI data due, and how could it affect USD/CAD?Canada’s April inflation data is due out on Tuesday at 12:30 GMT, and markets are bracing for a potential pickup of inflationary pressure.If inflation exceeds expectations, it could confirm the belief that tariff-induced price pressure is beginning to manifest, leading the Bank of Canada to adopt a more cautious approach, potentially strengthening the Canadian Dollar (CAD), and possibly bolstering expectations for additional rate cuts, thereby exerting some pressure on the Loonie.That said, an unexpected jump in inflation isn’t necessarily positive news either. A sharp increase in inflation could potentially raise concerns about the health of the Canadian economy, and paradoxically, such a surprise could also negatively impact the currency. In short, markets are watching closely — not just for the headline number but for the broader message it sends about where policy and growth are headed.Senior Analyst Pablo Piovano from FXStreet pointed out that the Canadian Dollar has surrendered part of its recent gains, lifting USD/CAD from levels last seen in early October 2024 near 1.3540 to the boundaries of 1.3800, the figure at the beginning of the week or fresh four-week highs.“The resurgence of the bearish tone could motivate USD/CAD to revisit its 2025 bottom at 1.3538, marked on June 16,” Piovano said. “That would be followed by the September 2024 trough of 1.3418 and the weekly base of 1.3358 reached on January 31, 2024.”“A firmer conviction from bulls could push spot to its provisional barrier at the 55-day SMA at 1.3827, prior to the weekly top of 1.3860 set on May 29 and then its May peak at 1.4015 hit on May 12,” he added.“Looking at the broader picture, further losses in the pair are likely below its key 200-day SMA at 1.4030,” Piovano added.“Furthermore, USD/CAD is currently showing some marked recovery, as the Relative Strength Index (RSI) approaches the 56 mark, while the Average Directional Index (ADX) is easing toward 26, indicating some loss of impetus in the current trend. Economic Indicator BoC Interest Rate Decision The Bank of Canada (BoC) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoC believes inflation will be above target (hawkish), it will raise interest rates in order to bring it down. This is bullish for the CAD since higher interest rates attract greater inflows of foreign capital. Likewise, if the BoC sees inflation falling below target (dovish) it will lower interest rates in order to give the Canadian economy a boost in the hope inflation will rise back up. This is bearish for CAD since it detracts from foreign capital flowing into the country. Read more. Last release: Wed Jun 04, 2025 13:45 Frequency: Irregular Actual: 2.75% Consensus: 2.75% Previous: 2.75% Source: Bank of Canada Economic Indicator BoC Consumer Price Index Core (YoY) The BoC Consumer Price Index Core, released by the Bank of Canada (BoC) on a monthly basis, represents changes in prices for Canadian consumers by comparing the cost of a fixed basket of goods and services. It is considered a measure of underlying inflation as it excludes eight of the most-volatile components: fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transportation and tobacco products. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Canadian Dollar (CAD), while a low reading is seen as bearish. Read more. Next release: Tue Jun 24, 2025 12:30 Frequency: Monthly Consensus: - Previous: 2.5% Source: Statistics Canada
10:52 Israeli military identifies missiles launched from Iran towards Israel
The Israeli military said on Tuesday that it identified missiles launched from Iran toward Israel after the ceasefire took effect.
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The Israeli military said on Tuesday that it identified missiles launched from Iran toward Israel after the ceasefire took effect.Additional takeawaysDefensive systems are operating to intercept the threat.The public is instructed to enter a protected space and remain there until further notice.Market reactionThe US Dollar Index (DXY) is clawing back some of the losses to trade near 98.25, still down 0.18% on the day. 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 Japanese Yen. USD EUR GBP JPY CAD AUD NZD CHF USD -0.08% -0.33% -0.58% -0.03% -0.48% -0.58% 0.10% EUR 0.08% -0.29% -0.51% 0.05% -0.39% -0.94% 0.19% GBP 0.33% 0.29% -0.22% 0.33% -0.11% -0.65% 0.33% JPY 0.58% 0.51% 0.22% 0.54% 0.04% -0.06% 0.54% CAD 0.03% -0.05% -0.33% -0.54% -0.46% -0.98% -0.01% AUD 0.48% 0.39% 0.11% -0.04% 0.46% -0.56% 0.45% NZD 0.58% 0.94% 0.65% 0.06% 0.98% 0.56% 0.99% CHF -0.10% -0.19% -0.33% -0.54% 0.01% -0.45% -0.99% 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).
10:38 Silver Price Forecast: XAG/USD tests $36.00 support after retreating from nine-day EMA
Silver price (XAG/USD) retraces its recent gains registered in the previous session, trading around $36.00 per troy ounce during the early European hours on Tuesday.
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The technical analysis of the daily chart shows the price of the precious metal remains within an ascending channel pattern, which suggests a prevailing bullish bias.Additionally, the 14-day Relative Strength Index (RSI) is still positioned above the 50 level, indicating a persistent bullish outlook. However, the Silver price remains below the nine-day Exponential Moving Average (EMA), highlighting that the short-term momentum is weaker.The XAG/USD pair could find its immediate barrier at the nine-day EMA of $36.16. A successful breach above this level would strengthen the short-term price momentum and support the pair to test the $37.32, the highest since February 2012. Further advances would open the door for the Silver price to explore the region around the upper boundary of the ascending channel around $39.50.On the downside, the Silver price is testing the ascending channel’s lower boundary around $36.00. A successful break below the channel would cause the emergence of the bearish bias and put downward pressure on the XAG/USD pair to test the 50-day EMA at $34.36. Further decline would dampen the medium-term price momentum and prompt the price of Silver to navigate the region around the two-month low at $31.65, which was recorded on May 15.XAG/USD: Daily Chart 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.
10:31 Forex Today: Oil plunges on Iran-Israel ceasefire, USD weakens ahead of Powell
Here is what you need to know on Tuesday, June 24:
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Here is what you need to know on Tuesday, June 24:Risk flows dominate the action in financial markets on Tuesday as investors cheer the announcement of a ceasefire between Iran and Israel. The European economic calendar will feature business sentiment data from Germany. In the second half of the day, Federal Reserve Chairman Jerome Powell will testify about the semiannual Monetary Policy Report before the US House Financial Services Committee. Related news US Dollar Index slides to near 98.00 on Israel-Iran ceasefire, Fed’s dovish comments Could July be the month the FOMC cuts rates? Jerome Powell's Testimony: A crucial meeting between the Fed and political power
After exchanging missile strikes for 12 days, Iran and Israel reached an agreement to end the conflict. Israel's Prime Minister Benjamin Netanyahu said on Tuesday that Israel achieved Iran war goals, adding that the country will respond forcefully to a breach of the truce. In response, crude oil prices declined sharply. After losing about 9% late Monday, the barrel of West Texas Intermediate continues to push lower and was last seen trading at around $65.50, down more than 2% on the day.The US Dollar (USD) also stays under selling pressure as the market mood improves. The USD Index was last seen fluctuating at around 98.00, losing about 0.3%. Meanwhile, US stock index futures gain nearly 1% on the day after Wall Street's main indexes closed in positive territory on the back of a risk rally late Monday. During the American trading hours, several Fed policymakers are scheduled to deliver speeches. 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 -0.18% -0.41% -0.77% -0.10% -0.72% -0.80% 0.04% EUR 0.18% -0.25% -0.56% 0.08% -0.54% -1.05% 0.23% GBP 0.41% 0.25% -0.32% 0.35% -0.27% -0.78% 0.35% JPY 0.77% 0.56% 0.32% 0.67% -0.00% -0.08% 0.67% CAD 0.10% -0.08% -0.35% -0.67% -0.63% -1.13% -0.00% AUD 0.72% 0.54% 0.27% 0.00% 0.63% -0.51% 0.62% NZD 0.80% 1.05% 0.78% 0.08% 1.13% 0.51% 1.14% CHF -0.04% -0.23% -0.35% -0.67% 0.00% -0.62% -1.14% 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).USD/CAD trades marginally lower on the day at around 1.3700 after setting a multi-week high near 1.3800 on Monday. May Consumer Price Index (CPI) data from Canada will be watched closely by market participants later in the session.GBP/USD gained more than 0.5% on Monday and extended its rebound early Tuesday. At the time of press, the pair was up nearly 0.5%, trading slightly below 1.3600. Bank of England (BoE) Governor Andrew Bailey will testify before the Lords Economic Affairs Committee at 14:00 GMT.EUR/USD preserves its bullish momentum after posting strong gains on Monday and trades near 1.1600 in the European morning on Tuesday. Gold stays on the back foot early Tuesday and trades at its lowest level in about two weeks near $3,320, pressured by the easing geopolitical tensions.USD/JPY made a sharp U-turn after touching its highest level since mid-May above 148.00 late Monday and extended its slide early Tuesday. At the time of press, the pair was losing more than 0.7% on the day and testing 145.00. 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.
10:29 NZD/USD returns above 0.6000 as the Iran-Israel truce boosts appetite for risk
The risk-sensitive New Zealand Dollar is rallying more than 1% on Tuesday and about 2.5% from Monday’s lows as the announcement of a ceasefire in the Middle East has triggered a relief rally that sent the US Dollar tumbling.US President Donald Trump thanked Tehran for the contained response to this
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US President Donald Trump thanked Tehran for the contained response to this weekend’s massive attack on some of its key nuclear sites, and announced a “complete and total” ceasefire in the Middle East war.
Iran’s Foreign Minister affirmed that Iran will stop its attacks if Israel ceases its airstrikes, while Tel Aviv affirmed that all their targets have been reached, which gives hope of a long-lasting truce.Dovish Fedspeak is weighing on the USDIn the US, on Monday, Fed Vice Chair of Supervision, Michelle Bowman, suggested that the central bank might cut interest rates as early as July, as she said, Trump’s tariffs will likely have a smaller impact on inflation than feared.
views
These views echo the comments by Christopher Waller on Friday and have boosted expectations of a rate cut in July or, most likely, in September. Fed Chairman Powell will speak to Congress later today, and the market will be looking for any dovish hint that might add pressure on the US Dollar. 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. in
US President Donald Trump thanked Tehran for the contained response to this weekend’s massive attack on some of its key nuclear sites, and announced a “complete and total” ceasefire in the Middle East war.
Iran’s Foreign Minister affirmed that Iran will stop its attacks if Israel ceases its airstrikes, while Tel Aviv affirmed that all their targets have been reached, which gives hope of a long-lasting truce.Dovish Fedspeak is weighing on the USDIn the US, on Monday, Fed Vice Chair of Supervision, Michelle Bowman, suggested that the central bank might cut interest rates as early as July, as she said, Trump’s tariffs will likely have a smaller impact on inflation than feared.
views
These views echo the comments by Christopher Waller on Friday and have boosted expectations of a rate cut in July or, most likely, in September. Fed Chairman Powell will speak to Congress later today, and the market will be looking for any dovish hint that might add pressure on the US Dollar. 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. in
10:16 Pound Sterling surges against US Dollar as Greenback suffers from Israel-Iran ceasefire
The Pound Sterling (GBP) extends its Monday’s upside move to near 1.3600 against the US Dollar (USD) during European trading hours on Tuesday.
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The GBP/USD pair strengthens as a global risk rally driven by the ceasefire between Israel and Iran has dampened demand for safe-haven assets such as the US Dollar.The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, falls sharply to near 98.13 on Tuesday from a fresh two-week high of around 99.40 posted the previous day.During late Asian trading hours, Iranian state media confirmed a truce with Israel, stating that “a ceasefire came into effect between Iran and Israel following four waves of Iranian attacks on Israeli-occupied territories”, Reuters reported.On late Monday, United States (US) President Donald Trump confirmed in a post on Truth.Social that both Israel and Iran have agreed to a “Complete and Total CEASEFIRE”.Signs of easing Middle East tensions has sent Oil prices down almost 15% from its recent highs, in a big relief for Oil-importing nations.Daily digest market movers: Pound Sterling trades higher ahead of BoE speechesThe Pound Sterling outperforms its major peers on Tuesday, except for Asia-Pacific currencies, receiving support from upbeat preliminary United Kingdom (UK) S&P Global Purchasing Managers’ Index (PMI) data for June released on Monday and the Bank of England’s (BoE) “gradual and calibrated” monetary easing guidance.The PMI report showed that overall business activity grew at a faster-than-projected pace. The service sector activity rose steadily, while factory activity declined but at a slower-than-expected pace. The report also showed that new business volumes returned to growth after contracting for six straight months. However, firms cut jobs due to rising staffing costs after the increase in employers’ contribution to social security schemes.Last week, the BoE kept interest rates steady at 4.25%, as expected, and kept its gradual monetary expansion guidance. The UK central bank also warned of higher energy prices and downside risks to labor market.For fresh cues on the monetary policy outlook, investors BoE Governor Andrew Bailey's testimony before the Lords Economic Affairs Committee and speeches from Monetary Policy Committee (MPC) member Megan Greene and Deputy Governor Dave Ramsden during the day.In the US region, flash private sector PMI data for June came in stronger than projected. The Services PMI, which gauges activities in the services sector , came in higher at 53.1, compared to estimates of 52.9. The Manufacturing PMI steadied at 52.0, faster than expectations of 51.0. According to the PMI report, the sentiment of factory owners has increased on hopes of greater benefits from new trade policies imposed by US President Trump.On the monetary front, a sudden change in Federal Reserve (Fed) officials’ stance on the monetary policy outlook has weighed on bond yields and the US Dollar. On Tuesday, Fed Governor Michelle Bowman joined Governor Christopher Waller and argued in favor of reducing interest rates as soon as in July.“[I am] open to cutting rates as soon as the July FOMC meeting if inflation pressures stay contained,” Bowman said and warned of “signs of softness emerging in the labor market”. On Friday, Christopher Waller said that the Fed “should not wait for the job market to crash in order to cut rates."Technical Analysis: Pound Sterling returns above 20-day EMAThe Pound Sterling advances to near 1.3600 against the US Dollar on Tuesday and aims to reclaim the three-year high of 1.3630 posted on June 13. The near-term trend of the GBP/USD pair turns bullish as it returns above the 20-day Exponential Moving Average (EMA), which is around 1.3500.The 14-day Relative Strength Index (RSI) rebounds to near 60.00. A fresh bullish momentum would emerge if the RSI breaks above that level.Looking down, the May 16 low around 1.3250 will act as key support zone. On the upside, the 13 January 2022 high around 1.3750 will act as a 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.
10:12 US Dollar Index slides to near 98.00 on Israel-Iran ceasefire, Fed’s dovish comments
The US Dollar (USD) underperforms its major peers during European trading hours on Tuesday as its safe-haven demand has diminished significantly, following the announcement of 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}}The US Dollar Index falls sharply to near 98.00 as easing geopolitical tensions have diminished its safe-haven demand.US President Trump urged Israel and Iran not to violate the ceasefire agreement.Fed’s Bowman shows openness for reducing interest rates in the July meeting.The US Dollar (USD) underperforms its major peers during European trading hours on Tuesday as its safe-haven demand has diminished significantly, following the announcement of a ceasefire between Israel and Iran.Theoretically, easing geopolitical tensions reduce demand for safe-haven assets, such as the US Dollar.At the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against a basket of currencies, falls sharply to near 98.00 from the two-week high of 99.40 posted on Monday. 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 -0.28% -0.45% -0.77% -0.14% -0.81% -0.90% -0.00% EUR 0.28% -0.20% -0.51% 0.13% -0.52% -1.06% 0.29% GBP 0.45% 0.20% -0.32% 0.34% -0.32% -0.85% 0.34% JPY 0.77% 0.51% 0.32% 0.63% -0.09% -0.17% 0.65% CAD 0.14% -0.13% -0.34% -0.63% -0.68% -1.19% 0.00% AUD 0.81% 0.52% 0.32% 0.09% 0.68% -0.54% 0.67% NZD 0.90% 1.06% 0.85% 0.17% 1.19% 0.54% 1.21% CHF 0.00% -0.29% -0.34% -0.65% -0.01% -0.67% -1.21% 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).
During the European trading session, United States (US) President Donald Trump stated in a post on Truth.Social that both Israel and Iran have agreed to a truce and urged them not to violate. “The ceasefire is now in effect. Please do not violate it!" Trump wrote.The aerial war between Israel and Iran has stopped on its 12th day, which started after Israeli Defence Forces (IDF) launched airstrikes on Iran to stop Tehran from building nuclear warheads. During the period, the US also joined Israel’s assault on Iran and dismantled Tehran’s three nuclear facilities.Another reason that is contributing to weakness in the US Dollar is a dramatic shift in Federal Reserve (Fed) officials’ stance on the monetary policy outlook. A few Fed policymakers have argued in favor of reducing interest rates in the July policy meeting, citing downside risks to labor market and limited impact of tariffs on inflation imposed by Washington since the return of US President Trump to the White House.On Monday, Fed Governor Michelle Bowman stated that she is “open to cut interest rates as soon as in the July policy meeting amid growing concerns over job market”. “It is time to consider adjusting the policy rate, and we [Fed] should put more weight on downside risks to the job market going forward,” Bowman said.Going forward, investors will focus on the US Personal Consumption Expenditure Price Index (PCE) data for May, which will be released on Friday. 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.
10:07 EUR/GBP weakens below 0.8550 ahead of speeches by BoE’s Bailey, ECB’s Lagarde
The EUR/GBP cross extends the decline to near 0.8545 during the early European session on Tuesday. The Pound Sterling (GBP) strengthens against the Euro (EUR) due to the stronger-than-expected UK June flash S&P Global Purchasing Managers’ Index (PMI) data.
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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.
09:31 Israel PM Netanyahu: Israel achieves Iran war goals
Israel's Prime Minister Benjamin Netanyahu said on Tuesday that Israel achieved Iran war goals, adding that the country will respond forcefully to a breach of truce.
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Israel's Prime Minister Benjamin Netanyahu said on Tuesday that Israel achieved Iran war goals, adding that the country will respond forcefully to a breach of truce.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.Key quotesIsrael told the US it agreed to a ceasefire with Iran.
Will respond forcefully to a breach of truce.Market reactionAt the time of writing, the West Texas Intermediate (WTI) is trading 3.41% lower on the day to trade at $64.73. The Gold price (XAU/USD) is trading 1.34% 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.
Will respond forcefully to a breach of truce.Market reactionAt the time of writing, the West Texas Intermediate (WTI) is trading 3.41% lower on the day to trade at $64.73. The Gold price (XAU/USD) is trading 1.34% 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.
09:02 Crude Oil price today: WTI price bearish at European opening
West Texas Intermediate (WTI) Oil price falls on Tuesday, early in the European session. WTI trades at $65.56 per barrel, down from Monday’s close at $66.99.Brent Oil Exchange Rate (Brent crude) is also shedding ground, trading at $68.05 after its previous daily close at $69.27.
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West Texas Intermediate (WTI) Oil price falls on Tuesday, early in the European session. WTI trades at $65.56 per barrel, down from Monday’s close at $66.99.
Brent Oil Exchange Rate (Brent crude) is also shedding ground, trading at $68.05 after its previous daily close at $69.27. 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.
Brent Oil Exchange Rate (Brent crude) is also shedding ground, trading at $68.05 after its previous daily close at $69.27. 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.
09:00 FX option expiries for Jun 24 NY cut
FX option expiries for Jun 24 NY cut at 10:00 Eastern Time vi a DTCC can be found below.
FX option expiries for Jun 24 NY cut at 10:00 Eastern Time vi a DTCC can be found below.EUR/USD: EUR amounts1.1500 681m1.1530 618m1.1550 1.3bUSD/JPY: USD amounts 145.00 597mUSD/CAD: USD amounts 1.3600 418m1.3775 724m
08:57 US President Donald Trump: We should be at least two to three points lower
US President Donald Trump said on Tuesday that US interest rates should be at least two to three points lower and the Federal Reserve (Fed) could hike them later if things turned negative, per Reuters.
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US President Donald Trump said on Tuesday that US interest rates should be at least two to three points lower and the Federal Reserve (Fed) could hike them later if things turned negative, per Reuters. Key quotesWe should be at least two to three points lower.
If things later change to the negative, increase the rate. Market reactionAt the time of press, the US Dollar Index (DXY) was down 0.29% on the day at 98.08. 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.
If things later change to the negative, increase the rate. Market reactionAt the time of press, the US Dollar Index (DXY) was down 0.29% on the day at 98.08. 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.
08:41 USD/CAD Price Forecast: Bearish outlook remains in play below 1.3750
The USD/CAD pair trades in negative territory around 1.3720 during the early European session on Tuesday. The Greenback weakens against the Canadian Dollar (CAD) as a ceasefire between Iran and Israel comes into effect following four waves of Iranian attacks on Israeli-occupied territories.
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The pair keeps the negative outlook below the 100-day EMA with a bearish RSI indicator. The initial support emerges at 1.3635; the first upside barrier is located at 1.3820.The USD/CAD pair trades in negative territory around 1.3720 during the early European session on Tuesday. The Greenback weakens against the Canadian Dollar (CAD) as a ceasefire between Iran and Israel comes into effect following four waves of Iranian attacks on Israeli-occupied territories. Furthermore, the dovish comments from the US Federal Reserve (Fed) policymakers also undermine the US Dollar (USD). Fed Governor Michelle Bowman said Monday she would favor an interest rate reduction at the next policy meeting in July so long as inflation pressures stay muted. According to the daily chart, the bearish outlook of USD/CAD remains in play as the pair remains capped below the key 100-day Exponential Moving Average (EMA). The path of least resistance is to the downside, with the 14-day Relative Strength Index standing below the midline near 47.75.The first downside target for the pair emerges at 1.3635, the low of June 18. Extended losses could see a drop to 1.3575, the lower limit of the Bollinger Band. The next contention level for USD/CAD is seen at 1.3540, the low of June 16. On the bright side, the immediate resistance level is located at 1.3820, the upper boundary of the Bollinger Band. Sustained trading above this level could attract some buyers to 1.3862, the high of May 29. Further north, the next hurdle to watch is 1.3935, the 100-day EMA.USD/CAD Daily 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.
08:34 GBP/JPY Price Forecast: Holds Ascending Triangle breakout
The GBP/JPY pair corrects slightly to near 197.35 during European trading hours on Tuesday after revisiting an almost six-month high around 198.20 the previous day.
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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}}GBP/JPY retraces to near 197.35 after revisiting an almost six-month high around 198.20.Lower Oil price has strengthened the demand of the Japanese Yen.Upbeat flash UK PMI data for June has supported the Pound Sterling.The GBP/JPY pair corrects slightly to near 197.35 during European trading hours on Tuesday after revisiting an almost six-month high around 198.20 the previous day. The cross faces slight selling pressure as the Japanese Yen (JPY) gains due to a sharp decline in the Oil price, following the Israel-Iran ceasefire. 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 US Dollar. USD EUR GBP JPY CAD AUD NZD CHF USD -0.29% -0.33% -0.51% -0.11% -0.57% -0.61% 0.03% EUR 0.29% -0.08% -0.24% 0.17% -0.28% -0.76% 0.33% GBP 0.33% 0.08% -0.16% 0.26% -0.20% -0.67% 0.26% JPY 0.51% 0.24% 0.16% 0.41% -0.10% -0.14% 0.42% CAD 0.11% -0.17% -0.26% -0.41% -0.47% -0.93% 0.00% AUD 0.57% 0.28% 0.20% 0.10% 0.47% -0.48% 0.46% NZD 0.61% 0.76% 0.67% 0.14% 0.93% 0.48% 0.94% CHF -0.03% -0.33% -0.26% -0.42% -0.00% -0.46% -0.94% 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).
The Japanese currency underperformed its peers on Monday after Iran threatened to close the Strait of Hormuz, which led to a sharp increase in the Oil price. Given that the Japanese economy addresses its Oil requirements from imports, higher energy prices diminish the Japanese Yen’s appeal.Meanwhile, the Pound Sterling trades higher against its major peers, except Asia-Pacific currencies, due to upbeat preliminary United Kingdom (UK) S&P Global Purchasing Managers’ Index (PMI) data for June released on Monday. The data showed that the Composite PMI grew at a faster-than-expected pace due to outperformance in both the manufacturing and the service sector activity.The Service PMI grew expectedly to 51.3, higher than 50.9 in May. While the Manufacturing PMI declined to near 47.7 but at a slower-than-anticipated pace.GBP/JPY retraces after a breakout of the Ascending Triangle formation on a daily timeframe, which leads to wider ticks and heavy volume on the upside. The horizontal resistance of the above-mentioned chart pattern is plotted from the May 14 high around 196.41, while the upward-sloping trendline is placed from the May 22 low of 191.90.Upward-sloping 20-day Exponential Moving Average (EMA) around 195.50 suggests that the near-term trend is bullish.The 14-day Relative Strength Index (RSI) breaks above 60.00. A fresh bullish momentum would emerge if the RSI holds above that level.The pair could extend its upside towards the psychological level of 200.00 and the 23 July 2024 high of 203.16 after breaking above Monday’s high of 198.20.On the flip side, a downside move by the pair below the May 6 low of 190.33 will expose it to the March 11 low of 188.80, followed by the February 7 low of 187.00.GBP/JPY daily chart
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.
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.
08:34 AUD/JPY holds steady around 94.50 due to a risk-on mood following Israel-Iran ceasefire
AUD/JPY continues to remain stronger for the third successive session, trading around 94.50 during the Asian hours on Tuesday. The currency cross receives support from increased risk appetite since US President Donald Trump announced a "complete and total" ceasefire between Israel and Iran.
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The currency cross receives support from increased risk appetite since US President Donald Trump announced a "complete and total" ceasefire between Israel and Iran. Iran media says latest missile waves were final salvo before ceasefire took effect at 4:00 GMT.Market sentiment strengthens despite Iran’s retaliatory strike on Al Udeid, a US military base in Qatar. Qatar officials said that the missile barrage was intercepted and that the base had been evacuated in advance. Markets also reacted as Tehran decided to avoid targeting the strategic Strait of Hormuz.Trump's comments came shortly after Iran fired missiles at the Al Udeid Air Base in Qatar on Monday. Qatar officials said that the missile barrage was intercepted and that the base had been evacuated in advance.S&P Global data showed on Monday that Australia's 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. The upbeat data dampened the expectations of a short-term rate cut by the Reserve Bank of Australia (RBA).The upside of the AUD/JPY cross could be restrained as the Japanese Yen (JPY) receives support from hawkish signals from the Bank of Japan’s (BoJ) officials, who cite persistent core inflation driven by firms passing wage increases onto prices as a reason for further policy tightening.Japan's Economy Minister, Ryosei Akazawa, is planning his seventh visit to the United States (US) on June 26, raising hopes for a US-Japan trade agreement ahead of the July 9 deadline for steep reciprocal US tariffs. 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.
08:28 WTI rebounds from over one-week low, keeps the red around $66.00
West Texas Intermediate (WTI) US Crude Oil prices extend the previous day's sharp retracement slide from the $76.75 area, or a five-month peak, and attract some follow-through selling for the second straight day on Tuesday.
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The commodity, however, trims a part of its heavy Asian session losses to a nearly two-week low and currently trades just above the $66.00 mark, down over 1.30% for the day.Investors took a sigh of relief in reaction to Iran's restrained strike on a US military base in Qatar, instead of oil tankers in the Strait of Hormuz. Adding to this, US President Donald Trump announced a complete ceasefire between Israel and Iran. This helps ease market worries about supply disruptions from the Middle East – a major oil-producing region – and turns out to be a key factor weighing heavily on Crude Oil prices. Meanwhile, Traders ramped up their bets for a potential interest rate cut by the Federal Reserve (Fed) in July following the release of mixed US PMIs and dovish-sounding remarks from influential FOMC members on Monday. This, along with receding safe-haven demand, drags the US Dollar (USD) to over a one-week low and benefits the USD-denominated commodities, assisting Oil prices to rebound from the $64.15 area.Traders now look forward to the US economic docket – featuring the release of the Conference Board's Consumer Confidence Index and the Richmond Manufacturing Index. Apart from this, speeches from influential FOMC members, including Fed Chair Jerome Powell's congressional testimony, will drive the USD. This, along with geopolitical developments, should provide a fresh impetus to Oil prices later during the North American session. 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.
07:51 USD/CHF remains depressed above 0.8100; looks to Fed’s Powell for fresh impetus
The USD/CHF pair remains depressed for the second straight day and drops to over a one-week low during the Asian session on Tuesday amid a broadly weaker US Dollar (USD). Spot prices, however, lack follow-through selling and manage to hold above the 0.8100 mark.
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Spot prices, however, lack follow-through selling and manage to hold above the 0.8100 mark. Traders ramped up their bets for a potential interest rate cut by the Federal Reserve (Fed) in July following the release of mixed US PMIs and dovish-sounding remarks from influential FOMC members on Monday. Apart from this, the optimism led by US President Donald Trump's announcement, that Israel and Iran had agreed to a ceasefire, undermines the Greenback's status as the global reserve currency. The Swiss Franc (CHF), on the other hand, draws support from the Swiss National Bank's (SNB) signal that it does not plan more interest rate cuts, which disappointed some investors expecting that rates might return to negative territory this year. This, in turn, acts as a headwind for the USD/CHF pair. Moreover, the overnight breakdown below the 0.8150 support backs the case for further intraday losses.Traders, however, seem reluctant to place aggressive directional bets and opt to wait for cues about the Fed's future rate cut path. Hence, the focus remains glued to speeches from a slew of FOMC members and Fed Chair Jerome Powell's congressional testimony. Apart from this, the Conference Board's US Consumer Confidence Index would drive the USD and provide some impetus to the USD/CHF pair. 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.
07:48 EUR/USD reclaims 1.1600 as US Dollar’s safe-haven appeal diminishes
The EUR/USD pair posts a fresh weekly high to near 1.1610 during late Asian trading hours on Tuesday. The major currency pair strengthens as the US Dollar (USD) has faced a sharp sell-off, following the announcement of the Israel-Iran ceasefire by United States (US) President Donald Trump.
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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}}EUR/USD climbs to near 1.1600 as safe-haven assets lose steam after the announcement of Israel-Iran truce.Fed’s Bowman argues in favor of reducing interest rates in July.ECB’s Lagarde warns of downside risks to Eurozone economic growth.The EUR/USD pair posts a fresh weekly high to near 1.1610 during late Asian trading hours on Tuesday. The major currency pair strengthens as the US Dollar (USD) has faced a sharp sell-off, following the announcement of the Israel-Iran ceasefire by United States (US) President Donald Trump.A truce between Israel and Iran has improved investors’ risk appetite and diminished demand for safe-haven assets, such as the US Dollar. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, falls sharply to near 98.10 from its two-week high of 99.42 posted on Monday. 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 -0.31% -0.35% -0.55% -0.11% -0.61% -0.66% -0.01% EUR 0.31% -0.07% -0.27% 0.19% -0.30% -0.79% 0.31% GBP 0.35% 0.07% -0.20% 0.27% -0.22% -0.71% 0.23% JPY 0.55% 0.27% 0.20% 0.45% -0.10% -0.15% 0.42% CAD 0.11% -0.19% -0.27% -0.45% -0.50% -0.97% -0.03% AUD 0.61% 0.30% 0.22% 0.10% 0.50% -0.49% 0.46% NZD 0.66% 0.79% 0.71% 0.15% 0.97% 0.49% 0.95% CHF 0.01% -0.31% -0.23% -0.42% 0.03% -0.46% -0.95% 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).
Another reason behind weakness in the US Dollar is changing stance from Federal Reserve (Fed) officials on the monetary policy outlook towards the dovish side. On Monday, Fed Governor Michelle Bowman signaled that she is open to cut interest rates as soon as in the July policy meeting amid growing concerns over job market. “It is time to consider adjusting the policy rate, and we [Fed] should put more weight on downside risks to the job market going forward,” Bowman said.A dovish monetary policy guidance from Fed’s Bowman has led to a slight increase in market expectations for interest rate cuts in the July meeting. According to the CME FedWatch tool, the probability for the Fed to reduce interest rates next month has increased to 22.7% from 14.5% recorded on Friday.In the Eurozone region, European Central Bank (ECB) officials have become concerned over the economic outlook due to the tariff policy announced by US President Trump. A few ECB officials, including President Christine Lagarde have warned of downside risks to economic growth and cited concerns over the sustainability of inflation near the 2% target.On Monday, Christine Lagarde said in her prepared remarks before the European parliament economic committee that survey data point to “some weaker prospects for economic activity in the near term”. "Risks to the growth outlook remain tilted to the downside," Lagarde added. 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.
07:45 USD/INR tumbles at open as Oil price react negatively to Israel-Iran ceasefire
The Indian Rupee (INR) opens strongly at 86.10 against the US Dollar (USD) on Tuesday.
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The USD/INR pair slumps as the bleeding Oil price follows the announcement of the Israel-Iran ceasefire by United States (US) President Donald Trump through a post on Truth.Social has strengthened the Indian currency.The Oil price on the New York Mercantile Exchange (NYMEX) has dived over 15% from its high of $76.74. This scenario is favorable for currencies of nations that have lower Oil reserves and depend significantly on imports to address their needs, such as the Indian Rupee.Inflation in the Indian economy cools down, and the current account deficit diminishes if Oil prices remain lower.It has been fully agreed by and between Israel and Iran that there will be a Complete and Total CEASEFIRE (in approximately 6 hours from now, when Israel and Iran have wound down and completed their in-progress, final missions!), for 12 hours, at which point the War will be considered, ENDED,” Trump wrote.Following the announcement of Israel-Iran ceasefire by US President Trump, a senior Iranian official has also confirmed that Tehran agreed to Qatar mediated, US-proposed ceasefire with Israel, Reuters reported.Lower Oil prices and a sharp increase in the risk appetite of investors, following the Iran-Israel ceasefire announcement, have fuelled a strong recovery in the Indian equity market, sending Nifty50 208 points higher at open to near 25,180. Meanwhile, Sensex30 has rallied 0.85% to near 82,600. Both indices saw a sharp sell-off in the opening session on Monday after Iran threatened to close the Strait of Hormuz through which almost a quarter of the global Oil is supplied. However, they recovered sharply due to the strength in the domestic economy. On Monday, Foreign Institutional Investors (FIIs) bought Rs. 5,591.77 worth of Indian equities.Daily digest market movers: Indian Rupee strengthens against US Dollar as safe-haven demand fallsThe sharp downside move in the USD/INR pair is also driven by weakness in the US Dollar due to multiple headwinds: improving risk profile and a shift in Federal Reserve (Fed) officials’ stance on the monetary policy outlook.A sharp increase in the risk appetite of investors, following the Israel-Iran truce, has diminished the appeal of the US Dollar, which gained sharply on Monday. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, tumbles to near 98.10 during Asian trading hours on Tuesday from a fresh two-week high around 99.40 posted the previous day.On the domestic front, recent commentaries from a few Fed officials have signaled growing concerns over the labor market and increasing confidence that the impact of tariffs imposed by President Donald Trump on inflation will be limited. A scenario that bolsters hopes for an interest rate cut in the near term.On Monday, Fed Governor Michelle Bowman showed openness to reducing interest rates in the July meeting, citing downside risks to employment and confidence that the trade policy is only likely to have ‘minimal impacts’ on inflation. “It is time to consider adjusting the policy rate,” Bowman said and added, “We should put more weight on downside risks to the job market going forward.”Last week, Fed Governor Christopher Waller also argued in favor of cutting interest rates in July, citing concerns over the labor market. "The Fed should not wait for the job market to crash in order to cut rates," Waller said.Technical Analysis: USD/INR dives to near 20-day EMAThe USD/INR pair tumbled at open to near the 20-day Exponential Moving Average (EMA) around 86.10, suggesting that the near-term trend has become uncertain.The 14-day Relative Strength Index (RSI) slides vertically to near 50.00 after remaining above 60.00 in the 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 19 high of 86.93 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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07:40 GBP/USD attracts some buyers above 1.3550 after Middle East ceasefire
The GBP/USD pair gains traction to around 1.3560 during the early European session on Tuesday, bolstered by the weaker US Dollar (USD).
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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.
07:35 India Gold price today: Gold falls, according to FXStreet data
Gold prices fell in India on Tuesday, according to data compiled by FXStreet.
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Gold prices fell in India on Tuesday, according to data compiled by FXStreet.
The price for Gold stood at 9,278.06 Indian Rupees (INR) per gram, down compared with the INR 9,333.67 it cost on Monday.
The price for Gold decreased to INR 108,217.50 per tola from INR 108,866.10 per tola a day earlier. Unit measure Gold Price in INR 1 Gram 9,278.06 10 Grams 92,780.74 Tola 108,217.50 Troy Ounce 288,580.10
2025 Gold Forecast Guide [PDF] Download your free copy of the 2025 Gold Forecast
Daily digest market movers: Gold price rally extends, as Iran retaliates over US bases
On Saturday, the United States (US) delivered an attack to three of Iran’s nuclear facilities – Fordow, Natanz, and Isfahan. US President Donald Trump described the mission as “a very successful attack,” and warned that “there are many other targets” if Iran remains reluctant to peace talks.
The US Operation Midnight Hammer involved B-2 Spirit bombers and Tomahawk missiles from US submarines.
Recently, the US S&P Global Manufacturing PMI for June came in at 52, above expectations of 51 but unchanged compared to the previous reading. The Services PMI dipped from 53.7 to 53.1 in June, a tick above estimates of 52.9.
The US 10-year Treasury note yield is down seven basis points (bps) at 4.306%. US real yields, which are inversely correlated with Gold prices, followed suit, down at 1.978%.
The Fed's monetary policy report recently revealed that there are early signs that tariffs are contributing to higher inflation. However, their full impact has yet to be reflected in the data. The report added that the current policy is well-positioned and that financial stability is resilient amid high uncertainty.
Money markets suggest that traders are pricing in 57.5 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.)
07:30 Netherlands, The Gross Domestic Product n.s.a (YoY) came in at 2.2%, above expectations (2%) in 1Q
Netherlands, The Gross Domestic Product n.s.a (YoY) came in at 2.2%, above expectations (2%) in 1Q
07:30 Gold price hangs near two-week low on Israel-Iran ceasefire; downside lacks follow-through
Gold price (XAU/USD) touches a nearly two-week low, around the $3,333 area during the Asian session on Tuesday, though it lacks follow-through amid mixed fundamental cues.
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July Fed rate cut bets weigh heavily on the USD, supporting the non-yielding commodity.The XAU/USD bears also seem reluctant to commit ahead of speeches from influential FOMC members.Gold price (XAU/USD) touches a nearly two-week low, around the $3,333 area during the Asian session on Tuesday, though it lacks follow-through amid mixed fundamental cues. The global risk sentiment gets a boost in reaction to US President Donald Trump's announcement that a ceasefire had been brokered between Iran and Israel. However, Iran's foreign minister said there would be no cessation of hostilities unless Israel stopped its attacks. Moreover, the Israel Defense Forces (IDF) said that it had identified missiles launched from Iran toward southern Israel. This keeps geopolitical risks in play and helps limit losses for the safe-haven precious metal.Meanwhile, mixed US PMI data and dovish remarks by Federal Reserve (Fed) officials fueled speculations about the possibility of a rate cut in July. This drags the US Dollar (USD) to a one-week low and turns out to be another factor acting as a tailwind for the non-yielding Gold price. Furthermore, traders opt to wait for speeches from a slew of influential FOMC members, including Fed Chair Jerome Powell's congressional testimony, for cues about the future rate cut and to position for the next leg of a directional move in the commodity. This, in turn, warrants some caution for the XAU/USD bears and positioning for a further intraday depreciating move. Daily Digest Market Movers: Gold price bears seem reluctant as weaker USD offsets Iran-Israel ceasefire optimismUS President Donald Trump announced that Israel and Iran have agreed to a complete and total ceasefire, providing a goodish lift to the global risk sentiment. However, reports suggest that Israel has launched some attacks against Iran. Moreover, Iran’s Foreign Minister, Abbas Araqchi, said that if Israel stopped its illegal aggression against the Iranian people no later than 00.30 GMT on Tuesday, Iran had no intention of continuing its response afterward, per Reuters.This, along with persistent trade-related uncertainties, keeps a lid on the market optimism. Apart from this, some follow-through US Dollar selling for the second straight day assists the Gold price to stall its slide to a nearly two-week low. Meanwhile, data released on Monday showed that S&P Global’s flash Manufacturing PMI held steady at 52 in June, while the gauge for the service sector cooled slightly to 53.1 from 53.7 and the composite index slipped to 52.8 from 53.0 in May.Adding to this, Federal Reserve Governor Michelle Bowman said that the time to cut rates may be fast approaching as she has grown more worried about risks to the job market and less concerned that tariffs will cause an inflation problem.This backs Fed Governor Christopher Waller's view that the US central bank should consider cutting interest rates at its next policy meeting on July 29-30, which keeps the USD depressed and further supports the non-yielding yellow metal. Traders now look to the US economic docket – featuring the release of the Conference Board's Consumer Confidence Index and the Richmond Manufacturing Index. This, along with speeches by influential FOMC members, will drive the USD. The focus, however, will remain glued to Fed Chair Jerome Powell's testimony before the House Financial Services Committee, which could offer cues about the future rate-cut path and determine the near-term trajectory for the XAU/USD pair. Gold price could slide below trend-channel and 100-period SMAFrom a technical perspective, the commodity now seems to have found acceptance below the 100-period Simple Moving Average (SMA) on the 4-hour chart and is looking to extend the fall below a short-term ascending channel support. Moreover, oscillators on the said chart have been gaining negative traction and back the case for a further intraday depreciating move. Some follow-through selling below the $3,323-3,322 intermediate support will reaffirm the outlook and drag the Gold price to sub-$3,300 levels.On the flip side, any meaningful recovery beyond the $3,368-3,370 immediate hurdle is more likely to attract fresh sellers and remain capped near the $3,400 round figure. The latter should act as a key pivotal point, which if cleared decisively could lift the Gold price to the $3,434-3,435 area en route to the $3,451-3,452 zone, or a nearly two-month top touched last Monday. The subsequent move up could extend further towards challenging the all-time peak, around the $3,500 psychological mark. 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.
07:27 EUR/JPY Price Forecast: Trades below 169.00 after pulling back from eleven-month highs
EUR/JPY halts its three-day winning streak, trading around 168.80 during the Asian hours on Tuesday. According to the technical analysis of the daily chart, the currency cross attempts to break above the ascending channel pattern, strengthening the bullish bias.
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07:21 ECB's Villeroy: Further rate cuts still possible despite present conditions
European Central Bank policymaker Francois Villeroy de Galhau said on Tuesday that further rate cuts are still possible despite present conditions.
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European Central Bank policymaker Francois Villeroy de Galhau said on Tuesday that further rate cuts are still possible despite present conditions. Key quotesInflation expectations remain moderate.
Recent uptick in oil prices has partly offset the "significant" appreciation in the euro.
If Iran-Israel ceasefire is confirmed, possible for further policy accommodation in the next six months.
Oil price alone is not a sufficient enough guide for our reaction function.
A neutral rate and a terminal rate are not exactly the same thing.
We will see how things evolve.Market reaction At the time of press, the EUR/USD pair was up 0.22% on the day at 1.1603. 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.
Recent uptick in oil prices has partly offset the "significant" appreciation in the euro.
If Iran-Israel ceasefire is confirmed, possible for further policy accommodation in the next six months.
Oil price alone is not a sufficient enough guide for our reaction function.
A neutral rate and a terminal rate are not exactly the same thing.
We will see how things evolve.Market reaction At the time of press, the EUR/USD pair was up 0.22% on the day at 1.1603. 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.
06:14 Silver Price Forecast: XAG/USD trades around $36.00 after recovering recent losses
Silver price (XAG/USD) pared its intraday losses, trading around $36.10 per troy ounce during the Asian hours on Tuesday. Prices of precious metals, including Silver, depreciated as a ceasefire agreement between Israel and Iran dampened the safe-haven demand.
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Prices of precious metals, including Silver, depreciated as a ceasefire agreement between Israel and Iran dampened the safe-haven demand.President Trump said on Monday that a "complete and total" ceasefire between Israel and Iran will go into effect to end the conflict between the two nations. He also added that Iran will begin the truce immediately, followed by Israel after 12 hours.Trump's comments came shortly after Iran fired missiles at the Al Udeid Air Base in Qatar on Monday. Qatar officials said that the missile barrage was intercepted and that the base had been evacuated in advance.On Monday, Federal Reserve’s (Fed) Vice Chair for Supervision Michelle Bowman could support a rate cut in July 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. The non-interest-bearing Silver may attract buyers as investors look for better returns on their investments.Moreover, Fed Governor Christopher Waller highlighted on Friday that the US central bank could start easing monetary policy as soon as next month. However, Fed Chair Jerome Powell warned that ongoing policy uncertainty will keep the Fed in a rate-hold stance, and any rate cuts will be contingent on further improvement in labor and inflation data. Investors will likely observe Fed Chair Jerome Powell, who is scheduled to testify before the US Congress on Tuesday and Wednesday, in search of clues about the future direction of interest rates. 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.
05:52 US Dollar Index weakens below 98.50 as Israel‑Iran ceasefire boosts risk appetite
The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, loses ground to near 98.25 after US President Donald Trump announced the Israel-Iran ceasefire.
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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.
05:48 Japanese Yen recovers further against a broadly weaker USD; USD/JPY slides to mid-145.00s
The Japanese Yen (JPY) witnessed a dramatic intraday turnaround and recovered around 200 pips from its lowest level since May 13, touched against the retreating US Dollar (USD) on Monday.
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The momentum extends through the Asian session on Tuesday amid the divergent Bank of Japan (BoJ)-Federal Reserve (Fed) policy expectations and drags the USD/JPY pair below mid-145.00s in the last hour. Investors seem convinced that the BoJ will hike interest rates again amid signs of broadening inflation in Japan, while Fed Governor Michelle Bowman pointed to the possibility of a rate cut as soon as the July meeting. Meanwhile, reports suggest that Japan's Economy Minister and top tariff negotiator, Ryosei Akazawa, is arranging his seventh visit to the US as early as June 26. This fuels hopes for an eventual US-Japan trade deal ahead of the July 9 deadline for steep US reciprocal tariffs and underpins the JPY. Furthermore, investors remain on edge as there was no immediate confirmation of a ceasefire deal by Israel or Iran, which is seen as another factor lending support to the safe-haven JPY. This, along with some follow-through USD selling, contributes to the USD/JPY pair's ongoing decline and supports prospects for additional losses. Japanese Yen bulls regain control amid relatively hawkish BoJ expectationsThe Bank of Japan's decision last week to slow the pace of reduction in its bond purchases from fiscal 2026 forced investors to push back their expectations about the likely timing of the next interest rate hike. However, data released last Friday showed that Japan's core inflation rose to a more than two-year high in May and remained above the central bank's 2% target for well over three years. Moreover, the better-than-expected release of Japan's PMI on Monday keeps the door open for further rate hikes by the BoJ in the coming month. Meanwhile, reports that the first ministerial-level tariff negotiation since the Japan-US summit in Canada could be held as early as June 26 ease concerns about the economic fallout from steep US tariffs and provide an additional boost to the Japanese Yen. In contrast, the US Dollar extends the previous day's retracement slide from over a one-week high in the wake of mixed US PMIs and dovish-sounding remarks from Federal Reserve officials on Monday. The S&P Global’s flash Manufacturing PMI held steady at 52 in June, while the gauge for the service sector cooled slightly to 53.1 from 53.7, and the composite index slipped to 52.8 from 53.0 in May.Adding to this, Fed Governor Michelle Bowman said that the time to cut rates may be fast approaching as she has grown more worried about risks to the job market and less concerned that tariffs will cause an inflation problem. Furthermore, Chicago Fed President Austan Goolsbee also said that, thus far, the surge in tariffs has had a more modest impact on the economy relative to what was expected.This comes on top of Fed Governor Christopher Waller's remarks last Friday that the US central bank should consider cutting rates at its next policy meeting on July 29-30. Traders are now pricing in 58 basis points of interest rate cuts by the Fed this year, suggesting that two 25-bps rate cuts are certain and a rising chance of a third reduction. This marks a sharp divergence from hawkish BoJ expectations. On the geopolitical front, US President Donald Trump announced on Truth Social that Israel and Iran have agreed to a complete and total ceasefire. Israel, however, is yet to comment officially, while Iran's foreign minister says that if Israel stops its attacks, Iran will also bring an end to its strikes. This, along with trade-related uncertainties, should keep a lid on the optimism and benefit the safe-haven JPY. Traders now look forward to Fed Chair Jerome Powell's congressional testimony, which, along with speeches by a slew of influential FOMC members, will be scrutinized for cues about the future rate-cut path. Apart from this, the US macro data – the Conference Board's Consumer Confidence Index and the Richmond Manufacturing Index – would drive the USD and provide some impetus to the USD/JPY pair. USD/JPY could accelerate the fall once the 145.40 support is broken decisivelyFrom a technical perspective, the downfall drags the USD/JPY pair below the 100-hour Simple Moving Average (SMA), though stalls ahead of the 50% retracement level of the recent strong move higher. Moreover, mixed oscillators on hourly and daily charts make it prudent to wait for a sustained break below the said support, around the 145.40 area, before positioning for further losses towards the 145.00 psychological mark. The latter should act as a near-term base, which, if broken decisively, might shift the bias in favor of bearish traders and prompt some technical selling. On the flip side, the 146.00 round figure, which coincides with the 38.2% Fibonacci retracement level, now seems to act as an immediate strong barrier, above which the USD/JPY pair could climb to the 146.70-146.75 area (23.6% Fibo. level). Some follow-through buying, leading to a subsequent strength beyond the 147.00 mark, could lift spot prices to the 147.40-147.45 intermediate hurdle en route to the 148.00 round figure and 148.65 region, or the May monthly swing high. 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.
05:31 Iran launches ballistic missiles toward southern Israel
The Israel Defense Forces (IDF) said early Tuesday that it had identified missiles launched from Iran toward southern Israel a short while ago.
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The Israel Defense Forces (IDF) said early Tuesday that it had identified missiles launched from Iran toward southern Israel a short while ago. Iran’s Foreign Minister, Abbas Araqchi, said early Tuesday that if Israel stopped its "illegal aggression" against the Iranian people no later than 4 a.m. Tehran time (00.30 GMT) on Tuesday, Iran had no intention of continuing its response afterwards, per Reuters. Market reactionAt the time of writing, the West Texas Intermediate (WTI) is trading 1.25% lower on the day to trade at $66.15. The Gold price (XAU/USD) is trading 0.62% lower on the day to trade at $3,345. 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.
05:20 Australian Dollar extends gains as Trump announces ceasefire in the Middle East
The Australian Dollar (AUD) appreciates against the US Dollar (USD) on Tuesday, extending its gains for the second successive session. The AUD/USD pair gains ground after US President Donald Trump said a ceasefire has been agreed upon between Iran and Israel.
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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 Australian Dollar advances as a ceasefire has been agreed upon between Iran and Israel.The upbeat S&P Global Australia PMI data dampened expectations of the RBA cutting interest rates anytime soon.Fed Governor Michelle Bowman stated that the time to cut interest rates is approaching.The Australian Dollar (AUD) appreciates against the US Dollar (USD) on Tuesday, extending its gains for the second successive session. The AUD/USD pair gains ground after US President Donald Trump said a ceasefire has been agreed upon between Iran and Israel. Trump said that a "complete and total" ceasefire between Israel and Iran will go into effect to end the conflict between the two nations.Iran fired missiles at the Al Udeid Air Base in Qatar on Monday. Qatar officials said that the missile barrage was intercepted and that the base had been evacuated in advance. Trump announced late Saturday that he had "obliterated" Iran's three nuclear facilities, including Fordow, Natanz, and Isfahan, in strikes overnight. Iranian parliament approved a measure to close the Strait of Hormuz.The latest upbeat S&P Global Purchasing Managers Index (PMI) data revealed that Australia’s private sector grew at its second-fastest pace in ten months, weakening short-term rate cut expectations by the Reserve Bank of Australia (RBA).Australian Dollar appreciates as the US Dollar holds losses amid improved market sentimentThe US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is trading at around 98.20 at the time of writing. The Greenback faced challenges following the dovish remarks from the Federal Reserve (Fed) officials.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.Federal Reserve (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.Fed Chair Jerome Powell warned that ongoing policy uncertainty will keep the Fed in a rate-hold stance, and any rate cuts will be contingent on further improvement in labor and inflation data.The People’s Bank of China (PBOC) decided to leave its Loan Prime Rates (LPRs) unchanged on Friday. The one-year and five-year LPRs were at 3.00% and 3.50%, respectively.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 tests nine-day EMA near 0.6500AUD/USD is trading around 0.6480 on Tuesday. The technical analysis of the daily chart shows a revival of the bullish bias, as the pair has rebounded to the ascending channel pattern. Additionally, the 14-day Relative Strength Index (RSI) has moved slightly above the 50 mark, strengthening the bearish bias. However, the pair is still below the nine-day Exponential Moving Average (EMA), indicating that short-term price momentum is weaker.The AUD/USD pair is primarily testing the nine-day EMA at 0.6480. A successful breach above this level would reinforce the bullish sentiment and lead the pair to approach the seven-month high of 0.6552, which was recorded on June 16, followed by the ascending channel’s upper boundary around 0.6600.On the downside, the immediate support appears at the lower boundary of the ascending channel around 0.6440, aligned with the 50-day EMA at 0.6435. A break below this crucial support zone would help the bearish bias to grow and put downward pressure on the AUD/USD pair to test the “throwback support” around the psychological level of 0.6400. A break below this level may prompt the pair to navigate the region around 0.5914, the lowest level since March 2020.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 Swiss Franc. USD EUR GBP JPY CAD AUD NZD CHF USD -0.11% -0.12% -0.34% -0.04% -0.34% -0.31% 0.17% EUR 0.11% -0.04% -0.24% 0.07% -0.22% -0.63% 0.30% GBP 0.12% 0.04% -0.20% 0.12% -0.18% -0.61% 0.19% JPY 0.34% 0.24% 0.20% 0.31% -0.03% -0.00% 0.39% CAD 0.04% -0.07% -0.12% -0.31% -0.31% -0.71% 0.07% AUD 0.34% 0.22% 0.18% 0.03% 0.31% -0.41% 0.37% NZD 0.31% 0.63% 0.61% 0.00% 0.71% 0.41% 0.78% CHF -0.17% -0.30% -0.19% -0.39% -0.07% -0.37% -0.78% 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). 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.
04:28 NZD/USD strengthens to near 0.6000 on dovish Fed comments and hopes of an Israel-Iran ceasefire
NZD/USD gathers strength to near 0.5995 in Tuesday’s early Asian session, adding 0.35% on the day.
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The US Dollar (USD) softens against the New Zealand Dollar (NZD) due to dovish Fedspeak. Investors will keep an eye on Chair Powell’s semiannual testimonies and the US June Consumer Confidence report later on Tuesday.Fed’s Vice Chair for Supervision Michelle Bowman, a well-known hawk, said on Monday that the US central bank should consider interest rate cuts soon, as risks to the job market may be on the rise and on rising expectations that Iran's response to the US bombing of some nuclear sites in Iran will be limited.According to Reuters, traders raised bets on further rate cuts after Fed Governor Christopher Waller said on Friday that the Fed should consider reducing rates at its July meeting. The markets were pricing in 46 basis points (bps) of cuts this year before Waller's comments.Fed’s Powell will testify before the US Congress on Tuesday and Wednesday. Any surprise hawkish comments from Fed policymakers could help limit the USD’s losses and create a headwind for the pair in the near term.The stronger-than-expected New Zealand’s Q1 Gross Domestic Product (GDP) data released last week provides some support to the Kiwi against the USD. Traders expect the Reserve Bank of New Zealand (RBNZ) to deliver only one more rate cut in the current easing cycle, likely to be fully priced in by November. 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.
04:15 PBOC sets USD/CNY reference rate at 7.1656 vs. 7.1710 previous
The People’s Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead on Tuesday at 7.1656 as compared to the previous day's fix of 7.1710 and 7.1605 Reuters estimate.
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The People’s Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead on Tuesday at 7.1656 as compared to the previous day's fix of 7.1710 and 7.1605 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.
04:05 Iran's Foreign Minister says Iran will stop if Israel does
Iran's Foreign Minister, Abbas Araghchi, said early Tuesday in a post on social media that there was no cease-fire agreement but that Iran will stop its attacks if Israel stops its airstrikes by 4 a.m. local time in Tehran, per the New York Times.
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Iran's Foreign Minister, Abbas Araghchi, said early Tuesday in a post on social media that there was no cease-fire agreement but that Iran will stop its attacks if Israel stops its airstrikes by 4 a.m. local time in Tehran, per the New York Times. Key quotesAs of now, there is NO ‘agreement’ on any ceasefire or cessation of military operations.
However, provided that the Israeli regime stops its illegal aggression against the Iranian people no later than 4 am Tehran time, we have no intention to continue our response afterwards.Market reactionAt the time of writing, the West Texas Intermediate (WTI) is trading 1.33% lower on the day to trade at $66.10. The Gold price (XAU/USD) is trading 0.57% lower on the day to trade at $3,350. 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.
However, provided that the Israeli regime stops its illegal aggression against the Iranian people no later than 4 am Tehran time, we have no intention to continue our response afterwards.Market reactionAt the time of writing, the West Texas Intermediate (WTI) is trading 1.33% lower on the day to trade at $66.10. The Gold price (XAU/USD) is trading 0.57% lower on the day to trade at $3,350. 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.
03:19 WTI tumbles to near $65.00 as Trump announces Israel-Iran ceasefire
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $65.15 during the Asian trading hours on Tuesday. The WTI price falls as US President Donald Trump said a ceasefire has been agreed upon between Iran and Israel, relieving fears of supply disruption in the region.
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Iran’s retaliatory missile strike on a US airbase raised hopes that the conflict would not immediately disrupt oil supplies. The Fed’s dovish tone might weigh on the US dollar and help limit the WTI’s losses. West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $65.15 during the Asian trading hours on Tuesday. The WTI price falls as US President Donald Trump said a ceasefire has been agreed upon between Iran and Israel, relieving fears of supply disruption in the region. Iran’s parliament has voted to shut down the Strait of Hormuz in retaliation against Trump’s attack on the country over the weekend. However, no casualties were reported after the strike. Instead, Iran attacked a US military base in Qatar in retaliation for the US attacks on its nuclear facilities. Furthermore, Trump said on Monday that a "complete and total" ceasefire between Israel and Iran will go into effect in order to end the conflict between the two nations. The initial impact of the conflict on oil and gas markets remained relatively limited, which might undermine the WTI price in the near term. On the other hand, the dovish remarks from the Federal Reserve (Fed) officials could weigh on the Greenback and support the USD-denominated commodity price. Fed’s Vice Chair for Supervision Michelle Bowman said on Monday that the time to cut interest rates is getting nearer as risks to the job market may be on the rise. A weaker USD makes oil cheaper for foreign buyers, increasing demand and pushing prices higher.Oil traders will take more cues from Chair Jerome Powell’s semiannual testimonies and the release of US Consumer Confidence later on Tuesday. Also, weekly crude oil stock from the American Petroleum Institute (API) is due later in the same day. 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.
02:48 GBP/USD gains ground as investor sentiment bets on Middle East cooldown
GBP/USD gained ground on Monday, lurching higher after the US chose to get directly involved in the spiraling Israel-Iran conflict that started recently.
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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.
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.
02:19 USD/CAD holds below 1.3750 amid hope for Israel-Iran ceasefire
The USD/CAD pair trades with mild losses near 1.3730 during the early Asian session on Monday. The dovish remarks from the Federal Reserve (Fed) officials and easing tension in the Middle East weigh on the US Dollar (USD).
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Fed’s Bowman said the time to cut interest rates is getting nearer. Hopes of de-escalating the Middle East conflict after Iran’s strike against a US base undermine the US Dollar. The USD/CAD pair trades with mild losses near 1.3730 during the early Asian session on Monday. The dovish remarks from the Federal Reserve (Fed) officials and easing tension in the Middle East weigh on the US Dollar (USD). Investors brace for Chair Jerome Powell’s semiannual testimonies and the release of US Consumer Confidence later on Tuesday. Fed’s Vice Chair for Supervision Michelle Bowman said on Monday that the time to cut interest rates is getting nearer as risks to the job market may be on the rise. Bowman added that inflation appears to be on a sustained path back to 2% and she is less concerned that tariffs will cause an inflation problem. Her dovish comments have dragged the Greenback lower against the Canadian Dollar (CAD). Iran fired missiles at the Al Udeid Air Base in Qatar on Monday. Qatar officials said that the missile barrage was intercepted and that the base had been evacuated in advance. Reuters reported early Tuesday that US President Donald Trump said that a "complete and total" ceasefire between Israel and Iran will go into effect in order to end the conflict between the two nations. A senior Iranian official confirmed to Reuters that Tehran agreed to a Qatari-mediated, US-proposed ceasefire with Israel. Hopes of de-escalating the Middle East conflict undermine the safe-haven currency like the US Dollar. Meanwhile, a fall in Crude Oil prices might weigh on 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.
02:04 AUD/JPY Price Forecast: Consolidates above 94.30 as Trump announces ceasefire in Middle East
The AUD/JPY consolidates within the 93.80-94.70 range for the third straight trading day, yet it is slightly up 0.21%, trading at 94.35 as Tuesday’s Asian session begins.
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01:43 US President Donald Trump announces Israel-Iran ceasefire - Reuters
US President Donald Trump said on Monday that a "complete and total" ceasefire between Israel and Iran will go into effect in order to end the conflict between the two nations, per Reuters.
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US President Donald Trump said on Monday that a "complete and total" ceasefire between Israel and Iran will go into effect in order to end the conflict between the two nations, per Reuters. “It has been fully agreed by and between Israel and Iran that there will be a Complete and Total CEASEFIRE (in approximately 6 hours from now, when Israel and Iran have wound down and completed their in-progress, final missions!), for 12 hours, at which point the War will be considered, ENDED,” Trump wrote on social media.However, Iran and Israel have made no statements about a pending ceasefire.Market reactionAt the time of writing, the West Texas Intermediate (WTI) is trading 2.25% lower on the day to trade at $65.45. The Gold price (XAU/USD) is trading 0.31% lower on the day to trade at $3,357. 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.
01:02 United States CFTC Gold NC Net Positions: $200.6K vs $187.5K
United States CFTC Gold NC Net Positions: $200.6K vs $187.5K
01:02 Japan CFTC JPY NC Net Positions fell from previous ¥144.6K to ¥130.9K
Japan CFTC JPY NC Net Positions fell from previous ¥144.6K to ¥130.9K
01:02 Eurozone CFTC EUR NC Net Positions rose from previous €93K to €101.6K
Eurozone CFTC EUR NC Net Positions rose from previous €93K to €101.6K
01:02 Australia CFTC AUD NC Net Positions climbed from previous $-69.9K to $-69.4K
Australia CFTC AUD NC Net Positions climbed from previous $-69.9K to $-69.4K
01:01 United States CFTC Oil NC Net Positions rose from previous 191.9K to 231K
United States CFTC Oil NC Net Positions rose from previous 191.9K to 231K
01:01 United Kingdom CFTC GBP NC Net Positions down to £42.9K from previous £51.6K
United Kingdom CFTC GBP NC Net Positions down to £42.9K from previous £51.6K
01:01 United States CFTC S&P 500 NC Net Positions down to $-174.1K from previous $-127.7K
United States CFTC S&P 500 NC Net Positions down to $-174.1K from previous $-127.7K
00:05 EUR/USD climbs despite weak EU PMIs, Middle East conflict dominates sentiment
The Euro (EUR) advances against the US Dollar (USD) on Monday, despite the market mood remaining downbeat amid the Middle East crisis.
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Worse than expected HCOB Flash PMIs in the Eurozone barely weighed in the shared currency, while German PMIs showed a slight improvement, though they remained in contractionary territory. At the time of writing, EUR/USD trades at 1.1567, up 0.40%.Geopolitics are the primary driver on Monday, as we head into the latest trading week in June. Last Saturday, the US delivered an attack on the three most critical nuclear facilities in Iran, following failed efforts by the White House to reach a deal with Tehran.Consequently, Iran delivered strikes on a US base in Qatar. Regarding the Ain al-Assad base in Iraq, sirens were activated, as preparation for an expected attack, but there were no missiles launched. Alongside military action, Iran’s parliament decided to suspend cooperation with the International Atomic Energy Agency (IAEA).Data-wise, S&P Global revealed that business activity in the US expanded in the manufacturing sector. Regarding services, companies reported that they’re growing at a healthy pace, despite June numbers dipping compared to the previous month’s print.Across the pond, Eurozone HCOB Flash PMIs deteriorated further, missing estimates. In Germany, Flash PMIs improved, providing some relief on the shared currency, even though the European Central Bank (ECB) President Christine Lagarde mentioned that “survey data point overall to some weaker prospects for economic activity in the near-term.”Now, EUR/USD traders' attention shifts to Federal Reserve (Fed) Chair Jerome Powell's testimony before the US Congress and Fed speakers. In the Eurozone, the docket will feature the release of Germany’s IFO Business Climate for June, and speeches by ECB De Guindos and ECB Chief Economist Philip Lane.Daily digest market movers: EUR/USD boosted by Fed’s dovish tiltEUR/USD extended a leg up after Fed Governor Michelle Bowman shifted dovish and said that she’s open to reducing interest rates at the July Federal Open Market Committee (FOMC) meeting, if inflation pressures remained contained.The US S&P Global Manufacturing PMI remained steady at 52 in June, surpassing expectations of 51 and indicating continued expansion in the sector. Meanwhile, the Services PMI eased to 53.1 from 53.7, though it slightly outperformed forecasts of 52.9.The US Dollar Index (DXY), which tracks the buck’s performance against a basket of six currencies, drops 0.42% to 98.35. US Treasury bond yields are also on the back foot, a tailwind for Gold prices.The Eurozone HCOB Manufacturing PMI for June was unchanged at 49.4 in contraction territory, below forecasts of 49.8. The Services PMI improved from 49.7 to 50 as projected. Germany’s HCOB Manufacturing PMI improved from 48.3 to 49 as expected, while the Services PMI improved from 47.1 to 49.4 but remained shy of expansionary territory.Last week, the Fed Chair Jerome Powell said they’re in wait-and-see mode, adding that policy is modestly restrictive. He added that as long as the labor market remains solid and inflation cools down, holding rates is the “right thing to do.”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 surges past 1.1550 as bulls target 1.1600EUR/USD is upwardly biased, having gapped down and opened the week at around 1.1454, due to risk aversion. Nevertheless, as sentiment improved and Fed Governor Bowman tilted dovish, the pair reclaimed 1.1500, extending its gains past 1.1550.The Relative Strength Index (RSI) resumed its upward path, an indication that buyers are gathering steam. That said, the EUR/USD path of least resistance is tilted to the upside. The first resistance would be the 1.1600 figure, followed by the June 12 yearly peak of 1.1631. On further strength, the pair could aim towards 1.1650 and 1.1700.Conversely, if it tumbles below 1.1550, it paves the way for testing 1.1500. Once cleared, the next support is the 20-day Simple Moving Average (SMA) at 1.1450 ahead of 1.1400. 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.
00:03 Silver Price Forecast: XAG/USD steadies above $36.00 as bulls regain control
Silver prices stabilized as the week began, rising 0.39%, as slight risk aversion amid heightened geopolitical tensions provided support. XAG/USD reached a daily high of $36.36 before settling at $36.14, ending three days of losses.
.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}}Silver rebounds from last week’s low of $35.51, climbs above $36.00 with 1.7% recovery.RSI points to bullish momentum; key resistance at $36.50 and $37.32 yearly high.Close below $36.00 could expose support levels at $35.46 and $34.59.Silver prices stabilized as the week began, rising 0.39%, as slight risk aversion amid heightened geopolitical tensions provided support. XAG/USD reached a daily high of $36.36 before settling at $36.14, ending three days of losses.XAG/USD Price Forecast: Technical outlookSilver remains upwardly biased, despite hitting a weekly low of $35.51 last week. Since then, XAG/USD recovered over 1.70%, lifting the grey metal price above $36.00, and paving the way for further upside.The Relative Strength Index (RSI) shows that buyers remain in control. Therefore, further upside is seen.If XAG/USD rises past $36.50, this will expose the $37.00 figure. The next supply zone of interest would be the June 18 yearly high at $37.32, ahead of $37.50Conversely, a daily close below $36.00 could sponsor a move towards the June 12 swing low of $35.46, ahead of March 28 peak turned support at $34.59.XAG/USD Price Chart – Daily 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.
00:00 South Korea Consumer Sentiment Index up to 108.7 in June from previous 101.8
South Korea Consumer Sentiment Index up to 108.7 in June from previous 101.8
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