Forex News

ING’s Frantisek Taborsky highlights that Central and Eastern European FX is being driven by global headlines and hawkish US repricing, with local data having limited impact. Despite higher local rate expectations in Poland and Czech Republic, he warns that a stronger Dollar and risk-off sentiment are pressuring regional currencies, leaving the Polish Zloty most exposed within its 4.225–4.265 range.

US repricing and EM sell-off hit region

"Global headlines and hawkish US repricing continue to drive the regional story, while the busy CEE calendar is having only a limited impact."

"The CEE market saw strong hawkish repricing last week, not only due to Friday's US job data. Market pricing has returned to almost three rate hikes in Poland and almost four rate hikes in the Czech Republic in the one-year horizon."

"Despite the support of higher local rates, a stronger US dollar is, however, setting the direction for FX in CEE. The region is following the EM sell-off, erasing gains from the previous days."

"At the same time, the risk-off mood coming from the global equity and rates markets suggests more pain for the CEE region in the days ahead."

"At the moment, the Polish zloty appears to be the most vulnerable currency in the region, given the dovish National Bank of Poland story, with scope to test the upper end of its current 4.225–4.265 range."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• Silver steadies above its 200-day SMA after last week's sharp decline.
• Higher-for-longer Fed rate expectations continue to cap demand for the non-yielding metal.
• XAG/USD remains below the 50- and 100-day SMAs, keeping the near-term technical outlook bearish.

Silver (XAG/USD) trades modestly higher on Monday after falling nearly 8% on Friday in the wake of a stronger-than-expected US Nonfarm Payrolls (NFP) report, which reinforced expectations that the Federal Reserve (Fed) will keep interest rates higher for longer.

At the time of writing, XAG/USD is trading around $68.50 after touching $66.18 earlier in the day, its lowest level since March 25.

The mild rebound comes as the US Dollar (USD) softens after Iran's Fars News Agency reported that Iran had ended its military operations against Israel following renewed hostilities over the weekend. US President Donald Trump also said that peace talks with Tehran remain ongoing, keeping traders cautiously optimistic about a possible end to the war in the Middle East.

However, the upside in Silver appears limited amid rising expectations of a hawkish Fed, while the broader technical outlook suggests bears still hold the upper hand.

Traders now look ahead to US inflation data due later this week, which could provide fresh clues on the Fed's monetary policy path and drive the next move in both the USD and XAG/USD.

Technical Analysis:

On the daily chart, XAG/USD holds a bearish bias as prices remain below the 50- and 100-day Simple Moving Averages (SMAs). However, the 200-day SMA near $67.94 is providing immediate support and helping to stabilize price action following last week's sharp selloff.

Momentum indicators remain tilted to the downside. The Relative Strength Index (RSI) is hovering around 37, suggesting bearish momentum is still in place, although conditions are not yet oversold. Meanwhile, the Average Directional Index (ADX) near 17 points to a relatively weak trend, indicating that the recent decline has lacked strong conviction.

On the upside, the first resistance level comes in at the 50-day SMA around $76.15. A sustained move above this area could open the door toward the 100-day SMA near $80.38. On the downside, the 200-day SMA at $67.94 remains the key support to watch. A daily close below this level would reinforce the bearish outlook and expose XAG/USD to deeper losses.

(The technical analysis of this story was written with the help of an AI tool.)

• WTI gains more than 1.5% on Monday and trades around $89.95, supported by escalating tensions between Israel and Iran.
• Attacks claimed by the Houthis and threats from Iran fuel concerns about regional energy flows.
• Investors are downplaying the production increase announced by OPEC+, believing geopolitical risks currently outweigh additional supply.

West Texas Intermediate (WTI) US Oil trades around $89.95 at the time of writing on Monday, up 1.57% on the day, as geopolitical tensions in the Middle East continue to support energy prices.

The Crude Oil had surged earlier in the day after a fresh deterioration in relations between Israel and Iran. The Iran-backed Houthi militias announced attacks against Israel and imposed a ban on Israeli vessels in the Red Sea, while new reciprocal strikes between Israel and Iran raised fears of a broader regional conflict.

A spokesperson for Iran’s foreign ministry stated that the ceasefire had been violated repeatedly and warned that the latest developments would further undermine the peace process with the United States. Meanwhile, Iran’s Parliamentary Speaker Mohammad Baqer Ghalibaf warned that US and allied military bases in the region could become “legitimate targets,” heightening market concerns over risks to global energy supply.

These tensions come as the Strait of Hormuz remains at the center of investors’ attention. Markets continue to assess the potential impact of any prolonged disruption to this strategic waterway, through which a significant share of global Oil exports passes.

At the same time, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) announced a production increase of 188,000 barrels per day starting in July. However, the market views this increase as cautious.

However, Oil prices have trimmed a large portion of their earlier gains after reports from Fars News indicated that Iran's armed forces had announced an end to military operations against Israel. According to the report, Tehran warned that any renewed Israeli attacks on Lebanon could trigger a harsher response, although the statement has not yet been confirmed by other media outlets.

The announcement came shortly after United States (US) President Donald Trump called on both Israel and Iran to immediately halt hostilities. Following the headlines, WTI Oil retreated sharply from its intraday high near $93.50, as investors reassessed the immediate risk of a broader disruption to regional energy supplies.

According to BNY’s Bob Savage, the balance between conflict-related risks and the gradual addition of new supply will continue to drive Oil price movements in the near term. Analysts at Danske Bank also note that the recent rally reflects a reassessment of regional supply risks. The bank believes hopes for a broader agreement that could restore stable energy flows have faded following the latest military exchanges between Israel and Iran.

Looking further ahead, Société Générale argues that the Oil market may still be underestimating underlying supply pressures. The bank points out that global inventories continue to decline and believes higher prices may ultimately be required to restore a sustainable balance in the energy market.

BNY’s Bob Savage highlights that South Korean policymakers held an emergency meeting and vowed stern action against speculative FX activity as USD/KRW trades at its weakest since 2009. The National Pension Service has resumed forward FX selling under a higher hedge ratio framework. Despite KRW support, KOSPI has dropped sharply, underscoring broader risk-off pressure on Korean assets.

Policy support as won tests lows

"The FX markets saw KRW gain 1% after government plans to support the currency even as its KOSPI stock index fell 8%."

"South Korean top economic and financial policymakers held an emergency meeting, and vowed stern action against speculative and market-disruptive foreign exchange activities as the won weakens."

"Officials said they will monitor the FX market around the clock and act swiftly if volatility worsens."

"South Korea’s National Pension Service has resumed selling forward FX contracts after pausing earlier this year, signaling active hedging as the won weakens and the market tests higher USD/KRW levels."

"According to foreign exchange authorities, the pension fund has again been offering forward sales in the Seoul FX market, and such activity is expected to continue for the time being."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

DBS Group Research economist Radhika Rao says the Reserve Bank of India (RBI) kept its policy rate at 5.25% with a neutral stance but a clearly hawkish tone, focused on inflation and currency stability. She highlights strong FY26 growth at 7.7% real Gross Domestic Product (GDP), but warns that higher Oil prices, El-Nino risks and global conflict could pressure FY27 growth and inflation.

RBI pause, growth strong but vulnerable

"The RBI monetary policy committee (MPC) left the benchmark rate unchanged at 5.25%, along our expectations, while the stance was maintained at neutral. Policy guidance was cautious, as the Governor highlighted tightening global policy conditions, prolonged West Asia crisis, pipeline inflationary risks domestically on higher oil as well as sub-normal monsoon and challenges to the growth outlook."

"If CPI inflation overshoots 5% yoy in FY27 in line with the central bank’s forecast (DBSf: 4.9% - faces upside risks), the current repo rate at 5.25% will narrow the real rate buffer considerably, opening the door to hikes."

"We see room for two hikes, 25bp each in 2HFY27 (from October) when average inflation would have surpassed the mid-point of the 2-6% target and risks of a spillover to demand/ core readings would be material."

"Markets are likely to move on from the backward-looking data and focus on potential spillover risks into FY27, particularly given the prospect of a prolonged disruption in the supply of critical inputs to downstream industries, higher energy as well as food costs impacting purchasing power and tighter financial conditions."

"We maintain our real GDP growth forecast at 6.5% for FY27, compared to RBI’s revised 6.6% estimate."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

The New York Federal Reserve Bank released its May Survey of Consumer Expectations (SCE) on Monday, in which households expect inflation to edge down a tick, despite upward pressures from the Middle East conflict.

Respondents said that inflation over the next 12 months is expected to dip from 3.6% to 3.5%, while over the 3- and 5-year periods, prices are projected to remain at 3.1% and 3%, respectively.

The SCE showed that expectations for future credit availability deteriorated, with a minority speculating that it will be easier to get credit in the year ahead. The mean perceived probability of finding a job if getting laid off decreased to 43.7%, below its 12-month average of 46.8% and its lowest reading since December of last year.

• The Dow lagged the chip-driven rebound that lifted the S&P 500 and Nasdaq off Friday's rout.
• A weekend round of Iran-Israel strikes left the ceasefire functional but visibly fraying.
• Wednesday's CPI consensus points to acceleration, the inflation passthrough the bid keeps ignoring.

The Dow Jones Industrial Average (DJIA) sat almost unchanged into the European afternoon, futures drifting around the 50,750 area after an overnight session that climbed off a low close to 50,500 up toward the 51,000 line before rolling straight over. The cash session took its cue from the same playbook: the S&P 500 rallied roughly 0.7% and the Nasdaq jumped about 1.3% as chip stocks ripped back from Friday's selloff, while the Dow scraped together a 0.1% gain, the laggard once again. The bid is real, the asymmetry is familiar, and the heavy lifting under the broad indices has nothing to do with the Dow's components.

The chip-led bounce the Dow can't catch

Friday's rout was a chip story, full stop. The Nasdaq dropped 4.2%, its worst session since April 2025, the major semiconductor exchange-traded fund (ETF) fell roughly 10%, and Micron alone gave back 13% as the market took profits on the names that have powered the last leg of the bull market. Monday's reversal is the same story in reverse. Micron is back up nearly 10%, the semi ETF up about 7%, and Nvidia and Broadcom are dragging the Nasdaq higher alongside it. Almost none of that lands in the Dow, which carries no Micron, no Broadcom, and only modest chip exposure overall. The asymmetry has been cutting both ways for the blue chips lately, lagging the upside when chips run and holding up when chips crack. Useful for diversification. Less useful when the tape demands you keep up.

A ceasefire still cracking at the edges

The Iran-Israel ceasefire is still nominally in place, but the weekend put fresh scratches on it. Iran's parliament speaker accused Washington of breaching the agreement, citing the residual naval posture and unresolved aspects of the Lebanon file, and Iranian missiles followed on Sunday. Israel responded Monday with what it described as a large-scale strike on Iranian defense systems, and President Donald Trump took to social media to demand both sides "immediately stop" while announcing that an "immediate" follow-on ceasefire was being negotiated. Iran's foreign ministry later said its operations against Israel had ended, with the caveat that further Israeli activity in Lebanon would restart hostilities. Crude Oil is pricing it about right: West Texas Intermediate (WTI) is higher by more than 1%, hovering near $91 a barrel, off its session highs but nowhere near pre-war levels. The ceasefire is functional. It is not peace.

The valuation question the SpaceX float is about to ask

There is a separate event risk no one is talking about loudly enough: SpaceX's market debut on Friday. The deal lands as one of the largest initial public offerings (IPOs) in market history and as a real-time referendum on the AI-adjacent valuation complex underpinning the same chip names that just snapped back. Blockbuster IPOs have a long history of marking the top of risk-on cycles, and pricing one this size into a fraying ceasefire and an accelerating Consumer Price Index (CPI) is the kind of setup that looks fine right up until it does not.

Data preview: Wednesday is where the assumption gets tested

Equities can absorb a flat Dow and a wobbly truce so long as the inflation picture cooperates, and Wednesday is where that assumption gets stress-tested. The May CPI prints at 12:30 GMT, and the consensus is hot. Headline is set at 0.5% MoM and 4.2% YoY against April's 3.8%, with core at 0.3% MoM and 2.9% YoY against 2.8%. The annual rate accelerating to a fresh cycle high is exactly the inflation passthrough hinted at by last month's core Personal Consumption Expenditures Price Index (PCE) print, the Iran war's energy shock finally landing in the consumer basket the way Federal Reserve (Fed) speakers have been quietly warning about. A print at or above consensus validates the "no longer transitory" framing and reinforces the rate futures tilt toward a hike rather than a cut. Thursday's Producer Price Index (PPI) is expected at 0.7% MoM headline with core year-on-year still running above 5%, and Friday's University of Michigan (UoM) consumer sentiment release will deliver its updated 1-year inflation expectations, which were near 4.8% last month. There is no obvious release on the docket built to rescue the bullish read.

Trading framework

The daily trend is still up, with the 50-period Exponential Moving Average (EMA) well below current price and the 200 EMA further below still. The 5-minute tape, though, is the warning. The Stochastic Relative Strength Index (Stoch RSI) is buried near 18, the kind of reading that either snaps back hard or confirms the session is done.

Resistance is the 51,000 zone, last week's ceiling and today's intraday high just under it. A clean break needs Wednesday's CPI to come in soft, and the consensus does not allow for that. First support is 50,500, today's defended low, with 50,000 the deeper psychological magnet underneath. A close below 50,500 paired with a hot CPI puts 50,000 in play quickly, and from there the trend itself comes into question.

Bias leans cautiously bearish into Wednesday. The risk-on tape is built on a chip rebound that needs a benign inflation print to extend, a ceasefire that just absorbed weekend strikes, and a SpaceX float likelier to define the top of the cycle than confirm its continuation. Fade rallies into the 51,000 zone with stops kept tight above, treat tactical longs near 50,500 as fades rather than adds, and assume CPI is the data point that decides the next 1,000 points in either direction.

Dow Jones 5-minute chart

• USD/CAD trades near two-month highs as the Canadian Dollar struggles to benefit from a softer US Dollar.
• Iran says military operations against Israel have ended, while US-Iran peace talks remain ongoing.
• Traders await BoC and Fed policy decisions amid rising inflation concerns.

USD/CAD trades in a narrow range on Monday, with the Canadian Dollar (CAD) struggling to capitalize on a softer US Dollar (USD) as a mild pullback in Crude Oil prices weighs on the commodity-linked Loonie. At the time of writing, the pair trades around 1.3950, holding near two-month highs.

The US Dollar and Oil prices both moved lower after Iran's Fars News Agency reported that Iran had ended its military operations against Israel. The development came after tensions escalated over the weekend, with Iran and Israel exchanging strikes for the first time since the ceasefire announced in April.

West Texas Intermediate (WTI) Crude Oil trades around $90 per barrel after touching an intraday high of $93.50 earlier in the day.

The headlines helped keep hopes alive that a broader peace agreement in the Gulf region can still be reached. US President Donald Trump also sought to reassure markets, saying that peace talks between the United States and Iran remain ongoing. However, Trump warned that the US naval blockade of Iranian ports would remain in place until a final agreement is reached.

Beyond geopolitics, traders are turning their attention to upcoming central bank meetings. The Bank of Canada (BoC) is set to announce its policy decision on Wednesday and is widely expected to leave interest rates unchanged at 2.25% for a fifth consecutive meeting.

While inflation accelerated in April, it came in below market expectations, suggesting price pressure remains broadly contained. Meanwhile, the labor market staged a sharp turnaround in May, with employment growth beating forecasts and the unemployment rate declining.

Together, the data support the case for the BoC to remain on hold as policymakers assess the impact of slowing economic growth after Canada entered a technical recession following two consecutive quarters of contraction.

In the United States, traders are awaiting inflation data due later this week ahead of next week's Federal Reserve (Fed) policy decision. Inflation has drifted further away from the Fed's 2% target since the US-Iran war triggered a sharp rise in Oil prices, while the labor market has shown signs of stabilization following last week's stronger-than-expected Nonfarm Payrolls report.

Markets are fully pricing in a pause at next week's meeting, but expectations for another rate hike later this year have increased as investors reassess the inflation outlook.

• Trump’s ceasefire push improves sentiment despite Iran-Israel attacks.
• Strong NFP keeps Fed-hike odds elevated ahead of CPI.
• BoE-tightening bets limit Sterling downside amid quiet UK docket.

The Pound Sterling (GBP) registers modest gains of 0.10% on Monday as risk appetite improves despite attacks exchanged between Iran and Israel, which agreed to halt fire as US President Donald Trump demanded the end of shooting to resume talks between Washington and Tehran.

Sterling steadies as softer Dollar offsets Fed hike repricing

The GBP/USD pair trades at 1.3349 after bouncing off daily lows of 1.3306, as the Greenback reversed some of its Friday’s gains, with the US Dollar Index (DXY) down 0.16% at 99.91.

Oil prices trimmed some of their earlier gains after Iran’s army announced that its attack on Israel was over, though it warned that further strikes on Lebanon would open the door for retaliation.

Last Friday, a strong Nonfarm Payrolls report in the US revealed that the labor market is solid. This justified hawkish remarks by some Federal Reserve (Fed) officials, such as Cleveland Fed President Beth Hammack—a voter in 2026—who favors tightening policy if inflation continues to edge higher.

On Wednesday, traders and Fed policymakers will get an update on inflation figures, as the May Consumer Price Index (CPI) is expected to breach the 4.2% threshold, up from April’s 3.8%. Investors increased the chances that the Federal Reserve will raise interest rates in 2026, with odds at 92% for a 25-basis-point rate hike towards the end of the year.

In the UK, the docket was absent, but speculation that the Bank of England (BoE) will tighten monetary policy by at least 50 bps in 2026 capped Sterling’s decline.

Ahead on Tuesday, the UK economic schedule is absent. In the US, traders will eye the ADP Employment Change 4-week average and housing data.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3340, keeping a bearish near-term bias as spot holds beneath the grouped simple moving averages around 1.3456, which now act as overhead resistance. The pair also remains positioned well below the broader downward resistance trend line drawn from 1.3869, reinforcing a capping structure, while the Relative Strength Index (14) at roughly 39 leans toward the weaker side of neutral, suggesting sellers still retain control despite the approach to mildly oversold territory.

On the topside, initial resistance aligns with the cluster of simple moving averages near 1.3456, and further upside would face a more distant barrier at the descending trend line traced from 1.3869. On the downside, the main technical floor emerges from the upward support trend line originating around 1.3159, where a sustained break would likely open a deeper corrective leg in the broader bearish sequence.

(The technical analysis of this story was written with the help of an AI tool.)

• Eurozone Sentix Investor Confidence improved modestly in June.
• Markets expect the ECB to hike interest rates on Thursday as inflation remains elevated.
• Investors will be on the lookout for clues in Lagarde's comments about the ECB's future policy path.

The EUR/USD pair trades near 1.1540 on Monday as investors assess mixed Eurozone sentiment data and position ahead of the European Central Bank's (ECB) highly anticipated interest rate decision later this week.

Eurozone investor confidence improved in June, with the latest Sentix Investor Confidence index rising to -13.4 from -16.4 previously. Although the indicator remains in negative territory, the improvement suggests investor sentiment is becoming less pessimistic, offering modest support to the Euro.

Attention now turns to Thursday's ECB policy announcement, where markets expect policymakers to deliver another interest-rate hike as inflation remains above the central bank's target. Investors will closely monitor comments from Christine Lagarde for guidance on whether additional tightening could be required in the coming months.

Short-term technical analysis:

On the 4-hour chart, EUR/USD trades at 1.1540, retaining a bearish near-term bias as it remains below both the 20-period Simple Moving Average (SMA) at 1.1587 and the 100-period SMA at 1.1621. The pair is attempting to stabilize just above short-term support, while the Relative Strength Index (RSI) near 38 hints at lingering downside pressure but shy of oversold conditions, suggesting scope for further weakness if nearby resistance levels cap the upside.

On the topside, initial resistance emerges at 1.1544, followed by 1.1555; a sustained break above these levels would be needed to ease immediate selling pressure and expose the 20-period SMA at 1.1587 and then the 100-period SMA at 1.1621. On the downside, first support is seen at 1.1533, ahead of the lower horizontal floor at 1.1516, where a clear violation would likely reinforce the broader bearish tone and open the door to a deeper decline.

(The technical analysis of this story was written with the help of an AI tool.)