Forex News
- USD/JPY rises as the Japanese Yen falls amid high import costs.
- 10-year JGB yield reaches a fresh 30-year high of 2.79%.
- The US Dollar remains strong as markets price in multiple Fed rate hikes this year.
USD/JPY extends its gains for the second successive day, trading around 161.70 during the Asian hours on Monday. The Japanese Yen (JPY) is caught in a high-stakes tug-of-war, buckling under surging import costs even as 10-year JGB yields hit a fresh 30-year high of 2.79%. This deep market divide has traders on high alert for immediate verbal intervention from Tokyo.
The USD/JPY pair appreciates as the US Dollar (USD) holds its ground, buoyed by market expectations of multiple Federal Reserve (Fed) rate hikes later this year. This comes despite easing global inflation concerns, which have been helped by oil flows normalizing through the critical Strait of Hormuz.
The CME FedWatch tool shows financial markets are pricing in a 77.3% chance of interest rate hikes by year-end. Investors are now looking ahead to Wednesday's release of the Fed’s June policy Meeting Minutes to gain clearer insights into the future path of interest rates.
Recent US labor data have forced Wall Street to aggressively rethink this hawkish outlook. The latest Nonfarm Payrolls (NFP) report revealed the US economy added a mere 57,000 jobs last month, severely missing the market's forecast of 110,000. While the headline unemployment rate did manage an unexpected drop to 4.2% from May's 4.3%, the dramatic hiring slowdown strongly signals that the broader economy is cooling down.
Fed Chair Kevin Warsh firmly reaffirmed the central bank’s independent commitment to its 2% price stability target. Notably, he also acknowledged that inflation risks and expectations have finally begun to moderate over the past month.
Japanese Yen FAQs
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.
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.
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.
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.
On Monday, the People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead at 6.8066 compared to Friday's fix of 6.8047 and 6.7850 Reuters estimate.
PBOC FAQs
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.
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.
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.
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.
- EUR/USD consolidates during the Asian session as traders reassess Fed and ECB outlook.
- Hormuz risks offer some support to the safe-haven USD and cap the upside for spot prices.
- Traders look to second-tier Eurozone data and the US ISM Services PMI for some impetus.
The EUR/USD pair kicks off the new week on a subdued note and oscillates in a narrow band below mid-1.1400s during the Asian session. Spot prices, however, remain within striking distance of a nearly two-week high, touched last Thursday, amid mixed fundamental cues.
Despite a fragile US-Iran interim agreement, tensions surrounding the Strait of Hormuz remain elevated as Iran seeks to tighten control over the strategic waterway. This keeps the geopolitical risk premium in play and offers some support to the safe-haven US Dollar (USD), which, in turn, is seen acting as a headwind for the EUR/USD pair.
The USD bulls, however, seem hesitant amid reduced bets for interest rate hikes by the US Federal Reserve (Fed) following the release of rather unimpressive US jobs data last week. In fact, the closely-watched US Nonfarm Payrolls (NFP) report showed that the economy added only 57K new jobs in June, compared to the 110K expected.
Adding to this, the previous month's reading was revised down from 172K to 129K, while the Unemployment Rate edged lower to 4.2% in June. This comes on top of easing inflation fears in the face of the recent slump in Crude Oil prices and shifted market expectations from one to two Fed rate increases in 2026 to between zero and one hike.
This, along with a generally positive tone around the equity markets, keeps a lid on any meaningful appreciation for the USD and should limit the downside for the EUR/USD pair. Meanwhile, softer Eurozone inflation data forced investors to reduce bets on further European Central Bank (ECB) rate hikes, warranting caution for aggressive bulls.
Monday's economic docket features German Factory Orders, Eurozone Sentix Investor Confidence, the monthly Producer Price Index (PPI), and Retail Sales. Later during the early North American session, the release of the US ISM Services PMI, along with speeches from influential FOMC members, could provide some impetus to the EUR/USD pair.
Euro FAQs
The Euro is the currency for the 20 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%).
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.
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.
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.
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.
- AUD/USD remains subdued as the Australian Dollar weakens following TD-MI Inflation Gauge data.
- Major Australian banks expect further RBA rate hikes, noting June minutes showed intense concern over persistent inflation.
- The US Dollar remains strong as financial markets continue to price in multiple Federal Reserve interest rate hikes this year.
AUD/USD declines after two days of gains, trading around 0.6930 during the Asian hours on Monday. The currency pair loses ground following the release of TD-MI Inflation Gauge data, which came in at -0.4% month-over-month, against the -0.3% prior.
Traders are weighing hawkish interpretations of the Reserve Bank of Australia’s (RBA) June Meeting Minutes released last week. Major Australian banks noted that the RBA remains highly concerned about sticky inflation. The Commonwealth Bank of Australia pointed out that the minutes highlighted persistent excess demand and capacity constraints, while ANZ echoed this view, warning that the minutes reinforce the distinct risk of another RBA rate hike ahead.
The US Dollar (USD) holds its ground, buoyed by market expectations of multiple Federal Reserve (Fed) rate hikes later this year. This comes despite easing global inflation concerns, which have been helped by oil flows normalizing through the critical Strait of Hormuz.
The CME FedWatch tool shows financial markets are pricing in a 77.3% chance of interest rate hikes by year-end. Investors are now looking ahead to Wednesday's release of the Fed’s June policy Meeting Minutes to gain clearer insights into the future path of interest rates.
However, recent US labor data have forced Wall Street to aggressively rethink this hawkish outlook. The latest Nonfarm Payrolls (NFP) report revealed the US economy added a mere 57,000 jobs last month, severely missing the market's forecast of 110,000. While the headline unemployment rate did manage an unexpected drop to 4.2% from May's 4.3%, the dramatic hiring slowdown strongly signals that the broader economy is cooling down.
Amid this shifting backdrop, Fed Chair Kevin Warsh firmly reaffirmed the central bank’s independent commitment to its 2% price stability target. Notably, he also acknowledged that inflation risks and expectations have finally begun to moderate over the past month.
Australian Dollar FAQs
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.
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.
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.
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.
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.
The upcoming week will bring a fresh test for major currency pairs as investors return from the US Independence Day holiday and continue to digest weaker US labor market data. The release of the last Federal Open Market Committee (FOMC) minutes and Initial Jobless Claims will test the US Dollar's (USD) resilience.
The US Dollar Index (DXY) trades lower near the 100.90 price zone and is set to finish the week with a 0.50% loss. The Greenback will now focus on a relatively light but important United States (US) calendar. Monday will bring the final S&P Global Services PMI and ISM Services PMI, while Tuesday’s trade balance and Wednesday’s FOMC Minutes will be key. The minutes from the Fed’s June meeting, the first under Chair Kevin Warsh, may offer clues on whether policymakers remain committed to a restrictive stance.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.04% | -0.06% | 0.16% | 0.15% | -0.17% | -0.14% | 0.04% | |
| EUR | 0.04% | -0.03% | 0.20% | 0.18% | -0.16% | -0.13% | 0.07% | |
| GBP | 0.06% | 0.03% | 0.22% | 0.20% | -0.16% | -0.09% | 0.10% | |
| JPY | -0.16% | -0.20% | -0.22% | -0.01% | -0.37% | -0.33% | -0.12% | |
| CAD | -0.15% | -0.18% | -0.20% | 0.00% | -0.37% | -0.30% | -0.10% | |
| AUD | 0.17% | 0.16% | 0.16% | 0.37% | 0.37% | 0.07% | 0.25% | |
| NZD | 0.14% | 0.13% | 0.09% | 0.33% | 0.30% | -0.07% | 0.19% | |
| CHF | -0.04% | -0.07% | -0.10% | 0.12% | 0.10% | -0.25% | -0.19% |
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).
EUR/USD trades on a higher note near the 1.1440 level and will likely remain driven by the contrast between softer US labor data and the European Central Bank’s (ECB) cautious stance. Germany and France's trade and industrial data will also be watched for signs of whether the recovery in activity can continue.
GBP/USD rose sharply by more than 1% this week, trading near 1.3350 and is poised to remain sensitive to broader USD direction. If the FOMC Minutes show concern over the labor market, the pair may find support.
USD/JPY trades near the 161.40 level after hitting a 40-year high of 162.84 earlier this week. The Japanese Yen may struggle if the US Dollar keeps rising, but softer US data could limit the pair’s upside if markets price in a less restrictive path for the Fed. Intervention risks may also stay in focus if USD/JPY remains near multi-decade highs.
AUD/USD trades near the 0.6940 price zone and will watch China-related sentiment and the broader USD trend. The Aussie recently found support from stronger Australian PMIs and resilient Chinese services activity.
West Texas Intermediate (WTI) Oil trades near $68.80 per barrel. The black gold will remain sensitive to supply expectations, geopolitical risks, and the upcoming OPEC+ meeting. Recent declines in Oil prices back toward pre-war levels have reduced some inflation fears, but any change in supply guidance could quickly revive volatility across energy markets.
Gold (XAU/USD) trades higher near the $4,175 level and may continue to benefit if US yields fall and the Fed minutes strengthen expectations that the central bank may not keep policy restrictive for much longer. However, a stronger US Dollar rebound could limit upside momentum for the precious metal.
Anticipating economic perspectives: Voices on the horizon
Monday, July 6
- Fed Governor Waller
- BoE’s Mann
- ECB’s Schnabel
- ECB President Lagarde
- ECB’s Lane
Tuesday, July 7
- BoE’s Mann
Wednesday, July 8
- RBA’s Hunter
Thursday, July 9
- BoE’s Breeden
- ECB President Lagarde
- ECB’s Cipollone
Friday, July 10
- ECB President Lagarde
- ECB’s Vujčić
Central bank meetings and policy decisions
The main policy decision next week will be the RBNZ Monetary Policy Review and OCR announcement on Wednesday, July 8, with the online media conference also scheduled later that day. The FOMC Minutes from the June 17 meeting will also be released on Wednesday, while the ECB account of its June policy meeting is due on Thursday. The BoE Financial Stability Report and FPC Record will be published on Tuesday. No major interest rate decisions are scheduled from the Fed, ECB, BoE, BoJ, RBA, or BoC during the week.
UOB’s Quek Ser Leang notes that USD/CNH has seen a slight pickup in downward momentum, but still expects the pair to remain range-bound. The bank now looks for a lower intraday band around 6.7820–6.7940, while its 1–3 week view stays neutral, with USD/CNH likely to trade between 6.7750 and 6.8080.
USD/CNH seen holding defined ranges
"24-HOUR VIEW: Two days ago, USD traded within a range of 6.7911/6.8025 and closed little changed at 6.7948 (+0.05%). Yesterday, we indicated that “the price action provides no fresh clues, and we continue to expect USD to trade between 6.7860 and 6.7990.” USD then traded within a range of 6.7840/6.7963 before settling at 6.7884 (-0.09%). There has been a slight increase in downward momentum, but this is likely to lead to USD trading in a lower range of 6.7820/6.7940 rather than a sustained decline."
"1-3 WEEKS VIEW: We revised our view from positive to neutral two days ago (01 Jul, spot at 6.7920). We highlighted that the recent USD “strength has come to an end.” We also highlighted that USD “is likely to trade in a range between 6.7750 and 6.8080.” We continue to hold the same view"
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- NZD/USD remains bearish despite rebound above 0.5700 figure.
- RSI rises below 50, signaling buyers lack full control.
- Break above 0.5750 exposes 0.5800 and key SMA cluster.
The Kiwi Dollar clears the 0.5700 figure on Friday, clings to gains of over 0.22% against the Greenback after hitting a daily low of 0.5689. At the time of writing, the NZD/USD trades at 0.5709.
NZD/USD Price Forecast: Technical outlook
The NZD/USD remains technically bearish, even though interest rate probabilities suggest the Reserve Bank of New Zealand could raise rates at least twice. However, in the short term, the leg-up would test an support-trendline-turned resistance at around 0.5750.
The Relative Strength Index (RSI) is rising, suggesting buyers are gaining traction, but it remains below the 50-neutral level. Hence, the overall trend is downwards.
For a bullish reversal, the NZD/USD must clear 0.5750, followed by the 0.5800 mark. Above this level, the next resistance is the 200-day Simple Moving Average (SMA) at 0.5821, followed by the 50-day SMA at 0.5831, and then the 100-day SMA at 0.5851. Once those levels are cleared, the next resistance is the 0.5900 milestone.
On the flipside, if NZD/USD tumbles below the current low of the day (LOD) at 0.5689, the next support is at 0.5650, followed by 0.5600.
NZD/USD Price Chart – Technical outlook
New Zealand Dollar FAQs
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.
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.
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.
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.
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