Forex News

UOB’s Quek Ser Leang and Lee Sue Ann note that USD/SGD stayed firm on Monday, closing around 1.2788 after trading between 1.2759 and 1.2803, supported by a stronger US Dollar and a stable Singapore Dollar (SGD) Nominal Effective Exchange Rate (NEER). Their short-term view sees scope for a retest of 1.2800–1.2805, while the broader 1.2740–1.2810 range and strong support near 1.2750 remain intact.

Upside capped while range holds

"24-HOUR VIEW: USD popped to a high of 1.2803 during the early NY session yesterday before pulling back to close at 1.2787 (+0.16%). Upward momentum has eased somewhat with the pullback, but there is room for USD to retest the 1.2800 level before a more sustained pullback is likely. Based on the current momentum, a clear break above 1.2800 appears unlikely. Note that there is another resistance level at 1.2810. On the downside, a breach of 1.2765 (minor support is at 1.2775) would indicate that USD is more likely to trade in a range rather than retesting 1.2805."

"1-3 WEEKS VIEW: We indicated on 21 May, when spot was at 1.2780, that USD “has likely entered a range-trading phase between 1.2730 and 1.2820.” In our latest narrative from last Thursday (28 May, spot at 1.2775), we stated that “while we continue to expect range-trading, a narrower range of 1.2740/1.2810 is likely enough to contain the price movements.” We were not wrong, as even though USD fluctuated over the past couple of days, it has remained within our expected range. That said, there has been a slight increase in upward momentum, but for a continued rise, USD must first close above 1.2810. The likelihood of USD closing above 1.2810 will remain intact as long as 1.2750 (‘strong support’ level) is not breached."

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

Standard Chartered’s Shuang Ding and Hunter Chan note that the People’s Bank of China has shifted its operational focus from DR007 to DR001, aligning with the dominance of overnight repos in China’s interbank market. They expect short-term money market rates to remain mostly below the 7-day reverse repo policy rate, and see a gradual move toward an overnight policy rate framework.

PBoC seen gravitating to DR001 anchor

"The 7-day reverse repo rate was established as China’s sole policy rate in mid-2024."

"However, since May 2025, when the PBoC published the Q1 Monetary Policy Implementation Report, it has used the overnight rate (DR001) to monitor deviations of money market rates from the policy rate."

"In its Q1-2026 Report, the central bank pledged to keep the overnight money market rate close to the policy rate."

"This shift in focus to DR001 suggests the PBoC’s preference to use the overnight rate as the money-market rate anchor."

"We expect the PBoC to eventually move to adopting the overnight policy rate to resolve the tenor mismatch between the DR001 and the 7D policy rate."

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

• USD/CAD trades around 1.3830 on Tuesday, down 0.09% on the day at the time of writing.
• The Canadian Dollar gains some ground despite ongoing caution surrounding Middle East tensions.
• Investors assess the impact of a still-resilient US labor market following strong JOLTS data.

USD/CAD edges lower toward 1.3830 on Tuesday at the time of writing, as the US Dollar (USD) pauses after its recent advance. The pair gives back part of its latest gains despite a geopolitical backdrop that continues to favor safe-haven demand.

Market sentiment remains driven by developments in the Middle East. Concerns resurfaced after reports indicated that Iran had suspended indirect communications with the United States (US), raising fears of a renewed regional escalation. This environment continues to support demand for the US Dollar, although investors appear to be taking a more cautious stance following the Greenback’s recent rally.

At the same time, the Canadian Dollar (CAD) finds some support as markets reassess the impact of geopolitical tensions on energy prices. While Oil prices have recently retreated, risks to global supply flows remain elevated, particularly due to potential disruptions around the Strait of Hormuz.

Investors are also digesting the latest US economic data. The Job Openings and Labor Turnover Survey (JOLTS) showed that US job openings increased to 7.618M in April from a revised 6.887M in March, well above market expectations of 6.88M. The release reinforces the view that the US labor market remains resilient despite restrictive financing conditions.

These figures support Federal Reserve (Fed) officials in maintaining a cautious approach toward monetary easing. Cleveland Fed President Beth Hammack stated that labor market data continues to point to stability while emphasizing that inflation remains a significant concern.

On the Canadian side, investors are also monitoring the resumption of trade talks between Canada and the United States. Analysts at Scotiabank believe the Canadian Dollar is currently underperforming its G10 peers but note that stabilizing yield spreads between the two countries could provide modest support to the Canadian currency in the coming days.

Deutsche Bank analysts, including Mark Wall and team, argue Germany faces multifaceted headwinds from the Middle East conflict, with growth momentum weakening into mid‑2026. Expansionary fiscal policy is seen as the key stabilizer, keeping Gross Domestic Product (GDP) growth at 0.5% in 2026. As external conditions normalize, a fiscal-led domestic recovery is projected to lift German GDP growth to 1.3% in 2027.

Conflict headwinds and fiscal stabilisation

"The Middle East conflict has presented the German economy with multifaceted headwinds."

"Growth momentum is therefore likely to weaken towards the middle of the year."

"If our geopolitical baseline materializes, the economy should pick up again by Q4, even if inflationary pressures are likely to subside only slowly."

"Expansionary fiscal policy is the decisive stabilizer, so GDP is forecast to grow by 0.5% in 2026."

"By 2027, we expect a normalization of the external environment and a fiscal-led domestic recovery, lifting GDP growth to 1.3%."

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

• DJIA futures rebound from an early dip back above 51,000, just shy of Monday's record territory.
• Iran suspends mediator talks over Israel's offensive in Lebanon, while Trump and Rubio insist negotiations are still alive.
• Oil eases after Monday's spike even as Tehran threatens to fully close the Strait of Hormuz.
• JOLTS job openings blow past forecasts ahead of a data-heavy week capped by Friday's payrolls.

Dow Jones Industrial Average (DJIA) futures spent the overnight session doing their best impression of a market that has decided geopolitics no longer matter. After sliding toward 50,800 in early European trade, futures snapped higher and pushed back above 51,000, briefly tagging highs above 51,100 before easing into the US open. That kept the contract within touching distance of Monday's cash close, when the S&P 500 notched another record and the Nasdaq Composite led on a tech bid that simply ran over the Oil spike. The VIX sat near 16. For a tape staring down a fracturing ceasefire and a threatened closure of the world's most important Oil chokepoint, the complacency is hard to miss.

Tehran walks, Washington waves it off

The split screen is the story. On Monday, Iranian state media said Tehran had suspended talks and the exchange of texts through mediators in protest at Israel's expanding offensive in Lebanon, framing Lebanon as a precondition of the April ceasefire it now says has been violated on all fronts. By Tuesday, two semiofficial agencies reported that communication with mediators had stopped entirely after Israel threatened to bomb Beirut. Washington's version is unrecognizable. President Donald Trump posted that talks were back on at a rapid pace, said he had turned around a little glitch, and claimed Iran had not told the US it was walking. Then Benjamin Netanyahu said Israel would keep striking southern Lebanon as planned and his defense minister denied that any Lebanon ceasefire existed. Three governments, three narratives, and a market that has chosen the most convenient one.

Rubio sells diplomacy to a skeptical Hill

Into that gap stepped Secretary of State Marco Rubio, testifying before the Senate Foreign Relations Committee on Tuesday in his first public appearance since the war began. His message: talks are alive, and Tehran has agreed to negotiate parts of its nuclear program that it refused to touch a month ago. The framing was telling. Talks with Iran, he said, are not like talks with Switzerland and require the use of intermediators, a convenient way to explain how the US can insist negotiations continue even as Iran says it has stopped speaking to those very mediators. Rubio pointed to the Pakistan-brokered track in Islamabad, reopening the Strait of Hormuz, limited sanctions relief, and reviving nuclear talks under strict conditions. Lawmakers from both parties pressed him on the missing endgame. The optimism is doing a lot of work, and the tape is taking it at face value.

Oil blinks, equities yawn

The cleaner read on risk is in the Oil pit, and even there the fear is fading. Brent crude jumped more than 7% intraday on Monday on the Hormuz threat before paring to around 5%, then slipped back toward $94 on Tuesday, with West Texas Intermediate near $92. That is a market betting the closure threat is leverage rather than reality. Equities never even flinched, which is the part worth flagging. A record close on the day Iran suspends talks and warns of a full Hormuz shutdown is either supreme confidence in US diplomacy or a market that has stopped pricing tail risk.

JOLTS reheats the labor story

The macro calendar gives the bulls something firmer to lean on. The Job Openings and Labor Turnover Survey (JOLTS) for April landed at 7.618 million against a 6.88 million consensus, a hot print that says labor demand is not cracking. The week loads up from here: Wednesday brings the red-band Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI), ADP payrolls and the Fed's Beige Book, and Friday delivers Nonfarm Payrolls (NFP), with consensus at a soft 85K against 115K prior and unemployment holding at 4.3%. With Oil still elevated year-on-year and the labor market refusing to roll over, the data leaves the Fed little room to lean dovish, which equities continue to ignore.

Levels to watch

The 51,000 handle is the line in the sand. Holding above it keeps the bid intact and the record-chase alive, with 51,100 the upside trigger. Lose 51,000 and the early-session 50,800 zone comes back into play, with the real test being whether a genuine escalation, an actual Hormuz closure or a Lebanon flare-up, finally forces the complacency trade to unwind. Until then the lean stays with the bulls, but it is built on trust in a story Tehran is openly contradicting.

Dow Jones 5-minute chart

• The New Zealand Dollar trades without a clear direction near 0.5930 amid persistent geopolitical uncertainty.
• Middle East tensions support demand for the US Dollar and weigh on risk appetite.
• The Reserve Bank of New Zealand’s hawkish stance continues to help limit downside pressure on the currency.

NZD/USD trades around 0.5930 on Tuesday at the time of writing, virtually unchanged on the day, after giving back part of the gains recorded earlier this week. The pair is struggling to find a clear direction as investors remain cautious amid conflicting developments in the Middle East, which continues to influence market sentiment.

The New Zealand Dollar (NZD) remains sensitive to shifts in risk appetite. Hopes for diplomatic progress in the region are providing occasional support to risk-sensitive currencies, but the threat of a renewed deterioration in the situation is also sustaining defensive demand for the US Dollar (USD). This uncertainty is keeping traders on the sidelines ahead of several key US macroeconomic releases scheduled for this week.

The US Dollar is drawing support from its safe-haven status. Concerns surrounding negotiations between the United States (US) and Iran, as well as ongoing military operations in the Middle East, continue to maintain a geopolitical risk premium across financial markets. At the same time, expectations regarding the policy outlook of the Federal Reserve (Fed) remain a key driver for currency markets.

However, downside pressure on NZD/USD appears limited by New Zealand’s monetary policy outlook. The Reserve Bank of New Zealand (RBNZ) recently adopted a more hawkish tone, signaling that a 25-basis-point rate increase at its next meeting remains likely and indicating that the Official Cash Rate could rise further in the coming months. This stance continues to provide support for the New Zealand Dollar despite external headwinds.

Analysts at TD Securities believe, however, that the Kiwi’s upside potential may remain limited in the near term. The bank noted that most of the RBNZ’s tightening cycle now appears priced in by markets and that the lack of major New Zealand economic releases over the coming weeks could reduce bullish catalysts for the currency.

Against this backdrop, investors are likely to remain focused on global risk sentiment and upcoming US economic data.

• US JOLTS Job Openings rose to 7.618 million in April, but it wasn't enough to support the US Dollar.
• Markets continue to assess the Fed's interest rate outlook amid resilient labor market conditions.
• Australia's GDP and S&P PMI releases are next in line and could drive the next move in AUD/USD.

The AUD/USD pair elevated near the 0.7190 level on Tuesday as the US Dollar (USD) failed to find support following stronger-than-expected labor market data.

The latest Job Openings and Labor Turnover Survey (JOLTS) showed the number of United States (US) job openings rose to 7.618 million in April from a revised 6.887 million in March, significantly exceeding market expectations of 6.88 million. The reading marked the highest level since May 2024 and reinforced the view that the US labor market remains resilient despite elevated borrowing costs.

Looking ahead, traders will closely watch Australia's Q1 Gross Domestic Product (GDP) report and the upcoming S&P Global Purchasing Managers Index (PMI) releases.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.7186, maintaining a constructive bullish bias as it remains above both the 100-period Simple Moving Average (SMA) at 0.7171 and the 20-period SMA at 0.7168. The cluster of underlying floors around 0.7177 and 0.7170 reinforces this near-term positive tone, while the Relative Strength Index (RSI) around 59 suggests solid but not overextended upside momentum.

On the topside, initial resistance aligns with the recent horizontal cap at 0.7187, and a sustained break above this barrier would open the way for further gains. On the downside, immediate support is seen at 0.7177, followed by the 100-period SMA near 0.7171 and the nearby 0.7170 horizontal level, with deeper protection emerging at the 20-period SMA around 0.7168 and the prior base at 0.7160.

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

ABN AMRO economists Bill Diviney and Rose Heaulme note that Eurozone headline inflation rose to 3.2% in May, with core inflation surprising at 2.5%. Energy remains the main driver, while food inflation eased. A sharp jump in services inflation, likely linked to transportation and airfares, is seen as narrowly focused but warrants monitoring. They still expect two ECB rate hikes by July.

Services-led upside surprise in May inflation

"Eurozone inflation picked up in line with expectations to 3.2% in May, from 3% in April, while core inflation surprised to the upside, rising to 2.5% (ABN/consensus: 2.4%) from 2.2%."

"The big upward surprise this month came from services inflation, which jumped 0.5pp to 3.5% in May – we had expected a smaller rise to 3.3%."

"As usual with the flash estimate, we don’t have the full breakdown of services inflation at this point, but piecing together clues from the individual country press releases suggests that it was mostly driven by transportation services, and within that – we suspect – airfares, given the outsized rise in jet fuel since the Iran conflict broke out (which at its peak rose at double the magnitude of Brent crude)."

"In any case, if the rise in services inflation is as narrowly focused as we suspect, it is not necessarily a concern at this point, but it bears close watching."

"Looking ahead, we expect inflation to remain well above the ECB’s 2% target for the remainder of this year."

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

• EUR/USD holds firm as traders react to conflicting US-Iran headlines.
• Euro finds support from hotter Eurozone inflation data and ECB rate hike expectations.
• The US Dollar stays supported as key sticking points in US-Iran negotiations remain unresolved.

EUR/USD holds firm on Tuesday as traders react to conflicting headlines surrounding US-Iran negotiations. At the time of writing, the pair trades around 1.1639 after touching a daily high near 1.1655.

Iran's semi-official Fars News Agency, citing an informed source, reported that the exchange of messages between Iran and the United States has been suspended for at least a few days over the proposed memorandum of understanding (MoU).

The report contrasts with comments from US President Donald Trump, who said on Monday that negotiations with Iran are continuing “at a rapid pace.” Trump also told ABC News that he expects Washington and Tehran to reach an agreement within the next week to extend the ceasefire and reopen the Strait of Hormuz.

Meanwhile, US Secretary of State Marco Rubio said an Iran deal “could happen today, tomorrow or next week.” Rubio also said the first condition in negotiations is for Iran to reopen the Strait of Hormuz, while Tehran must also agree on the disposition of its highly enriched uranium.

The US Dollar (USD) remains supported as major sticking points in negotiations remain unresolved, reducing hopes for a near-term deal.

The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, is consolidating minor losses above the 99.00 mark.

The Euro (EUR) also finds support from the preliminary Eurozone inflation data. The Harmonized Index of Consumer Prices (HICP) rose 3.2% YoY in May from 3% in April, matching forecasts. The core HICP accelerated to 2.5% from 2.2%.

The latest inflation data increased the likelihood of a rate hike at the upcoming European Central Bank (ECB) monetary policy meeting later this month. ECB policymaker Olli Rehn said on Tuesday that the ECB is preparing an “insurance hike” in June.

Meanwhile, US JOLTS Job Openings rose to 7.618 million in April from 6.887 million in March, beating market expectations of 6.88 million. Traders now turn their attention to the ADP Employment Change due on Wednesday and the Nonfarm Payrolls (NFP) report on Friday.

Ongoing Oil-driven inflation risks have strengthened expectations that the Federal Reserve (Fed) may keep interest rates unchanged this year. The upcoming US labor market data could play a key role in shaping those expectations.

• Trump’s intervention cools Middle East fears, supporting equity risk appetite.
• JOLTS Job Openings jump reinforces US labor resilience before key services data.
• BoE hawks warn inflation battle may require faster action.

The Pound Sterling (GBP) rises by about 0.19% on Tuesday against the US Dollar (USD) as traders remain optimistic about a peace deal between the US and Iran despite ongoing geopolitical uncertainty. The GBP/USD pair trades at around 1.3470 after bouncing off daily lows of 1.3446.

GBP/USD gains as softer Oil offsets resilient US jobs data

The financial markets remain focused on geopolitics. The intervention by US President Donald Trump in the Israel-Hezbollah conflict tempered investors' fears, which are driving US equity markets to retest all-time highs. Therefore, Oil prices fell, as shown by the US crude Oil benchmark, the West Texas Intermediate (WTI), which was down 0.40% at $92.07.

Nevertheless, traders are still cautious due to the fragility of the ceasefire between the US and Iran.

Data from the US showed that the labor market remains resilient, as the Job Openings and Labor Turnover Survey (JOLTS) rose in April to its highest level in nearly two years. Vacancies rose to 7.618 million from 6.887 million in March, exceeding forecasts of 6.88 million. Worth noting that layoffs fell to 1.7 million, or 1.1%.

The data reassures Federal Reserve (Fed) policymakers of the solidity of the labor market. Cleveland Fed Beth Hammack said that “job data points to stability” and that the “unemployment rate is around full employment levels.” She remains highly concerned about inflation, saying that the Fed may need to act “soon” if inflation doesn’t abate.

Across the pond, Bank of England (BoE) policymakers crossed the wires. Megan Greene was hawkish, saying that she sees a growing case for rate hikes, saying that “the speed of the response is arguably just as important as its size.”

Earlier, Governor Andrew Bailey said the public must be confident that the central bank will drive inflation to its 2% target.

In the meantime, money markets had priced in a less hawkish BoE, with traders expecting the bank to hold borrowing costs steady at the June 18 meeting. However, towards the end of the year, investors had already priced in 40 basis points of easing, according to Prime Terminal data.

On Wednesday, the UK schedule will feature the BoE Monetary Policy Report Hearings. In the US, investors will eye Factory Orders, the ISM Services PMI, and the Fed’s Beige Book.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3475, holding a mildly bullish near-term bias as it remains above the latest triple simple moving average (SMA) proxy around 1.3449 and continues to respect the broader upward-support trend structure originating near 1.3159. The pair is still trading beneath the key downward resistance trend-line break area at 1.3600, suggesting upside is capped for now, while the 14-day Relative Strength Index, hovering just above 50 around 50.9, hints at modest but not overstretched bullish momentum.

On the downside, immediate support is seen around the 1.3475 area, with the clustered triple SMA support near 1.3449 reinforcing this nearby floor; a break below there would expose the upward trend-line break region at 1.3354, ahead of the more distant structural base drawn from the 1.3159 area. On the topside, initial resistance is defined by the downward resistance trend line around 1.3600, and a daily close above this barrier would be needed to reopen a more convincing advance in the broader uptrend.

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