Forex News
- AUD/USD weakens to around 0.7035 in Monday’s early Asian session.
- Iran fired missiles towards Israel for the first time since the April ceasefire, raising fears of a prolonged Middle East conflict.
- RBA’s hawkish tone might cap the downside for the Australian Dollar.
The AUD/USD pair remains under selling pressure near 0.7035 during the early Asian session on Monday. The Australian Dollar (AUD) extends the decline against the US Dollar (USD) amid escalating tensions in the Middle East and stronger-than-expected US economic data.
Iran has fired multiple waves of missiles at northern Israel over the weekend. Iranian officials said that any attack from Israel against Lebanon or Iran would be met with a "crushing and comprehensive response.”
Meanwhile, US President Donald Trump said that he would call Israeli Prime Minister Benjamin Netanyahu and ask him not to retaliate because he was worried the attacks would "blow up" a deal between the three sides. Rising tensions in the Middle East and a fragile peace deal between the US and Iran could boost a safe-haven currency such as the Greenback and act as a headwind for the pair.
Furthermore, the US economy posted a third straight month of strong job gains in May, the Bureau of Labor Statistics reported Friday. US Nonfarm Payrolls (NFP) increased by 172,000 jobs in May, compared to 179,000 (revised from 115,000) in the previous reading, and the Unemployment Rate held at 4.3% during the same period. The upbeat jobs report contributes to the USD’s upside.
On the other hand, a hawkish tone from the Reserve Bank of Australia (RBA) might help limit the Aussie’s losses. RBA Governor Michele Bullock emphasized that the central bank remains strictly focused on curbing inflation, following three interest rate hikes earlier this year that pushed the cash rate to 4.35%.
Bullock added that inflation is too high, and the board will do what it considers necessary to achieve our mandate to deliver price stability and full employment.
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.
US President Donald Trump said that he would tell Israeli Prime Minister Benjamin Netanyahu not to strike back after Iran fired a salvo of missiles at Israeli targets in retaliation for an attack on the outskirts of Beirut, Reuters reported on Sunday.
The reports of missile fire from Iran came after the Iranian Parliamentary Speaker, Mohammad Bagher Ghalibaf, said in a post to X that the US “naval blockade and violation of agreements regarding Lebanon” amount to violations of the ceasefire.
The Israeli military said that it intercepted waves of missiles fired from Iran for the first time since early April. Iranian officials stated it would launch further attacks if Israel continues its offensive in Lebanon, where a deadly Israeli strike hit Beirut on Sunday amid fighting with Iran-backed Hezbollah.
CNN also reported that Trump said Netanyahu will have 'no choice' but to accept a deal with Iran, adding that Iran's strikes have not changed his desire to conclude US-Iran negotiations.
Market reaction
Crude oil prices attract some buyers following this headline. At the time of writing, the West Texas Intermediate (WTI) is up 2.83% on the day at $90.85.
WTI Oil FAQs
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.
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.
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.
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.
UOB economists Julia Goh and Loke Siew Ting note that Philippine inflation unexpectedly eased in May but remains above the Bangko Sentral ng Pilipinas (BSP) target, keeping risks tilted to the upside. They expect the BSP to deliver a 25bps hike to 4.75% on 18 June and another 25bps to 5.00% in 3Q26, then hold rates to anchor expectations and support the Philippine Peso (PHP).
BSP seen hiking to 5.00 percent
"Notwithstanding the slower-than-expected headline inflation outturn, risks to the near-term inflation outlook remain skewed to the upside."
"Thus, we retain our full-year 2026 inflation forecast at 7.5% for now (BSP est: 6.3%; 2025: 1.7%)."
"That said, the softer headline print alongside subdued 1Q26 GDP growth is likely to temper the BSP’s policy response (of outsized rate hikes) at the 18 Jun Monetary Board meeting."
"We continue to expect a gradual 25bps increase in the reverse repurchase (RRP) rate to 4.75%, followed by a further 25bps hike to 5.00% in 3Q26, with rates held thereafter to strike a balance between anchoring inflation expectations toward target by early 2027 and preserving growth momentum amid prevailing global uncertainties."
"Monetary policy tightening will also be complemented by targeted fiscal measures, particularly to stabilize food prices when necessary."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- US Nonfarm Payrolls increased by 172K in May, beating expectations of 85K.
- The Unemployment Rate held at 4.3%, while wage growth eased to 3.4%.
- The New Zealand Dollar hit its lowest level since April 8.
NZD/USD falls sharply towards the 0.5790 region on Friday as the US Dollar (USD) strengthened following a stronger-than-expected Nonfarm Payrolls (NFP) report, while the New Zealand Dollar (NZD) struggled to attract buyers amid a cautious market mood. At the time of writing, the pair trades at 0.5791, its lowest level in the last two months.
The Bureau of Labor Statistics reported that the United States (US) economy added 172K jobs in May, significantly above market expectations of 85K and following an upwardly revised gain of 179K in April.
Meanwhile, the Unemployment Rate held steady at 4.3%, while annual wage growth eased to 3.4% from 3.6%. The data reinforced the view that the labor market remains resilient and puts pressure on the Federal Reserve (Fed) to keep interest rates higher-for-longer or even raise them, supporting the Greenback.
Next week, markets will closely watch the US Consumer Price Index (CPI) report and labor data, while New Zealand will release the Business NZ Performance of Manufacturing Index (PMI).
Short-term technical analysis:
On the 4-hour chart, NZD/USD trades at 0.5793, extending its downside bias as price remains below both the 20-period Simple Moving Average (SMA) at 0.5871 and the 100-period SMA at 0.5882. This configuration reinforces a bearish near-term tone, even as the Relative Strength Index (RSI) slips into oversold territory near 23, hinting that while sellers remain in control, the downside could become more vulnerable to corrective rebounds.
On the topside, initial resistance is located at 0.5802, followed by a tighter cap at 0.5813 and then 0.5843, where prior horizontal levels may attract renewed supply. Above these, the 20-period SMA at 0.5871 and the 100-period SMA at 0.5882 add to a broader resistance band that would need to be reclaimed to ease bearish pressure. On the downside, immediate support emerges at 0.5790; a decisive break lower would expose fresh lows and keep the bears firmly in charge.
(The technical analysis of this story was written with the help of an AI tool.)
DBS Group Research’s Chang Wei Liang highlights that USD/KRW has pushed above 1530 as weakness in semiconductor stocks adds pressure on the Korean Won. He links KRW softness to foreign investor profit-taking after a sharp KOSPI rally and warns that further outflows, limited exporter repatriation of overseas earnings, and persistently high Oil prices could destabilize the currency.
Won vulnerable on chips and flows
"USD/KRW have sallied above 1530, and wobbles in semiconductor stocks today could pose another risk."
"Following a retreat in US semiconductor stocks led by an industry bellwether on Thursday, Korean chipmakers have fallen 6% in early trading today."
"KRW weakness has been ascribed to outflows amid profit-taking by foreign investors after a scorching 93% rally in the KOSPI year-to-date."
"More investor profit-taking going forward could destabilize the KRW, especially with Korean exporters not fully repatriating overseas earnings while oil prices remain sticky near USD100."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Silver plunges toward the 200-day SMA after brutal weekly selloff.
- RSI nears oversold territory, confirming aggressive downside momentum.
- Break below $67.79 exposes $61.01 and $60.00 support levels.
Silver (XAG/USD) price tanks and challenges the 200-day Simple Moving Average (SMA) near $67.79 on Friday, as the white metal registers a daily loss of nearly 8% and is poised to end the week down by almost 10%, amid a stronger-than-expected US Nonfarm Payrolls report.
XAG/USD Price Forecast: Technical outlook
Silver has extended its losses this week, hitting a nine-week low of $68.03, as sellers target the 200-day SMA. Momentum, as measured by the Relative Strength Index (RSI), shows that sellers are in charge as the index approaches oversold territory.
If XAG/USD tumbles below the 200-day SMA, the next area of interest would be the March 23 swing low of $61.01, ahead of the psychological $60.00 mark. Below this area, the next support would be the November 13 low, which turned into support at $54.39.
For a bullish reversal, Silver’s first resistance is the $70.00 mark. Above this level, the next resistance is the May 28 low-turned-resistance at $71.79, followed by the psychological $75.00 level. A breach of the latter will expose the 50-day SMA at $76.17.
XAG/USD Price Chart – Daily
Silver FAQs
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.
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.
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.
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.
Standard Chartered economists Jonathan Koh and Edward Lee revise their Bangko Sentral ng Pilipinas (BSP) policy rate path, dropping expectations for a 50bps off-cycle hike before the 18 June meeting. They still project a 50bps increase in June and 25bps in August as inflation risks persist and PHP weakness raises imported inflation concerns. Policy easing is only expected from Q2-2027.
BSP path revised but still hawkish
"We no longer expect Bangko Sentral ng Pilipinas (BSP) to deliver a 50bps off-cycle rate hike ahead of its scheduled 18 June monetary policy meeting."
"That said, we maintain our call for a 50bps hike at the June meeting, followed by a further 25bps increase in August, as inflation risks have moderated but not disappeared."
"Continued PHP depreciation also reinforces concerns on imported inflation and supports BSP’s hawkish rhetoric."
"With the off-cycle hike no longer in our baseline, we lower our end-2026 policy rate forecast to 5.25% (from 5.75% previously)."
"We continue to expect these hikes to be reversed from Q2-2027, once inflation eases more convincingly, bringing the policy rate back to 4.50% by end-2027."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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