Forex News
Any further rebound is likely part of a higher range of 143.30/144.30 instead of a sustained advance. In the longer run, price action suggests that USD is still trading in a range, most likely between 142.10 and 145.50, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Price action suggests that USD is still trading in a range
24-HOUR VIEW: "USD dropped sharply to 142.52 two days ago. Yesterday, when USD was at 142.75, we pointed out that 'the sharp and swift selloff appears to be overextended.' However, we indicated that USD 'could decline further, but given the deeply oversold momentum, a clear break below 142.10 appears unlikely.' Our view turned out to be incorrect, as after dropping to 142.36, USD rebounded strongly to close 0.92% higher at 144.00. This time around, the sharp rebound appears to be excessive, and any further rebound is likely part of a higher range of 143.30/144.30 instead of a sustained advance."
1-3 WEEKS VIEW: "Last Friday (30 May, spot at 143.95), we indicated that “the outlook for USD is unclear, and it could trade within last week’s wide range, between 142.10 and 146.30.” USD subsequently plummeted, and yesterday (03 Jun, spot at 142.75), we highlighted the following: 'The increase in downward momentum is not enough to indicate a sustained decline. USD must break and hold below 142.10 before further declines can be expected. The likelihood of USD breaking clearly below 142.10 will remain intact as long as 143.85 is not breached in the next few days.' USD then rebounded strongly, breaking above our ‘strong resistance’ level at 143.85 (high of 144.10). The price action suggests that USD is still trading in a range, most likely between 142.10 and 145.50."
The US Dollar (USD) caught a bid across G10 FX yesterday as safe-haven flows took a breather amid improved risk sentiment, with the JPY, CHF, and particularly gold weakening, Danske Bank's FX analysts report.
EUR/USD to retain a mild topside bias
"Softer May euro area inflation data had limited market impact, with around 57bp of ECB rate cuts still priced in for the full year and a 25bp cut effectively fully priced for tomorrow's meeting. In the US, the JOLTs report painted a mixed picture - job openings and hiring ticked higher against expectations, while involuntary layoffs also edged up modestly."
"Attention now turns to today's ADP employment report and ISM services data, ahead of Friday's May payrolls. Overall, we continue to see EUR/USD as a reflection of USD vulnerability rather than EUR strength."
"With policy risks elevated, economic momentum slowing, and investor confidence still fragile, the USD likely requires a clean, data-driven narrative shift to regain traction. Until then, we expect EUR/USD to retain a mild topside bias."
European Union (EU) Trade Commissioner Maros Sefcovic said on Wednesday that he “had constructive talks with US Trade Representative (USTR) Jamieson Greer.”
He further noted that “we are advancing in the right direction at pace on tariffs.”
Market reaction
EUR/USD is holding its renewed upside following these comments and was last seen adding 0.15% on the day at 1.1387.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
Silver prices (XAG/USD) broadly unchanged on Wednesday, according to FXStreet data. Silver trades at $34.49 per troy ounce, broadly unchanged 0.08% from the $34.52 it cost on Tuesday.
Silver prices have increased by 19.38% since the beginning of the year.
| Unit measure | Silver Price Today in USD |
|---|---|
| Troy Ounce | 34.49 |
| 1 Gram | 1.11 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 97.49 on Wednesday, up from 97.14 on Tuesday.
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.
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USD/CAD continues its descent after slipping below the 200-DMA, now hovering near a long-term trend line. While momentum indicators show some signs of stabilization, the technical outlook remains fragile without a clear bounce, Société Générale's FX analysts note.
MACD divergence suggests easing bearish momentum
"USD/CAD has extended the down move after giving up the 200-DMA (now at 1.4030). It is at an ascending trend line drawn since 2021. Daily MACD has started posting positive divergence highlighting receding downward momentum however signals of a meaningful bounce are not yet visible."
"The MA at 1.4030 is a short-term resistance. Inability to cross this hurdle can lead to persistence in decline towards next projections at 1.3610/1.3570 and last September low of 1.3420."
New Zealand Dollar (NZD) is likely to consolidate between 0.5985 and 0.6030. In the longer run, rapid buildup in upward momentum indicates further NZD strength; the level to monitor is 0.6095, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Rapid buildup in upward momentum indicates further NZD strength
24-HOUR VIEW: "Following the rally in NZD to 0.6043 two days ago, we stated yesterday that 'while deeply overbought, the rally in NZD could extend to 0.6070 before a pause can be expected.' However, after rising to 0.6054, NZD pulled back to 0.5988 before settling at 0.6000 (-0.65%). NZD appears to have entered a consolidation phase, and today, we expect it to trade between 0.5985 and 0.6030."
1-3 WEEKS VIEW: "We revised our NZD outlook to positive yesterday (03 Jun, spot at 0.6040). We indicated the following: 'The rapid buildup in momentum indicates further NZD strength. The level to monitor is 0.6095. We will maintain our view of a stronger NZD as long as 0.5970 is not breached.' While upward momentum has slowed somewhat with the subsequent pullback to 0.5988, only a breach of 0.5970 would indicate that our view was incorrect."
- USD/CAD may test primary support at the eight-week low at 1.3674.
- The 14-day RSI remains above 30, indicating continued bearish bias.
- The primary resistance appears at the nine-day EMA of 1.3764.
The USD/CAD pair is retracing its recent gains registered in the previous session, trading around 1.3710 during the European hours on Wednesday. The daily chart's technical analysis suggested a persistent bearish sentiment, as the pair consolidates within the descending channel pattern.
The 14-day Relative Strength Index (RSI) consolidates above 30, indicating continued bearish pressure. A break below the 30 mark would indicate an oversold situation and a potential upward correction soon. Additionally, the USD/CAD pair is also remaining below the nine-day Exponential Moving Average (EMA), pointing to weaker short-term momentum.
The USD/CAD pair may find initial support near the eight-week low at 1.3674, which was recorded on June 2, followed by the lower boundary of the descending channel around 1.3650. A break below the channel would reinforce the bearish bias and put downward pressure on the pair to navigate the region around 1.3419, the lowest since February 2024.
On the upside, the USD/CAD pair may encounter primary resistance at the nine-day EMA of 1.3764. A break above this level could improve the short-term price momentum and support the pair to explore the area around the 50-day EMA at 1.3933, followed by the descending channel’s upper boundary around 1.3960.
A surpassing of the above-mentioned crucial resistance zone could cause the emergence of the bullish bias, driven by the improved medium-term price momentum, and support the pair to approach the eight-week high of 1.4016, which was reached on May 13.
USD/CAD: Daily Chart
Canadian Dollar PRICE Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.23% | -0.17% | 0.01% | -0.08% | -0.18% | -0.24% | -0.17% | |
| EUR | 0.23% | 0.04% | 0.23% | 0.15% | 0.07% | -0.01% | 0.05% | |
| GBP | 0.17% | -0.04% | 0.14% | 0.10% | -0.00% | -0.05% | 0.00% | |
| JPY | -0.01% | -0.23% | -0.14% | -0.06% | -0.23% | -0.18% | -0.14% | |
| CAD | 0.08% | -0.15% | -0.10% | 0.06% | -0.10% | -0.16% | -0.10% | |
| AUD | 0.18% | -0.07% | 0.00% | 0.23% | 0.10% | -0.08% | -0.01% | |
| NZD | 0.24% | 0.01% | 0.05% | 0.18% | 0.16% | 0.08% | 0.06% | |
| CHF | 0.17% | -0.05% | -0.01% | 0.14% | 0.10% | 0.01% | -0.06% |
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 Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
The US Dollar (USD) showed resilience despite the late-session bounce in Treasury yields, supported by strong April JOLTS job openings. That said, the JOLTS data adds little to the overall jobs picture: the labour market remains tight, while declining quits suggest wage growth is easing. The dollar’s rebound appears more a reflection of markets struggling to justify an already elevated risk premium without fresh negative developments on trade or Treasury fronts, ING's FX analyst Francesco Pesole notes.
USD to come under renewed pressure
"Markets may also be adopting a slightly more optimistic stance on US-China trade tensions ahead of the scheduled Trump-Xi call this week. Recently, such direct talks have eased trade pressures, and in our view, there is potential for a temporary uptick in the dollar after the event. Still, this may not trigger a sustained rally."
"Trump’s 50% tariffs on steel and aluminium are now official, and a conciliatory tone between Trump and Xi Jinping may not result in any real breakthrough in negotiations. Trump said this morning in a social media post that he “likes” President Xi, but he is also “extremely hard to make a deal with”. At the time of writing, there are no indications that the call between the two leaders has already taken place."
"Attention today centres on the US ISM services index, with consensus expecting a modest rise to 52.0 from April’s 51.6, though recent weak manufacturing data may have tempered expectations. The ADP payrolls report is also in focus and is forecast to accelerate from 62k to 114k, signalling a solid jobs report on Friday. The Fed’s Beige Book release this evening may also influence sentiment. We would be cautious about jumping back into USD shorts before the Trump-Xi call has happened. After that, we expect the dollar to come under renewed pressure."
- An upward revision of Eurozone services' activity has given a fresh boost to the Euro
- The US Dollar had bounced up in previous sessions, following strong US jobs data.
- US Services PMI and ADP employment are in focus on Wednesday.
EUR/USD has trimmed previous losses and is moving at intra-day highs right above 1.1400 at the time of writing. The positive surprise in the Eurozone Services PMI, which has been upwardly revised to a 49.7 reading from the previous 48.9 estimation, has provided a fresh boost to the Euro.
The hair had retreated from six-week highs at the 1.1455 area on Tuesday, with the US dollar buoyed by an unexpected increase in US job openings while and softer-than-expected Eurozone Consumer Prices Index (CPI), which leaves the path clear for the ECB to keep easing monetary policy over the coming months.
The ECB is actually kicking off a two-day monetary policy meeting, which is highly likely to conclude with a 25 basis points (bps) interest rate cut to be announced on Thursday. The main interest of the event will be on the ECB President Christine Lagarde’s ensuing press release to assess the chances of a pause in July.
Later in the American session, the US ISM Services PMI and ADP Employment Change figures will provide some guidance for the US Dollar, on a day when US trading partners are expected to submit their “best offers” to reach trade deals that, so far, remain elusive.
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 | -0.20% | -0.16% | -0.04% | -0.04% | -0.13% | -0.20% | -0.13% | |
| EUR | 0.20% | 0.01% | 0.13% | 0.14% | 0.07% | -0.02% | 0.06% | |
| GBP | 0.16% | -0.01% | 0.08% | 0.12% | 0.06% | -0.03% | 0.04% | |
| JPY | 0.04% | -0.13% | -0.08% | 0.03% | -0.13% | -0.09% | -0.05% | |
| CAD | 0.04% | -0.14% | -0.12% | -0.03% | -0.09% | -0.16% | -0.09% | |
| AUD | 0.13% | -0.07% | -0.06% | 0.13% | 0.09% | -0.09% | -0.02% | |
| NZD | 0.20% | 0.02% | 0.03% | 0.09% | 0.16% | 0.09% | 0.07% | |
| CHF | 0.13% | -0.06% | -0.04% | 0.05% | 0.09% | 0.02% | -0.07% |
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: Euro changes direction with US data and the ECB on focus
- The Euro reversed course after an unexpected revision of the Eurozone Services PMI data revealed that the sector's activity contracted less than expected. Demand has remained weak, weighing on the overall reading. New business fell for the fourth consecutive month, but employment in the sector rose, and business confidence improved, according to the report.
- On Tuesday, the Eurozone CPI showed that inflation fell below the ECB’s 2% target, adding pressure on the Euro. Monthly inflation stalled in May, with the headline CPI rate down to a 1.9% year-over-year (YoY), against expectations of a 2% reading. Core inflation eased to 2.3% YoY, beyond the 2.5% expected.
- In the US, JOLTS Job Openings, a relevant employment gauge for the Federal Reserve (Fed), increased to 7.39 million in April, against expectations of a slight decline to 7.1 million and from March’s 7.2 million reading.
- April’s US Factory Orders resulted in a 3.7% contraction, which declined beyond the 3% expected, highlighting the negative impact of US President Trump’s trade policy on manufacturing activity.
- In the Eurozone economic calendar, the main focus is May’s final HCOB Services PMI reading, which is expected to confirm that the sector’s activity contracted to 48.9 in May, following five consecutive months of growth.
- During the US session, the focus will shift to the ADP Employment report, which will set the expectations for Friday’s all-important Nonfarm Payrolls release. The market anticipates an increase to 115,000 new payrolls in May, after April’s 62,000 reading.
- Beyond that, the US ISM Services PMI is likely to show some acceleration in business activity in May. These figures are expected to feed investors’ appetite for risk, which, over the recent weeks, has favoured the USD rather than the Euro.
Technical analysis: EUR/USD corrects lower after rejection at 1.1455
EUR/USD hit six-week highs at 1.1450 on Monday but failed to consolidate at those levels and has returned to the mid-range of the 1.1300s.
The immediate trend remains positive, but technical indicators in 4-hour charts are approaching bearish territory, and the US Dollar Index is gaining momentum. Correlation studies suggest that further correction is on the cards for the index on Wednesday.
The 1.1365 level is holding bears for now, with the next support areas at 1.1310 and the May 20 and 29 lows in the 1.1210 area. On the upside, immediate resistance is at 1.1410 and Tuesday’s high at 1.1455.
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
- GBP/JPY attracts buyers for the second straight day and touches a fresh weekly high.
- The overnight bounce from the 200-day SMA and subsequent move up favor bulls.
- Dips to the 194.35 area could be seen as a buying opportunity and remain limited.
The GBP/JPY cross builds on the previous day's goodish rebound from the 192.75-192.70 area, or over a one-week low, and gains positive traction for the second straight day on Wednesday. The momentum lifts spot prices to a fresh weekly low during the first half of the European session, with bulls now awaiting a sustained strength beyond the 195.00 psychological mark before placing fresh bets.
From a technical perspective, the GBP/JPY cross once again showed some resilience near the very important 200-day Simple Moving Average (SMA), and the subsequent move-up favors bullish traders. Moreover, positive oscillators on the daily chart suggest that the path of least resistance for spot prices remains to the upside. Hence, some follow-through move-up towards the next relevant hurdle, around the 195.70 area, looks like a distinct possibility.
The GBP/JPY cross might then aim to surpass the 196.00 round figure and retest the May monthly swing high, around the 196.25-196.30 region. A sustained strength beyond the latter could be seen as a fresh trigger for bulls and lift spot prices to the 197.00 round figure for the first time since January. The momentum could extend towards the 197.40-197.50 hurdle en route to the 198.00 mark and the 198.25 region, or the year-to-date peak touched in January.
On the flip side, any corrective pullback now seems to attract some dip-buyers near the 194.35 region, or the daily trough. This, in turn, should help limit the downside for the GBP/JPY cross near the 194.00 round figure. Failure to defend the said handle could make the currency pair vulnerable to accelerate the downward trajectory towards 193.45 intermediate support en route to the 193.00 mark and the 192.70 region, or the pivotal 200-day SMA.
GBP/JPY daily chart
Pound Sterling FAQs
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).
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.
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.
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.
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