Forex News
Brown Brothers Harriman’s (BBH) Elias Haddad notes markets are steady ahead of the United States (US) July Consumer Price Index (CPI) release, which is seen as pivotal for Fed funds expectations and the Dollar. Haddad expects CPI to firm modestly, with downside risks for USD if the data are soft and only limited scope for a hawkish repricing even on a hot print.
USD downside skew around CPI
"Markets are in a holding pattern ahead of today’s critical US July CPI report (1:30pm London, 8:30am New York). The print will be a key swing factor for Fed funds rate expectations and set the tone across rates, currencies, and broader risk sentiment. Fed funds futures currently price in 50% odds of a 25bps hike in September to a target range of 3.75-4.00%, down from a high of 75% end-July, and just over 40bps of cumulative tightening in the next twelve months."
"A soft US CPI would strengthen the case for a dovish repricing in Fed hike expectations and further undermine USD while lifting risk assets. A hot US CPI will likely deliver a kneejerk USD bounce via higher front-end yields. However, with Fed policy already restrictive (assuming a neutral rate of 3.00%), the scope for a material hawkish repricing looks limited which is a USD headwind."
"US July CPI to firm modestly but stop short of signaling a renewed acceleration in inflation. Headline CPI is expected to rise +0.1% m/m vs. -0.4% in June and ease to 3.4% y/y vs. 3.5% in June. Core CPI is expected to rise +0.2% m/m vs. 0.0% in June and ease to 2.5% y/y vs. 2.6% in June."
"The three-month change in core and headline CPI will offer a cleaner read on whether inflation momentum is decelerating or reaccelerating. In parallel, CPI measures which filter out extreme price swings, like trimmed mean, median, sticky, and super core will be key to judging the underlying inflation trend. Both the Atlanta and Cleveland Fed CPI prints will be published at 11:00am New York (4:00pm London)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- EUR/JPY pulls back to 183.50 after failure to find follow-through above 184.00.
- Hot German inflation data adds to the case for an ECB rate hike in September.
- A hawkish tone of the BoJ's summary of opinions has provided some support to the Yen this week.
The Euro (EUR) is paring previous gains against the Japanese Yen (JPY) on Wednesday, weighed by a mild risk-off market mood as tensions in the Middle East grow. EUR/JPY bulls have failed to find acceptance above 184.00, despite the hot German consumer inflation data seen earlier on the day, and the pair retreated to 1.8315 lows before returning to the 183.50 area at the time of writing.
Data from Germany released earlier on the day confirmed that July’s Harmonised Index of Consumer Prices (HICP) accelerated to a 2.8% year-over-year (Y-o-Y) rate, from 2.4% in June, as energy inflation jumped to 7.3% in the 12 months to July, from 2.7% in June. Excluding food and energy, inflation also accelerated, albeit at a more moderate 2.6% Y-o-Y rate, from June’s 2.5% reading.
These figures cement hopes for a European Central Bank (ECB) interest rate hike in September, although the impact on the Euro has been marginal.
The common currency is struggling against its main peers on Wednesday as reports of attacks on vessels attempting to cross the Straits of Hormuz and Bab el-Mandeb have cast further doubt about the fate of the US-Iran peace process, pushing back hopes of a swift reopening of the Strait of Hormuz.
The Yen, on the other hand, is trimming losses across the board on Wednesday, following the release of a hawkishly leaning Summary of Opinions by the Bank of Japan (BoJ) earlier in the week. Analysts at DBS Group Research note that there are “growing reasons for the BoJ to bring forward its tightening cycle,” pointing to firm wage-driven reflation and strengthening CPI as key supports for earlier action. DBS experts add that “faster policy normalization may also be needed to address persistent JPY weakness,” underscoring how currency dynamics are increasingly feeding into the policy debate.
Central banks FAQs
Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%.
A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing.
A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%.
Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.
UOB’s Quek Ser Leang and Lee Sue Ann note AUD/USD rebounded to close around 0.7062 after the RBA left its cash rate at 4.35%. Intraday, they see scope for the Australian Dollar to edge higher, though a sustained break above 0.7075 is unlikely. Over 1–3 weeks, upside risk persists as long as AUD holds above 0.7025, with potential toward 0.7100 on a close above 0.7075.
Australian Dollar holds constructive tone
"24-HOUR VIEW: We expected AUD to “trade sideways between 0.7040 and 0.7070” yesterday. AUD subsequently fell briefly to 0.7038, rebounded to 0.7070 before closing at 0.7062 (+0.11%). The slight increase in upward momentum suggests AUD could edge higher, but based on the current momentum, a sustained break above 0.7075 appears unlikely. On the downside, support is at 0.7050, followed by 0.7040."
"1-3 WEEKS VIEW: Since early last week, we have been of the view that the risk for AUD is on the upside. Yesterday (11 Aug, spot at 0.7055), we highlighted that “the upside risk will remain intact as long as AUD holds above 0.7025 (‘strong support’ level).” There is no change in our view. Looking ahead, should AUD close above 0.7075, it could continue to rise toward 0.7100."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Societe Generale’s Kenneth Broux highlights that the Canadian Dollar has recovered to its strongest level in two months, with USD/CAD mean‑reverting to 1.3933 from 1.4248. The pair now trades close to fair value on 2‑year spread models, and a test of 1.3900 would mark a 50% retracement of the May–June rally, helped by stronger WTI and reduced speculative shorts.
Fair value nears as rally retraces
"In Canada, building permits will play second fiddle to US CPI as the loonie recovers to the strongest level in two months."
"USD/CAD has mean reverted to 1.3933 from 1.4248 in late June and trades close to fair value based on 2y bond spreads (Rsq 0.8)."
"A test of 1.3900 would mark a 50% retracement of the May-June rally."
"The loonie has been supported by the rebound in WTI above $82/b, the elimination of speculative short positions and the dovish repricing of the Fed post NFP."
"Long CAD/short JPY (+0.63%) is the best carry performer in G10 so far in August."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Silver prices (XAG/USD) rose on Wednesday, according to FXStreet data. Silver trades at $66.56 per troy ounce, up 3.06% from the $64.58 it cost on Tuesday.
Silver prices have decreased by 6.36% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 66.56 |
1 Gram | 2.14 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 66.32 on Wednesday, down from 67.64 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.
(An automation tool was used in creating this post.)
OCBC’s Sim Moh Siong and Christopher Wong highlight that the US Dollar (USD) stayed mixed as markets waited for the key United States (US) Consumer Price Index (CPI) release, with Middle East tensions and hawkish Federal Reserve (Fed) rhetoric offsetting each other. They expect CPI to be pivotal for September FOMC pricing, while a rangebound Dollar and supportive risk backdrop continue to favour carry trades in the near term.
CPI to steer FOMC expectations
"Markets stayed sidelined ahead of US CPI, with mixed USD performance reflecting conflicting Middle East headlines and hawkish Fed rhetoric. Today’s inflation print is likely to be pivotal for September FOMC pricing, while a rangebound USD continues to favour carry trades."
"US data offered a more constructive signal. The NFIB Small Business Optimism Index rose to 99.8 in July from 97.4 in June, beating consensus expectations of 97.5 and reaching its highest level since August 2025. Much of the improvement was driven by a sharp rebound in hiring intentions, contrasting with last week’s softer payrolls report."
"We expect the CPI release to be a key catalyst for market pricing ahead of the September FOMC meeting, which is currently viewed as a near-even split between a rate hike and a hold. A July core CPI reading of 0.3% MoM or higher, above the 0.2% consensus forecast, would likely strengthen expectations of a September hike."
"In the meantime, a range-bound USD and a generally supportive risk environment should continue to underpin carry trades, despite persistent volatility in oil markets and ongoing FX intervention risks surrounding the JPY."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Commerzbank’s Charlie Lay and Dr. Henry Hao note that Brent and WTI firmed as markets reassessed prospects for a Hormuz deal, with the previous close at USD88.91 for Brent and USD83.20 for WTI. Iran insists the Strait of Hormuz will stay closed until its conditions are met, while elevated geopolitical risks could keep energy markets tight and renew upward pressure on US inflation.
Oil buoyed by Hormuz uncertainty
"The conflicting signals suggest negotiations are progressing, but a deal capable of restoring normal shipping through the Strait of Hormuz does not yet appear imminent."
"Geopolitical risks remain elevated elsewhere in the region. A US Navy helicopter fired on a cargo vessel that attempted to breach the US blockade of Iranian ports, while separate incidents involving commercial vessels were reported in the Gulf of Oman and off Yemen's Red Sea coast. European diesel prices also surged amid disruptions to refining capacity elsewhere, reinforcing concerns over already-tight energy markets."
"Lower energy prices in July should help ease headline inflation, although the subsequent rebound in oil prices means energy could again place upward pressure on inflation in the coming months."
"Brent oil prices rose as Iran reiterated that the Strait would remain closed until its conditions are met, despite Pakistan suggesting that Washington and Tehran were “close to some sort of arrangement”. The USD was little changed."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- German inflation rebounded to 2.8% in July after dropping to 2.3% in June.
- Destatis President Ruth Brand cited climbing energy prices as the primary driver behind July's rising inflation rate.
- Lower crude oil prices weaken Canada's export revenue, depressing the Canadian Dollar despite ongoing Middle East geopolitical risk supply concerns.
EUR/CAD remains steady after five days of losses, trading around 1.6070 during the European hours on Wednesday. The currency cross moves little as the Euro (EUR) holds ground following the release of Germany’s Harmonized Index of Consumer Prices (HICP) data.
German inflation surged back to 2.8% in July, reversing a recent downward trend fueled by a sharp acceleration in energy costs. After slowing to 2.3% in June from 2.6% in May and 2.9% in April, consumer prices gathered fresh momentum. Ruth Brand, President of the Federal Statistical Office (Destatis), noted that energy prices continued to climb at an above-average pace, acting as the primary catalyst behind the month's rising inflation rate.
Europe eyes China trade risks but underestimates global economic shifts
Analysts at Rabobank caution that the Eurozone’s evolving stance toward China may be missing a deeper structural story. They note that “even as Europe warms up for a potential trade war with China, it does not grasp the scale of the change in the world economy it lives in,” suggesting policymakers risk focusing on near-term trade tensions while underestimating the broader transformation of the global economic landscape.
The EUR/CAD cross could find some gains as the commodity-linked Canadian Dollar (CAD) struggles on lower oil prices. West Texas Intermediate (WTI) oil price depreciates after two days of gains, trading around $82.20 per barrel at the time of writing. However, Crude oil prices may regain on persistent geopolitical uncertainties in the Middle East.
Although Pakistan’s defence minister indicated that Washington and Tehran were nearing an agreement regarding the Strait of Hormuz, a sentiment backed by reports of advanced negotiations between Iran and Oman, tensions quickly reignited. Fresh caution swept through global markets after US President Donald Trump insisted that Tehran pay reparations to victims of attacks linked to the Islamic Republic.
Loonie strength leaves Canada data in the shadow of US inflation
Societe Generale notes that, in the near term, domestic data will be overshadowed by developments south of the border, with “building permits [set to] play second fiddle to US CPI as the Loonie recovers to the strongest level in two months.” The bank points out that the Canadian Dollar’s rebound has shifted market focus toward US inflation as the key driver of USD/CAD, relegating local indicators to a supporting role in the currency’s latest recovery phase.
- GBP/USD struggles to gain any meaningful traction ahead of the key US-UK macro releases.
- The US CPI is due later this Wednesday, followed by the UK GDP and US PPI on Thursday.
- Geopolitical risks and Fed-hike bets underpin the USD, capping the upside for spot prices.
The GBP/USD pair extends its sideways consolidation around the 1.3500 psychological mark through the first half of the European session on Wednesday. Traders opt to wait on the sidelines ahead of important macro data from the US and the UK.
The crucial US Consumer Price Index (CPI) report is due later today, followed by the preliminary Q2 GDP figures from the UK and the US Producer Price Index (PPI) on Thursday. In the meantime, hawkish US Federal Reserve (Fed) expectations might continue to underpin the US Dollar (USD) and cap GBP/USD.
Strategists at Deutsche Bank highlight how finely poised Fed expectations remain ahead of the latest US inflation releases, noting that “futures this morning are pointing to a 51% chance of a September hike.” They add that the current balance of risks could shift quickly, as “if we do get an upside or downside surprise today, that could help shift the balance one way or the other,” underscoring how sensitive Dollar pricing is to incoming data at this stage of the policy cycle.
According to the CME Group's FedWatch Tool, traders are currently pricing in over a 75% chance that the US central bank will raise borrowing costs by the year-end amid inflation risks stemming from volatile oil prices. Furthermore, the US-Iran standoff over the Strait of Hormuz lends additional support to the safe-haven buck.
An advisor to Iran’s Supreme Leader Mojtaba Khamenei said on Tuesday that the Strait of Hormuz will not be opened until the US meets Tehran's demands. Moreover, Iran-backed Houthis in Yemen escalated attacks on vessels in the Red Sea and Bab el-Mandeb Strait, targeting Saudi ships, leading to increased war-risk premiums.
The aforementioned fundamental backdrop favors USD bulls and warrants caution before positioning for an extension of the GBP/USD pair's recent move up witnessed over the past two weeks or so. However, the recent breakout through the 1.3500 mark suggests that the path of least resistance for spot prices remains to the upside.
Economic Indicator
Gross Domestic Product (QoQ)
The Gross Domestic Product (GDP), released by the Office for National Statistics on a monthly and quarterly basis, is a measure of the total value of all goods and services produced in the UK during a given period. The GDP is considered as the main measure of UK economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a rise in this indicator is bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
Read more.Next release: Thu Aug 13, 2026 06:00 (Prel)
Frequency: Quarterly
Consensus: 0.4%
Previous: 0.6%
Source: Office for National Statistics
Rabobank's Senior FX Strategist Jane Foley outlines a cautious stance on UK fiscal prospects and their impact on EUR/GBP. The Burnham government’s planned flexibility in fiscal rules and higher infrastructure spending could mean more gilt supply and tax speculation. Foley sees ongoing market nervousness into autumn and prefers buying EUR/GBP on dips toward 0.85, with resistance near 0.8578.
Euro cross supported by UK fiscal uncertainty
"Uncertainty about the budget could keep the UK market nervous into the autumn and we would look to buy EUR/GBP on dips back to 0.85, with the 50 day sma currently providing resistance around the 0.8578 area."
"The market may be more forgiving if the government is borrowing to invest, but extra gilt supply will still have to be absorbed, and infrastructure projects are likely to take years before they raise capacity."
"Either way, Burnham’s plans to ease the cost of living for the electorate still must be paid for."
"Speculation as to which taxes may go higher is already emerging and so too has speculation that this could have a contractionary impact on growth."
"This implies changing definitions of public debt to allow for more spending on infrastructure."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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