Forex News
- The US Dollar Index rebounds to near 100.10 amid fears of US-Iran ceasefire collapse.
- US CENTCOM launched attacks on Iran again in retaliation for shooting down the US Apache helicopter.
- The US monthly headline and core CPI growth cooled down to 0.5% and 0.2% in May, respectively.
The US Dollar (USD) claws back its slight early losses and edges higher during the European trading session amid intensifying fears that the ceasefire between the United States (US) and Iran, announced on April 8, could collapse due to the exchange of attacks in the last few days.
As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, turns positive at around 100.10.
On Wednesday, the US Central Command (CENTCOM) conducted military operations against Iran again, in retaliation for Tehran’s attack on a US Apache helicopter patrolling over the Strait of Hormuz earlier this week.
In response, Iran’s Foreign Ministry has condemned US attacks, calling the ceasefire “practically meaningless.
Meanwhile, a report from CNN has stated that negotiations between the US and Iran towards a permanent peace deal are still going on.
On the domestic front, soft US monthly Consumer Price Index (CPI) data, released on Wednesday, weighed slightly on the US Dollar. The report showed that monthly headline and core CPI grew at a moderate pace of 0.5% and 0.2%, respectively.
BNY’s Geoff Yu argues that Swiss Franc (CHF) positioning looks stretched as investors bet on policy tightening that the Swiss National Bank (SNB) is unlikely to deliver. He highlights subdued Swiss inflation, soft Gross Domestic Product (GDP) data and the risk that an European Central Bank (ECB) hike further dampens external demand. Yu notes that conditional inflation forecasts leave little justification for SNB rate hikes and sees policy remaining cautious.
Franc overheld versus Euro on policy mispricing
"As a generally zero- or even negative-yielding currency, the franc is rarely in an overheld position due to carry loss. There is passive hedging in place by CHF-denominated investors, but beyond regulatory mandates, we doubt such purchases are strongly encouraged – they conflict with the SNB’s general approach of deterring CHF purchases in normal times. Hence, when CHF moves into overheld territory on a standalone basis and is even better held than EUR, circumstances must be “abnormal.”"
"With the ECB moving toward a rate hike, circumstances are still very different, and there’s little chance the SNB can suddenly shift course. Headline inflation continues to run at relatively “normal” levels on a sequential basis, while Q1 GDP (sports-adjusted) surprised to the downside. There’s simply no demand-driven inflation impulse; if anything, the ECB’s hike will further slow demand among Switzerland’s key trading partners, and the SNB may even view hawkish policy as a risk to Swiss growth."
"Fundamentally, we continue to see a glaring inconsistency in how the market actually “prices” SNB policy. Interest rate futures still point to a 60% chance of a 25bp hike by the end of the year, perhaps in sympathy with the ECB, which is signaling a hawkish tilt. Despite current ECB guidance on rate hikes (which we expect to change as the Eurozone economy slows), options markets still point to marginally lower EUR/CHF via risk-reversals."
"Whatever the SNB’s own messaging, which we see as internally consistent, rate markets and FX options continue to point in opposite directions. If the SNB were truly worried about inflation, especially from external supply factors, there would be much greater tolerance of currency strength rather than an “increased willingness” to intervene. Ultimately, it comes down to the conditional inflation forecasts."
"We would also keep an eye on the Swiss Population Cap referendum, as its passage will have material implications for Swiss–EU relations in the long term."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- The European Central Bank is widely expected to raise interest rates by 25 basis points on Thursday.
- Investors will focus on whether the ECB signals that further tightening could follow in the coming months.
- The outlook remains clouded by the Middle East war, rising energy prices and weakening Eurozone growth.
The European Central Bank (ECB) is set to announce its monetary policy decision at 12:15 GMT following its June meeting. The Frankfurt-based institution is widely expected to raise its key interest rates by 25 basis points, taking the deposit facility rate to 2.25% from 2%. Such a move would mark the first rate hike since September 2023 and reflect policymakers’ growing concern about the inflationary impact of the energy shock caused by the war in Iran and the disruption of shipping routes in the Middle East.
ECB President Christine Lagarde will hold a press conference shortly after the announcement, at 12:45 GMT, where investors will seek guidance on whether June represents the start of a broader tightening cycle or merely a precautionary adjustment. The ECB is expected to publish updated staff projections alongside the decision, with economists anticipating higher inflation forecasts and weaker growth estimates compared with the March projections.
While a rate hike is largely priced in by financial markets, uncertainty remains elevated. Policymakers must balance the risk of inflation becoming more persistent against the danger of further weakening an already fragile Eurozone economy. As a result, communication regarding future policy steps is likely to be the key market driver.
What to expect from the ECB interest rate decision?
The ECB enters the June meeting facing a significantly different environment than it did only a few months ago. Eurozone inflation accelerated to 3.2% YoY in May from 3% in April, while core inflation rose to 2.5%, reflecting the gradual transmission of higher energy prices into broader price categories.
Several Governing Council members have openly supported a rate increase in recent weeks. ECB Chief Economist Philip Lane indicated that inflation projections would likely be revised higher, while Executive Board member Isabel Schnabel argued that the central bank could no longer simply “look through” the energy shock. Even traditionally dovish policymakers have acknowledged that a tightening of monetary policy may be necessary to prevent inflation expectations from becoming unanchored.
Updated ECB projections are expected to reinforce this view as several institutions forecast that inflation estimates for 2026 could be revised closer to 3%, up from 2.6% in March, while growth forecasts are likely to be downgraded as higher energy costs weigh on activity. Recent Purchasing Managers Index (PMI) surveys have already pointed to deteriorating business conditions, with Eurozone economic activity remaining in contraction territory.
Despite the expected hike, the ECB is unlikely to provide explicit forward guidance. Policymakers continue to emphasize a data-dependent and meeting-by-meeting approach, reflecting the exceptional uncertainty surrounding the geopolitical situation and future energy prices. Most analysts expect Christine Lagarde to maintain a cautiously hawkish tone, acknowledging upside risks to inflation while avoiding any commitment regarding the timing of additional moves.
The key debate within markets is whether June marks the beginning of a new tightening cycle or simply an insurance hike designed to preserve the ECB’s anti-inflation credibility. While some institutions foresee multiple hikes over the coming months, others argue that weakening growth, tighter financial conditions and limited evidence of wage-driven inflation should ultimately restrict the scope of further tightening.
How could the ECB meeting impact EUR/USD?
Ahead of the decision, markets have largely priced in a 25-basis-point rate increase, meaning the Euro’s immediate reaction may depend more on the ECB’s communication than on the decision itself.
A more hawkish-than-expected message from Christine Lagarde, particularly if she suggests that additional rate hikes could be warranted in July or September, would likely support the Euro (EUR) by pushing European rate expectations higher. An upward revision to inflation forecasts that highlights persistent price pressures could further reinforce this reaction.
Conversely, if the ECB emphasizes downside risks to growth and signals that June should not be interpreted as the start of an aggressive tightening cycle, the common currency could struggle to gain traction despite the rate increase. Traders would likely interpret such communication as confirmation that only limited additional tightening remains likely.
Interest rate differentials will remain a key driver for EUR/USD. While the ECB is expected to raise rates this week, the Federal Reserve (Fed) is widely expected to keep policy unchanged at its upcoming meeting, even as markets start to anticipate rate hikes later this year. This divergence could provide near-term support for the Euro if the ECB adopts a sufficiently hawkish tone.
Nevertheless, broader market themes remain highly influential, as developments in the Middle East conflict, energy markets and global risk sentiment could continue to dominate EUR/USD price action. As a result, unless the ECB substantially alters expectations regarding the future path of interest rates, the pair may remain driven as much by geopolitical developments as by monetary policy itself.
Since early June 2025, the EUR/USD pair has been trading within a broad horizontal range, with no clear trend. In the daily chart above, EUR/USD maintains a bearish near-term tone as spot remains anchored below the 50-day, 200-day and 100-day Simple Moving Averages (SMAs), clustered between roughly 1.1670 and 1.1692.
The downward resistance trend line, last intersected around 1.1704, continues to frame the broader downside bias. Meanwhile, the Relative Strength Index (RSI) at 38.9 indicates weak momentum but stops short of oversold territory, suggesting that sellers retain control, albeit with limited immediate exhaustion signals.
On the topside, initial resistance emerges at the 50-day SMA near 1.1670, followed closely by the 200-day SMA around 1.1678, creating a dense supply band just overhead. A move above these would then expose the 100-day SMA at 1.1692 ahead of the trend-line reference near 1.1704.
On the downside, the first support comes at the psychological 1.1500 level, close to Monday’s low. A break below this area could reinforce the bearish pressure and open the door for a move toward 1.1400, a key support zone located near the March 13 and August 1 lows. A sustained decline below 1.1400 would further strengthen the negative outlook and expose lower levels not seen since June 2025.
(The technical analysis of this story was written with the help of an AI tool.)
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger 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.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
Economic Indicator
ECB Press Conference
Following the European Central Bank’s (ECB) economic policy decision, the ECB President gives a press conference regarding monetary policy. The president’s comments may influence the volatility of the Euro (EUR) and determine a short-term positive or negative trend. If the president adopts a hawkish tone it is considered bullish for the EUR, whereas if the tone is dovish the result is usually bearish for the Euro.
Read more.Next release: Thu Jun 11, 2026 12:45
Frequency: Irregular
Consensus: -
Previous: -
Source: European Central Bank
- WTI falls amid easing supply disruption fears and raising hopes for renewed peace negotiations.
- A CNN report, citing a diplomatic source, confirmed that US-Iran peace deal negotiations remain intact despite recent military clashes.
- EIA data showed US crude stocks plunged by 7.2 million barrels, far exceeding the projected 4-million-barrel draw.
West Texas Intermediate (WTI) oil price pares its recent gains from the previous day, trading around $87.60 per barrel during the European hours on Thursday. Crude oil prices declined after the US military announced it had completed its latest strikes on Iran, raising hopes that peace negotiations could resume and tempering oil supply concerns. A report from CNN has confirmed through a diplomatic source that the US-Iran negotiations toward a peace deal are intact.
However, the Guardian reported that the Iranian Foreign Ministry has condemned overnight US strikes on Tehran, saying that “The illegal and criminal attacks by the US in recent hours are not only a flagrant violation of the United Nations Charter and the fundamental rules of international law regarding respect for national sovereignty and territorial integrity of states, but have also rendered the April 8 ceasefire practically meaningless.”
Earlier, the Israeli military's Home Front Command quickly issued early warnings following rocket launches from Lebanon toward northern Israel, keeping markets on edge. This followed earlier fresh US attacks on Iran after President Trump accused Tehran of intentionally delaying talks over an interim peace agreement.
US Energy Information Administration (EIA) reported that domestic crude inventories plummeted by 7.2 million barrels last week as refiners scrambled to plug supply gaps caused by the conflict. This drop far exceeded the 4-million-barrel draw projected by analysts in a Reuters poll, dragging the Strategic Petroleum Reserve (SPR) down to its lowest levels since August 2023. In an effort to curb rising fuel costs, the US Department of Energy announced it is seeking to loan energy companies up to 40 million barrels of crude oil from the depleted reserve.
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.
- USD/CAD gains strong positive traction as an intraday slump in Oil prices undermines the Loonie.
- The divergent Fed-BoC policy expectations counter softer USD and contribute to the momentum.
- Overstretched conditions on the daily chart warrant some caution before placing fresh bullish bets.
The USD/CAD pair attracts fresh buyers following an intraday dip to the 1.3930 area on Thursday and builds on the overnight bounce from the weekly low. The momentum lifts spot prices to the 1.3970 region, or the highest since December 2025, during the first half of the European session, and is sponsored by an intraday decline in Crude Oil prices, which tends to benefit the commodity-linked Loonie.
Despite renewed hostilities between the US and Iran, reports suggest that diplomatic efforts towards a permanent peace deal are still on track. This keeps hopes alive for a resolution to end the over three-month-old war, which, in turn, is seen as a key factor exerting downward pressure on Crude Oil prices. Adding to this, the Bank of Canada (BoC) maintained a dovish stance as policymakers are prioritizing a sluggish economy over inflation threats. This, in turn, is seen exerting heavy pressure on the Canadian Dollar (CAD) and acting as a tailwind for the USD/CAD pair.
Meanwhile, the aforementioned supporting factors largely offset a modest US Dollar (USD) downtick, led by easing concerns over a runaway inflation spiral following the release of a soft US Consumer Price Index (CPI) on Wednesday. Nevertheless, traders are still pricing in a 70% chance that the US Federal Reserve (Fed) will raise interest rates by the end of this year. This, along with persistent geopolitical uncertainties stemming from the ongoing Middle East crisis, should act as a tailwind for the USD and back the case for a further appreciation for the USD/CAD pair.
Even from a technical perspective, spot prices hold well above the 200-day Simple Moving Average (SMA), retaining a bullish near-term bias and keeping the broader uptrend supported. Moreover, momentum indicators remain constructive but slightly stretched. In fact, the Moving Average Convergence Divergence (MACD) indicator stays in positive territory, hinting that upside pressure persists. That said, the Relative Strength Index (14) is hovering in overbought territory near 74, pointing to the growing risk of a near-term corrective pullback.
On the downside, initial support is located at the 1.3968 area, with a deeper pullback exposing the 200-day SMA at 1.3816, where dip-buying interest could re-emerge. As long as USD/CAD holds above this moving average, the technical structure favors further gains after any consolidation, though overbought readings warn that fresh bullish follow-through may be increasingly selective at current levels.
(The technical analysis of this story was written with the help of an AI tool.)
USD/CAD daily chart
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
Societe Generale strategists highlight that EUR/USD remains under pressure after slipping below its 200-day moving average in May, with spot trading near a two‑month low. The pair is holding just above the April trough around 1.1500, with nearby options expiries and European Central Bank (ECB) communication seen as key drivers for whether support at 1.1500 holds or a deeper decline unfolds.
Pair hovers near critical support
"EUR/USD has extended its pullback after slipping below the 200-DMA in May. It has tentatively held above the April trough near 1.1500."
"Should a short-term bounce materialize, the recent pivot high around 1.1645/1.1675, which coincides with the 200-DMA, may act as an important resistance."
"A break below 1.1500 may deepen the decline towards the next projections at 1.1440 and the lower bound of the multi-month range near 1.1410/1.1390."
"With all the uncertainty in mind, the ECB is unlikely to start the firing gun today on a tightening cycle. Three hikes by early 2027 is aggressive. Market reaction will depend on the new inflation projections and underlying technical assumptions."
"A split decision and olive branch to the council doves (no pre-commitment) can in theory bull steepen the curve and pressure EUR/USD towards 1.15."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Silver nudges up to levels above $64.00 after bouncing from more than two-month lows, at $61.50.
- Reports pointing to ongoing US-Iran negotiations have provided some support to
- XAG/USD remains vulnerable while below the $66.00 area.
Silver (XAG/USD) appreciates on Thursday, reaching session highs at $64.50 at the time of writing, after hitting two-and-a-half-month lows at $61.50 earlier on the day. News about ongoing negotiations between the US and Iran has soothed markets, providing some support to the ailing white metal.
CNN News reported earlier on Thursday that US-Iran talks are still on track, citing a diplomatic source, which raises hopes of a negotiated end to the war. The precious metal had extended its decline earlier on the day, as the US launched a new round of attacks on Iran’s military sites and Tehran responded by targeting US assets in the area.
In the US, Consumer Price Index (CPI) figures released on Wednesday showed that inflation rose at its fastest yearly pace in more than three years, increasing hopes that the Federal Reserve (Fed) will be forced to hike interest rates at least once this year. The CPI release sent US Treasury yields and the US Dollar higher, adding weight on precious metals.
Technical Analysis: Silver remains vulnerable while below $66.00
XAG/USD bounces up from oversold levels but retains the bearish near-term bias intact, with upside attempts likely to meet significant resistance at a previous support zone above $66.00. Momentum indicators remain soft, with the 4-hour Relative Strength Index below the key 50 level and the Moving Average Convergence Divergence (MACD) near zero, suggesting lower downside pressure rather than a decisive reversal.
Bulls would have to breach the June 8 low at $66.04 to ease downside pressure and shift the focus to the confluence of the bearish channel's top, at $68.50, and the June 8 and 9 highs around the $69.00 area.
On the downside, the pair might find support at the channel floor, now around $62.00, although the key support area is the year-to-date low, near $61.00. Further down, the next target would be the $60.00 psychological area.
(The technical analysis of this story was written with the help of an AI tool.)
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.
Deutsche Bank highlights that the Bank of Canada left its policy rate unchanged at 2.25% but stressed flexibility. Governor Macklem indicated that sustained higher energy prices could require consecutive rate hikes, while potential US trade restrictions might instead justify rate cuts. Canadian 10‑year bonds modestly outperformed, with yields edging only slightly higher.
BoC balances energy inflation and trade risks
"We also had the Bank of Canada’s latest decision yesterday."
"They left their policy rate unchanged at 2.25%, as was widely expected, and they kept their options open given the current uncertainty."
"For instance, Governor Macklem suggested that if higher energy prices led to higher inflation, then “there may be a need for consecutive increases in the policy rate”."
"But he also suggested that additional US trade restrictions could mean they “may need to cut the policy rate further to support economic growth.”"
"Against that backdrop, Canadian bonds saw a relative outperformance yesterday, with the country’s 10yr yield (+0.9bps) seeing a modest increase to 3.49%."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- The Indian Rupee faces intense selling pressure against the US Dollar due to a strong recovery in oil prices.
- FIIs continue to squeeze their stake in the Indian stock market.
- India’s CPI in May is seen higher at 4% YoY from 3.48% in April.
The Indian Rupee (INR) tumbles at open against the US Dollar (USD) on Thursday, with the USD/INR pair rising to near 95.75. The pair gains as a sharp recovery in oil prices due to fears surrounding the collapse of the ceasefire between the United States (US) and Iran has weakened the Indian Rupee.
In India’s morning session, the MCX Crude Oil contract expiring on June 18 is up 0.7% to near 8,787. The contract surged 3.6% on Wednesday even after recovering significant losses.
The appeal of currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, diminishes in a high oil price environment.
US confirms attacks don't mean the restart of an all-out war
On late Wednesday, the US Central Command (CENTCOM) confirmed that it launched additional “self-defense strikes” on multiple targets in Iran as retaliation against Tehran’s "unwarranted and continued aggression”. This came after the US CENTCOM launched a series of attacks on Iran’s air defense, ground control stations, and surveillance radar sites near the Strait of Hormuz on Tuesday in response to Iran shooting down the US Apache helicopter.
Additional military operations from Washington were already anticipated as US President Donald Trump said in an interview with Fox News that he is close to ordering new strikes against Iran for taking too long in finalizing a deal.
Before remarks pointing to ordering fresh strikes against Iran, US President Trump also said in a post on Truth Social that Iran has to pay the price for taking too much time in reaching a deal.
However, the ceasefire between the US and Iran announced in April appears not to have collapsed yet as US President Trump has told aides to deliver a message to Iran via Qatar that the attacks did not mean a “restart of all-out war,” and were only in response to the helicopter downing, The Wall Street Journal (WSJ) reported.
FIIs sentiment towards Indian stock market remains dull
Overseas investors continue to pare their stake in the Indian stock market as higher oil prices keep weighing on India Inc.’s earnings projections. So far in June, Foreign Institutional Investors (FIIs) have remained net sellers on all trading days and have offloaded their stake worth Rs. 62,654.34 crore.
India’s CPI data awaited
On the domestic front, the major trigger for the Indian Rupee will be the Consumer Price Index (CPI) data for May, which will be published on Friday. Investors will closely monitor the data to get fresh cues regarding the Reserve Bank of India’s (RBI) monetary policy outlook.
In the policy meeting last week, the RBI kept the Repo Rate unchanged at 5.25%, as expected, and warned that the central bank would need to act “if inflation gets generalized”.
India’s CPI data is expected to arrive higher at 4% Year-on-Year from 3.48% in April.
Technical Analysis: USD/INR reflects a sideways trend in an overall bullish structure
USD/INR trades higher at around 95.75 at press time. The near-term trend of the pair appears to be sideways in an overall bullish structure amid the Symmetrical Triangle formation. The pair remains close to the 20-day exponential moving average (EMA), which is at 95.4886, indicating a sideways trend.
The Relative Strength Index (RSI) at 53.79 is near neutral but slightly positive, hinting that upside pressure persists, even as the pair consolidates beneath the descending resistance trend structure derived from prior highs.
On the topside, initial resistance is seen at the bearish trend-line break area near 96.03, where a clear daily close above would open the way for a more sustained recovery towards the all-time high at 97.08. On the downside, immediate support sits at the 20-day EMA at 95.49, with the next, more structural, floor at the rising trend-line region around 94.77; a break below this latter level would weaken the current constructive tone and expose deeper retracements.
(The technical analysis of this story was written with the help of an AI tool.)
- Gold recovers slightly after touching a fresh year-to-date low during the Asian session on Thursday.
- Mostly in-line US CPI report keeps the USD bulls on the defensive, lending support to the commodity.
- Rising US-Iran tensions and Fed rate hike bets limit deeper USD losses and cap the precious metal.
Gold (XAU/USD) trades around the $4,100 mark during the first half of the European session and is looking to build on a modest intraday recovery from its lowest level since November 2025, touched earlier this Thursday. The US Dollar (USD) remains on the defensive as a softer Core US Consumer Price Index (CPI) eased concerns about a runaway inflation spiral, lending some support to the precious metal. That said, hawkish US Federal Reserve (Fed) expectations, along with renewed hostilities between the US and Iran, act as a tailwind for the Greenback and cap the upside for the bullion.
The US Labour Department reported on Wednesday that the core CPI, which excludes volatile food and energy prices, cooled off to 0.2% in May compared to the previous month’s 0.4%, while the yearly rate stood at 2.9%, matching expectations. The headline CPI, however, accelerated from the 3.8% YoY rate in April to 4.2% during the reported month, marking the highest level in three years due to a jump of 23.5% in energy costs. Furthermore, the risk of a further escalation of US-Iran tensions and the closure of the Strait of Hormuz acts as a tailwind for Crude Oil prices.
Iran announced the closure of the Strait of Hormuz after the US launched a fresh wave of strikes across the country under orders from US President Donald Trump. Iran’s joint military command said that its armed forces will give a “crushing and decisive” response to any “aggression” from the US in the region. This, in turn, helps Crude Oil prices to move away from a two-month low, touched on Tuesday, fueling inflationary concerns and bolstering prospects for more hawkish central banks. In fact, traders are currently pricing in a 70% chance of a Fed rate hike this year.
The outlook, in turn, remains supportive of elevated US Treasury bond yields and favors the USD bulls, suggesting that the path of least resistance for Gold remains to the downside. Market participants now look to the US Producer Price Index (PPI) data, due later in the day, which could shed more light on the Fed's monetary policy stance. Furthermore, developments surrounding the Middle East crisis might continue to infuse volatility. This, in turn, should influence the USD price dynamics and produce some meaningful trading opportunities around the Gold price.
XAU/USD daily chart
Gold might struggle to capitalize on the recover amid a bearish setup
From a technical perspective, the recent breakdown through the very important 200-day Simple Moving Average (SMA) and a downward-sloping channel favors the XAU/USD bears. Moreover, the Moving Average Convergence Divergence (MACD) remains deeply negative, reinforcing the broader bearish tone. However, the Relative Strength Index (RSI) sits in oversold territory, hinting that while downside pressure dominates, the pace of the decline could start to moderate.
Meanwhile, the previous metal might now confront an initial barrier near the descending channel support breakpoint, around $4,257.39. This is followed by the 200-day SMA at $4,446.37 and the channel top near $4,572.06. As long as price holds below these stacked resistance levels, bears retain control, and any recovery is likely to be treated as a corrective move rather than a trend reversal.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
Producer Price Index (YoY)
The Producer Price Index released by the Bureau of Labor statistics, Department of Labor measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Changes in the PPI are widely followed as an indicator of commodity inflation. Generally speaking, a high reading is seen as positive (or bullish) for the USD, whereas a low reading is seen as negative (or bearish).
Read more.Next release: Thu Jun 11, 2026 12:30
Frequency: Monthly
Consensus: 6.4%
Previous: 6%
Source: US Bureau of Labor Statistics
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