Forex News
HSBC Asset Management notes that political uncertainty and higher Oil prices have added volatility to Turkish assets and pressured reserves. Yet the MSCI Türkiye Index has held up, supported by healthy reserves and a managed Lira float. The central bank’s orthodox stance since 2023, focused on high rates to tame inflation, is seen as a key anchor for market resilience.
Lira support and orthodoxy aid resilience
"Recent domestic political uncertainty in Türkiye has injected some volatility into the country’s asset markets. Meanwhile, conflict in the Middle East and the associated rise in oil prices have pressured reserves, given that Türkiye is a big net oil importer. However, the MSCI Türkiye Index has been performing well."
"This is a good example of how EM economies are proving increasingly resilient. In the case of Türkiye, this reflects two main factors."
"First, helped by the surge in gold prices in recent years, international reserves remain sufficiently healthy to keep the managed float of the lira alive. This limits the lira’s depreciation."
"Second, policymakers have been disciplined. Following a pivot to economic orthodoxy in May 2023, Türkiye’s central bank (CBRT) has pursued policies focused on taming inflation through high interest rates, unperturbed by domestic political developments."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Societe Generale analysts highlight that Brazil’s 1Q Gross Domestic Product (GDP) rebounded to 1.1% qoq, supported by fiscal stimulus and mining, but at the cost of higher inflation and a worsening deficit. With inflation expectations deteriorating and the Banco Central do Brasil (BCB) warning on its 3% target, the bank notes USD/BRL is consolidating below 5.05, with the next resistance hurdle at 5.08 and an upside bias.
Consolidation below 5.05 with upside bias
"In Latam, 1Q GDP growth in Brazil rebounded to 1.1% qoq from an upwardly revised 0.3% in 4Q, supported by government stimulus and strong mining activity."
"Fiscal stimulus to insulate the economy from the war and boost consumption ahead of the October election lifted growth but are adding worsening the trade off with inflation and the public deficit. Headline inflation accelerated to 4.64% in early May and inflation expectations are deteriorating."
"BCB monetary policy director Nilton David sounded the alarm on rising inflation expectations and said that the BCB has an obligation to deliver on the 3% target. Will the BCB opt to pause in June after two straight cuts? "
"USD/BRL for now is consolidating below 5.05 (50dma) but bias for the pair remains for upside with next hurdle eyed at 5.08."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/CAD climbs as Iran suspends negotiations with Washington over tensions in Lebanon.
- Canada’s manufacturing activity slows in May as recession concerns linger.
- Traders now await US and Canadian labor market data due later this week.
The Canadian Dollar (CAD) trades on the back foot against the US Dollar (USD) on Monday as renewed tensions in the Middle East lift the Greenback. At the time of writing, USD/CAD trades around 1.3834, up nearly 0.27% on the day.
Iran’s semi-official Tasnim News Agency reported that Tehran has suspended negotiations with Washington over Israel’s continued military operations in Lebanon against Hezbollah. The report also said Iran has vowed to fully block the Strait of Hormuz.
Earlier on Monday, Iran’s Foreign Ministry spokesperson Esmaeil Baghaei said “a ceasefire in Lebanon is an integral part of any agreement to end the war with the United States.”
Meanwhile, US President Donald Trump attempted to calm markets, saying on Truth Social that he had a “very good call” with Hezbollah representatives and that “all shooting will stop.”
Following Trump’s comments, the US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trims part of its intraday gains and trades around 99.16 after hitting a daily high near 99.39. The index remains up nearly 0.25% on the day.
Meanwhile, the Canadian Dollar is also weighed down by weak Gross Domestic Product (GDP) data released last week. Bank of Canada (BoC) Senior Deputy Governor Carolyn Rogers said “two quarters of annualized GDP decline meets one recession definition,” while noting that “I think we need to be careful not to put too much weight on any one indicator,” she told a parliamentary committee.
Slowing economic growth could ease pressure on the BoC to raise interest rates even as the inflation outlook deteriorates amid rising Oil prices.
At the same time, inflation in the United States remains well above the Federal Reserve’s (Fed) 2% target, while economic activity continues to hold up, reinforcing expectations that the Fed could keep interest rates higher for longer or even consider raising rates again if inflation pressures intensify.
On the data front, the ISM Manufacturing Purchasing Managers Index (PMI) climbed to 54 in May from 52.7 in the previous month, marking its highest reading since May 2022. However, Canada’s S&P Global Manufacturing PMI eased to 52.9 in May from 53.3 in April.
Looking ahead, attention now turns to labor market data from both the US and Canada due on Friday for fresh clues on the interest-rate outlook.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
United States (US) President Donald Trump stated on Monday that he is unconcerned about the future of negotiations with Iran, saying, "I don't care if negotiations with Iran are over," during an interview with CNBC. Trump also claimed that talks are continuing, at a rapid pace, with the Islamic Republic of Iran on his Truth Social account.
Key takeaways:
I don't care if negotiations with Iran are over.
I'm not worried about Oil prices if Iran blocks the Strait of Hormuz.
I had a very productive call with Prime Minister Bibi Netanyahu.
There will be no troops going to Beirut, and any troops that are on their way have already been turned back.
Through highly placed representatives, I had a very good call with Hezbollah, and they agreed that all shooting will stop.
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.
- US ISM Manufacturing PMI rose to 54 in May, beating expectations and supporting the US Dollar.
- Renewed tensions in the Middle East pressured risk sentiment, weighing on the Australian Dollar.
- Friday's US Nonfarm Payrolls report will be the focus for clues on the Fed's next policy moves.
The AUD/USD pair trades near the 0.7160 region on Monday as the United States Dollar (USD) strengthens following upbeat manufacturing data, while renewed geopolitical tensions and cautious market sentiment weigh on the Australian Dollar (AUD).
The latest Institute for Supply Management (ISM) Manufacturing PMI rose to 54 in May from 52.7 in April, surpassing market expectations of 53 and signaling accelerating growth in the US manufacturing sector.
Meanwhile, risk-sensitive currencies such as the Australian Dollar came under pressure after Iran reportedly halted message exchanges with the US following attacks on Lebanon. The development revived concerns about broader tensions in the Middle East, boosting demand for the US Dollar and other defensive assets.
Short-term technical analysis:
On the 4-hour chart, AUD/USD trades at 0.7161. The pair maintains a neutral-to-mildly-constructive tone, trading above the 20-period Simple Moving Average (SMA) at 0.7156 but remains capped by the 100-period SMA at 0.7175. This configuration suggests consolidation within a tight range, with short-term buyers defending the recent recovery while the broader upturn remains unconfirmed. The Relative Strength Index (RSI) hovers at 50.0, hinting at balanced momentum after the latest bounce.
On the topside, initial resistance emerges at 0.7163, the nearby horizontal barrier, followed by the 100-period SMA at 0.7175, where a sustained break would be needed to open a more decisive bullish phase. On the downside, immediate support is provided by the 20-period SMA at 0.7156, with further cushions at 0.7152 and 0.7148, ahead of a more significant floor around 0.7135. A clear move outside this 0.7135–0.7175 band would likely define the next directional leg.
(The technical analysis of this story was written with the help of an AI tool.)
Brown Brothers Harriman’s (BBH) Elias Haddad expects the National Bank of Poland (NBP) to keep its policy rate at 3.75% and sees its easing cycle as effectively over. Despite inflation running above projections, softer Gross Domestic Product (GDP) growth and a recent downside surprise in Consumer Price Index (CPI) argue against imminent hikes. Haddad anticipates USD/PLN will continue to trade within a narrow 3.6000–3.7000 band.
NBP on hold, rangebound Zloty
"National Bank of Poland (NBP) is widely expected to keep the policy rate at 3.75% for a third straight meeting. NBP signaled that its easing cycle, which saw it deliver 200bps of cuts in the past year, is over."
"However, it’s too soon to bet on rate hikes even though headline and core inflation in Poland are tracking above the NBP’s Q2 projection of 2.4% and 2.6%, respectively."
"First, headline CPI unexpectedly dropped -0.1ppt to 3.1% y/y in May (consensus: 3.6%) suggesting limited passthrough from the energy shock. Second, real GDP grew less than expected in Q1 (0.5% q/q, consensus: 0.7%) and slowed at an annual pace of 3.4% (NBP forecast: 4.0%) vs. 4.1% in Q4."
"We expect USD/PLN to continue trading within a narrow 3.6000-3.7000 range."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
BNP Paribas sees Japan’s Gross Domestic Product (GDP) growth slowing to 0.5% in 2026 from 1.1% in 2025 as the energy shock weighs on activity. Inflation is expected to stay above the 2% target through at least 2028. The Bank of Japan (BoJ) is projected to continue its gradual normalisation, with a 25 bp hike in Q2 2026 and a terminal rate of 2.0% by end-2027, while USD/JPY stabilises around 160.
Energy shock but steady policy normalisation
"The energy shock is set to impact the strong momentum of the Japanese economy negatively."
"We expect annual GDP growth to stand at 0.5% in 2026, down from 1.1% in 2025."
"Inflation has generally overshot the 2% y/y target since 2022 and is expected to stay there through at least 2028."
"Accordingly, the Bank of Japan initiated a process of “adjustment in the degree of monetary accommodation” in 2024, lifting the policy rate to 0.75% so far (previously negative)."
"We expect the process to extend, including one hike (25pb) in Q2 2026, until a 2.0% terminal rate in end-2027."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- The Dow eased back from last week's record highs after Iran suspended talks with the US and threatened to close both the Strait of Hormuz and the Bab-el-Mandeb Strait.
- Oil jumped close to 5% on the escalation, yet a firm bid across AI and chip names kept the broader tape from buckling.
- A heavy data week looms, headlined by Friday's monthly jobs report, with a hot manufacturing survey already on the board.
The Dow Jones Industrial Average traded around 0.4% lower Monday, shedding roughly 200 points to sit near 50,800 after pulling back from the record-area highs above 51,100 set last week. The S&P 500 was only marginally lower and the Nasdaq Composite hovered close to flat, a split that tells the day's real story: a serious geopolitical escalation met a market that mostly refused to flinch. Iran tearing up the diplomatic track and pointing at the world's two most important Oil chokepoints sent crude sharply higher, but with AI and semiconductor names doing the heavy lifting, equities are once again treating Middle East risk as background noise.
Iran tears up the script
Iran's state-linked Tasnim outlet said Monday that Tehran has stopped passing messages to the US through intermediaries and intends to fully close the Strait of Hormuz while activating the Bab-el-Mandeb Strait, demanding Israel halt operations in Lebanon and Gaza first. The threat lands after Iran reportedly fired ballistic missiles at US forces in Kuwait overnight, a reminder that the fragile ceasefire is fraying rather than firming. Roughly a fifth of global Oil moved through Hormuz before the war, and both routes are central to energy and trade flows, so the market response was immediate as crude surged close to 5%. For an index sitting at record highs, the muted equity reaction looks less like calm and more like complacency, exactly the kind of setup JPMorgan's Jamie Dimon flagged last week when he warned that risk is being underpriced.
Tech does the heavy lifting
Nvidia (NVDA) climbed around 4% to 5% after unveiling a new AI laptop chip at the Computex conference in Taipei, reigniting the same AI trade that has carried Wall Street to records through the entire Iran conflict. Microsoft (MSFT) added more than 2%, while IBM (IBM) and Micron (MU) each rose more than 5%. That strength is why the Nasdaq barely moved and the S&P 500 held up despite energy-driven selling elsewhere, and it is the main reason the Dow's loss stayed shallow. The pattern is familiar by now: every time geopolitics threatens to break the rally, the AI bid shows up to absorb the blow.
Berkshire goes shopping
The day's standout corporate story came from Berkshire Hathaway (BRK.B), which agreed to buy homebuilder Taylor Morrison (TMHC) in an all-cash deal worth about $6.8 billion, a premium of roughly 24% to Friday's close. Taylor Morrison jumped more than 20% on the news. It is the largest acquisition since Greg Abel took over as chief executive, and a clear signal that Berkshire sees value in US housing even with borrowing costs elevated and the Federal Reserve (Fed) leaning the wrong way for rate-sensitive sectors.
The Dollar and bonds say what stocks won't
The cleaner read on risk came from outside equities. The US Dollar firmed around 0.3% as money moved toward safety, and Treasury yields pushed higher as the Oil spike revived inflation worries. That combination matters because markets are now pricing the Fed to raise rates rather than cut them, a sharp reversal from the cuts traders expected at the start of the year, with new Chair Kevin Warsh inheriting an inflation problem the Iran war keeps feeding. Higher yields and a stronger Dollar dragged on metals, with Gold and Silver both lower, while Bitcoin slid toward $70K on a tenth straight day of exchange-traded fund outflows. Risk-off in everything except the stock index people watch most.
A loaded data week
Even before Friday, the calendar is stacked. The Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) for May printed at 54 at 14:00 GMT, beating the 53 consensus and accelerating from April, a sign factory activity is firming rather than fading. Prices paid cooled to 82.1, below both the prior month and forecasts, but stayed elevated enough to keep the inflation narrative alive. From here the docket only gets heavier: Job Openings and Labor Turnover Survey (JOLTS) data Tuesday, ADP payrolls and ISM Services Wednesday, jobless claims Thursday, and the main event, Nonfarm Payrolls (NFP), on Friday at 12:30 GMT. Consensus looks for just 85K jobs, a sharp step down from the prior 115K, alongside average hourly earnings that will be read closely for wage pressure. With geopolitics boiling and the Fed leaning hawkish, a market this close to record highs is walking into the data with very little margin for error.
Dow Jones 5-minute chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
- Gold starts the week on the back foot as slow US-Iran talks keep buyers cautious.
- The US Dollar remains the preferred safe-haven asset, weighing on XAU/USD despite elevated geopolitical risks.
- Technically, XAU/USD remains bearish, while weak momentum indicators underpin the downside bias.
Gold (XAU/USD) kicks off the week with a negative bias as slow progress toward a US-Iran ceasefire extension deal and fresh attacks in the Middle East keep buyers cautious. At the time of writing, XAU/USD is trading around $4,470 after briefly sliding below the $4,450 mark earlier in the American session.
Iran’s semi-official Tasnim News Agency reported that Tehran has suspended message exchanges with Washington over Israel’s military operations in Lebanon. The report comes as Israel expands its military offensive against Hezbollah in southern Lebanon.
US Central Command (CENTCOM) said it carried out “self-defense strikes” on Iranian radar and drone facilities over the weekend. Iran’s Revolutionary Guard said on Monday they had targeted an air base used by US forces in retaliation for an attack on southern Iran.
Iran’s Foreign Ministry spokesperson Esmaeil Baghaei said “lack of trust, constant changes in the US position and Israeli actions in Lebanon” are delaying the diplomatic process.
Negotiations between Washington and Tehran continue to face hurdles as both sides remain far apart on major issues such as Iran’s nuclear program, sanctions relief and the future status of the Strait of Hormuz.
Despite heightened geopolitical tensions, XAU/USD is down more than 15% since the war began and is nearly 20% below its all-time high near $5,600, set in late January. The US Dollar (USD) has emerged as the preferred safe-haven asset at the expense of Gold.
A stronger Greenback makes Gold more expensive for foreign buyers. Another headwind for the precious metal comes from the sharp rise in Crude Oil prices. West Texas Intermediate (WTI) Crude Oil is up more than 5% on Monday.
Higher energy costs are adding to inflationary pressure and reinforcing expectations that major central banks, including the Federal Reserve (Fed), may need to keep monetary policy tighter for longer.
While Gold is traditionally seen as a hedge against inflation, for now markets are paying more attention to where interest rates are headed. A higher interest rate environment raises the opportunity cost of holding non-yielding assets.
According to the CME FedWatch Tool, markets are pricing in a 40% chance of a 25-basis-point (bps) rate hike at the December meeting. Resilient US economic data has also dimmed hopes for near-term interest rate cuts.
Against this backdrop, any recovery in Gold is likely to attract selling interest unless Washington and Tehran reach a lasting agreement that drives Oil prices lower and helps ease inflation concerns.
On the data front, the S&P Global US Manufacturing Purchasing Managers Index (PMI) rose to 55.1 in May from 54.5 in April, while the ISM Manufacturing PMI climbed to 54.0, marking its highest reading since May 2022. Looking ahead, traders await the US Nonfarm Payrolls (NFP) report due on Friday for fresh clues on the Fed’s interest-rate path.
Technical analysis: XAU/USD stays bearish below $4,600 resistance
On the daily chart, XAU/USD holds a modest bearish bias, with price retreating below the nearby horizontal resistance at $4,600 while remaining capped well beneath the 100-day Simple Moving Average (SMA) at roughly $4,801.
The 200-day SMA at about $4,411 sits below spot and still underpins the broader uptrend, but the Relative Strength Index (RSI) near 43 and a modest Average Directional Index (ADX) around 24 suggest soft downside pressure in a relatively weak directional environment.
On the topside, initial resistance is seen at the $4,600 horizontal barrier, with a sustained break needed to expose the 100-day SMA near $4,802 as the next bullish objective.
On the downside, immediate support is provided by the 200-day SMA around $4,410, ahead of more substantial structural demand at the $4,100 horizontal level. A daily close below this latter floor would likely reinforce the prevailing bearish tone.
(The technical analysis of this story was written with the help of an AI tool.)
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.
- US-Iran talks stall as ceasefire risks intensify over the weekend.
- ISM Manufacturing hits a four-year high, supporting the US Dollar.
- BoE Bailey remarks, and UK hearings headline the domestic calendar.
The Pound Sterling (GBP) steadies on Monday agains the US Dollar (USD) as speculation of a peace deal between the US and Iran fades, following weekend exchanges of fire that are a headwind for GBP/USD, which trades near 1.3445 at the time of writing.
GBP/USD slips as renewed geopolitical risks lift haven Dollar demand
Market mood shifted neutrally after an upbeat close last week. Negotiations between the US and Iran seem to have halted as “Iran stops exchanging messages with the US in protest against Zionist crimes,” reported Tasnim news agency. Iranian state TV reported that the probability of the ceasefire ending between both parties is high if Israel’s attacks on Lebanon don’t stop.
Consequently, the Greenback extends its gains, with the US Dollar Index (DXY), which measures the buck's performance against a basket of six currencies, up 0.34% to 99.27.
The economic data dump in the US began with the ISM Manufacturing PMI rising to its highest level in four years, as businesses front-loaded orders to avoid price increases. The index rose to 54 in May, up from 52.7 in April. The sub-component of prices paid dipped from 84.6 in April to 82.1.
The report is positive for the US economy, though geopolitical uncertainty boosted the Dollar's haven appeal. Traders' eyes will be on Friday’s Nonfarm Payrolls figures for May, along with other jobs data, the ISM Services PMI and speeches by Federal Reserve officials.
In the UK, the economic docket was absent, but traders are eyeing remarks from the Bank of England Governor Andrew Bailey and the BoE Monetary Policy Report Hearings on Wednesday.
The Pound has been underpinned by money market expectations, with traders expecting nearly 42 basis points of tightening towards the end of the year, according to Prime Terminal data.
GBP/USD Price Forecast: Technical outlook
In the daily chart, GBP/USD trades at 1.3454. The pair holds a modest bullish bias as it remains above the cluster of simple moving averages around 1.3447 and continues to respect the broader upward support line drawn from 1.3159, whose break level sits lower near 1.3351. Momentum is constructive but not overextended, with the 14-day Relative Strength Index hovering just under 49, hinting at steady rather than explosive buying interest while price consolidates above its key moving average base.
On the topside, initial resistance is defined by the descending trend-line structure, with its break level projected near 1.3602; a daily close above that barrier would open the door to a more convincing recovery phase. On the downside, immediate support is provided by the grouped simple moving averages around 1.3447, ahead of firmer structural backing at the former trend-line break zone near 1.3351, where buyers would be expected to show up to defend the broader uptrend.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.32% | 0.02% | 0.24% | 0.29% | 0.43% | 0.98% | 0.76% | |
| EUR | -0.32% | -0.29% | -0.11% | -0.02% | 0.16% | 0.67% | 0.42% | |
| GBP | -0.02% | 0.29% | 0.19% | 0.26% | 0.39% | 0.95% | 0.69% | |
| JPY | -0.24% | 0.11% | -0.19% | 0.07% | 0.20% | 0.76% | 0.51% | |
| CAD | -0.29% | 0.02% | -0.26% | -0.07% | 0.12% | 0.68% | 0.44% | |
| AUD | -0.43% | -0.16% | -0.39% | -0.20% | -0.12% | 0.49% | 0.30% | |
| NZD | -0.98% | -0.67% | -0.95% | -0.76% | -0.68% | -0.49% | -0.24% | |
| CHF | -0.76% | -0.42% | -0.69% | -0.51% | -0.44% | -0.30% | 0.24% |
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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
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