Forex News

BNP Paribas strategists see Japan’s Gross Domestic Product (GDP) growth slowing to 0.8% in 2026 from 1.1% in 2025 as higher inflation and energy-related costs weigh on activity, partly offset by fiscal support and AI (Artificial intelligence) investment. The Bank of Japan (BoJ) is expected to keep hiking by 25 bp every four to five months toward a 2.50% terminal rate by 2028, while USD/JPY is projected at 165 by Q4 2026.

Gradual BoJ hikes with Yen depreciation

"We expect annual GDP growth to stand at 0.8% in 2026, down from 1.1% in 2025."

"Accordingly, the Bank of Japan initiated a cautious process of “adjustment in the degree of monetary accommodation” in 2024, lifting the policy rate to 1.0% so far (previously negative) – the highest since 1995."

"We expect a 25pb hike about every four to five months until a 2.50% terminal rate in 2028."

"Japan is facing long-term rates pressure, illustrated by historically high 10- and 30-year yields, probably fueled by the level of public debt and the pace of monetary adjustment."

"We anticipate a depreciation of the yen and the GBP against the dollar in 2026 (USD/JPY 165 and GBP/USD 1.32 by Q4 2026) and 2027."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Commerzbank’s Charlie Lay notes Monetary Authority of Singapore (MAS) unexpectedly tightened policy for a second meeting, slightly increasing the Singapore Dollar (SGD) Nominal Effective Exchange Rate (NEER) slope and stressing the move was smaller than April’s. He says MAS is signalling greater concern over inflation risks than growth, with stronger-than-expected H1 2026 growth and forecasts likely to be revised up, while USD/SGD only slipped modestly to around 1.2890.

Second consecutive MAS tightening step

"In a surprise move, the Monetary Authority of Singapore (MAS) tightened monetary policy for the second consecutive meeting. It increased the rate of appreciation of the SGD NEER policy band “very slightly”, with no changes to the centre or width of the band. Importantly, MAS said that the increase was smaller than the tightening in April."

"MAS could have easily left policy unchanged given that inflation remains relatively benign and energy prices have retreated from their April peaks."

"Its decision to act signals that MAS remains more concerned about the upside risks to inflation than the downside risks to growth."

"Growth was stronger-than-expected in H1 2026 at 6%. The official forecast is likely to be revised up from 2-4% currently."

"MAS maintained its headline and core inflation forecasts at 1.5-2.5% for 2026. USD/SGD fell only modestly to around 1.2890 following the announcement."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Here is what you need to know for Tuesday, July 28:

The US Dollar (USD) traded mostly unchanged on Monday as a temporary pause in hostilities between the United States and Iran reduces demand for safe-haven assets. The US Dollar Index (DXY) traded lower earlier in the session but moved closed to breakeven by the late American afternoon. The war triggered a sharp decline in Oil prices, eased energy-driven inflation concerns, and supported risk-sensitive currencies ahead of a busy week of central bank decisions.

The US Dollar Index (DXY) fell slightly toward 101.40 as investors prepare for the Federal Reserve’s (Fed) two-day monetary-policy meeting. Markets largely expect the Fed to maintain its target range at 3.50%–3.75%, although the possibility of an interest rate increase remains in focus due to persistent inflation concerns.

EUR/USD trades largely unchanged near 1.1370. Investors remain cautious ahead of preliminary second-quarter Gross Domestic Product data from Germany and the Eurozone, alongside Germany’s preliminary July inflation report later in the week.

GBP/USD loses ground near 1.3300. The Pound Sterling remains under pressure ahead of the Bank of England’s policy decision, with the central bank expected to leave interest rates unchanged while continuing to assess inflation risks related to energy prices.

USD/JPY trades lower near 163.70 as the Japanese Yen benefits from falling Oil prices and modest USD weakness. However, the pair remains close to multi-decade highs ahead of the Bank of Japan’s meeting. The BoJ is expected to keep rates unchanged but could signal that additional tightening remains possible if Yen weakness continues to raise inflationary pressure.

AUD/USD rises toward 0.6990 as improving market sentiment supports the risk-sensitive Australian Dollar. Attention turns to Reserve Bank of Australia Governor Michele Bullock’s speech on Tuesday, followed by Australia’s inflation data on Wednesday. Stronger inflation could reinforce expectations that the RBA will maintain a restrictive monetary policy stance.

West Texas Intermediate (WTI) Oil plunges more than 7% to approximately $82.30 per barrel after the US temporarily halted its strikes against Iran and Tehran indicated that it would pause retaliatory attacks while the US suspension remained in place. The developments raised hopes of diplomatic progress and reduced immediate concerns about supply disruptions through the Strait of Hormuz.

Gold advances around 0.7% toward $4,081 despite easing geopolitical tensions. Lower US Treasury yields and uncertainty surrounding this week’s central-bank decisions provide support to the non-yielding precious metal.

On Tuesday, RBA Governor Bullock is scheduled to speak. The US economic calendar will feature the ADP Employment Change four-week average, previously at 16.5K, the May Housing Price Index, expected to rise 0.2% after declining 0.1%, and July Consumer Confidence. Germany’s Bundesbank Monthly Report will also be published.

• EUR/JPY remains trapped below 187.00 after fresh two-day low.
• Flat RSI signals fading momentum despite broader bullish bias.
• Break below 185.35 exposes 185.12/08 SMA confluence.

The EUR/JPY holds firm around 163.70 on Monday as the Japanese Yen strengthens, with investors cautious about opening fresh hawkish bets amid fears of intervention in the foreign exchange market.

EUR/JPY Price Forecast: Technical outlook

The EUR/JPY is range-bound, still capped within 186.00-187.00 over the last three trading days, but it has reached a new two-day low at 186.13, which could pave the way for further downside. 

The Relative Strength Index (RSI), although bullish, turned flat, an indication that neither buyers nor sellers are in control.

If EUR/JPY climbs above 186.50, a potential move towards the 187.00 psychological level is on the cards. Further upside is seen once buyers reclaim the latter, with the July 1990 monthly high at 188.23 in play, before aiming towards 189.00.

On the downside, the EUR/JPY will find support at 185.35, the July 20 low of the day (LOD). A breach of the latter will expose the confluence of the 50- and 100- day Simple Moving Average (SMA) at 185.12/08, followed by the July 13 cycle low of 184.40.

EUR/JPY Price Chart – Daily

Geoff Yu at BNY sees Latin American (LatAm) assets benefiting again from improved terms of trade for energy and soft commodity exporters, with strong real-rate anchors supporting currencies and duration. However, he warns that rising U.S. yields and a less predictable Fed limit carry-trade momentum, keeping hedge ratios high even as some central banks like BanRep remain aggressively hawkish.

Commodity support versus Fed headwinds

"Market apprehension over the wider risk and growth environment should not detract from Latin America’s evident advantages. The initial phase of the conflict generated significant uplift in energy exporters in Q2, and we expect a repeat. As long as the real-rate anchor remains strong, terms-of-trade improvement will be reflected in the currency or duration, with the latter likely preferred by governments that are looking for more fiscal space."

"On a tactical basis, the case for Latin American holdings remains clear, but the carry trade momentum is clearly struggling despite flat positioning. We maintain our view that fixed income offers stronger risk-reward, but hedge ratios will likely remain higher until there is better visibility into the Fed’s intentions. The new challenge is that Kevin Warsh’s Fed may forgo forward guidance by design, necessitating structurally high hedge ratios."

"BanRep [Banco de la República] is expected to hike rates by 50bp to 12.50%, underscoring its status as the world’s most hawkish central bank. Real rates currently stand above 6%, but activity and demand levels remain robust. Retail sales continue to expand by double-digits on an annualized basis, and consumer confidence rebounded strongly in June."

"However, we note that the past week brought significant misses in EM policy decisions. The hitherto hawkish Bank Indonesia and South African Reserve Bank both chose to hold instead of hike, even with upside inflation risk."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• USD/CHF rises for sixth straight session, testing 0.8200 resistance.
• SNB rate expectations keep Swiss Franc fundamentally pressured.
• Break above 0.8215 exposes 0.8250 and 0.8300 next.

The USD/CHF extends its advance for the sixth straight trading session, up 0.11%, as the Greenback holds firm against a basket of six currencies, the US Dollar Index (DXY). At the time of writing, the pair trades at 0.8190, with buyers targeting 0.8200.

USD/CHF Price Forecast: Technical outlook

The Swiss Franc is set to continue to weaken, both technically and fundamentally. Bloomberg, citing sources, reported that the Swiss National Bank (SNB) is expected to keep rates near zero until the end of 2027.

Given the backdrop, the USD/CHF path of least resistance is upwards, and it will face key resistance levels at 0.8200, followed by the June 19, 2025, peak at 0.8215. A breach of the latter will expose the June 4, 2025, peak at 0.8250, followed by the 0.8300 milestone.

Conversely, if sellers push USD/CHF below 0.8150, it could exacerbate a move lower. The first-floor level would be 0.8100. A decisive break exposes the July 15 cycle low of 0.8034, ahead of the 50/day Simple Moving Average (SMA) at 0.8012.

USD/CHF Price Chart – Daily

• Gold climbs as falling Treasury yields offset recovering US Dollar.
• US-Iran pause lifts sentiment, but Fed decision limits conviction.
• Failure near $4,070 risks pullback toward $4,050 support.

Gold price registers gains of 0.58% as Washington pauses attacks on Tehran, while US President Donald Trump opened the door for a resumption in negotiations. This, along with falling US Treasury yields, is a tailwind for Bullion prices with XAU/USD approaching $4,070.

XAU/USD holds gains on lower Treasury yields, Iran de-escalation hopes

Sentiment has improved during the day as news that a Chinese state-backed firm is producing chipmaking machines pushed US equities lower. In the precious metals segment, the yellow metal clings to gains, though XAU/USD is nearly back to the $4,050 area, which could open the door for further downside.

Geopolitics continued to play a role in the financial markets. Over the weekend, the White House paused attacks, adding to the market's positive mood. Also, US President Donald Trump said that Iran wants to meet, and that they’re meeting and added that “there’s a chance we can make a deal with Iran.”

Data in the US revealed that Durable Goods Orders in June improved but fell short of estimates. Nevertheless, traders' eyes are on the Federal Reserve's (Fed) monetary policy decision on Wednesday, followed by a busy economic docket on Thursday.

Money markets had priced in a 60% chance that the US central bank would keep rates unchanged and a slim 40% chance of a 25-basis-point rate hike, according to Prime Terminal data.

On Thursday, the US schedule will feature the release of Gross Domestic Product (GDP) figures for the second quarter, the final print of the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index, and Initial Jobless Claims data.

In the meantime, Bullion prices recovered as US Treasury yields are edging lower. The US 10-year T-note falls 3.5 basis points (bps) to 4.645%. As of writing, the Greenback turned green as depicted by the measure of a basket of six currencies against the American currency, aka the US Dollar Index (DXY).

Oil prices fell 6% to hit a one-week low after the US and Iran paused strikes over the weekend following two weeks of attacks, raising hopes of a diplomatic solution that would de-escalate the conflict and allow shipping to resume in the Strait of Hormuz.

In June, China's net Gold imports through Hong Kong more than doubled from the same month last year but were down by over 5% from May, according to data from Hong Kong's Census and Statistics Department released on Monday.

XAU/USD technical outlook: Gold trades sideways despite posting gains

Gold’s price action projects that some consolidation lies ahead. Momentum, as measured by the Relative Strength Index (RSI), shows some mixed signs. The index remains bearish but closing into the 50 neutral level, which, once pierced, turns bullish.

For a bullish resumption, the XAU/USD must clear the $4,100 mark. Above lies the July 22 daily high at $4,165, which, once surpassed, clears the way toward the July 6 daily peak at $4,202. A breach of the latter exposes the 50-day Simple Moving Average (SMA) at $4,221.

On the downside, the first key support is the daily low of July 24 at $4,022. Beneath are the psychological $4,000 mark, followed by the June 17 daily low of $3,959.

• Silver struggles below the 21-day SMA as prices remain trapped within a $55-$62 range.
• The RSI and MACD indicators point to near-term stabilization as selling pressure eases.
• A break above $62 could expose $65, while a close below $55 would bring $50 into focus.

Silver (XAG/USD) reverses part of its earlier gains on Monday as the US Dollar (USD) rebounds after opening the week with a bearish gap following a temporary pause in attacks between the United States (US) and Iran.

At the time of writing, XAG/USD trades around $58.34, up 0.37% on the day, after briefly climbing above $60 earlier during the Asian trading session.

XAG/USD has traded largely within a $55.00-$62.00 range in recent weeks, with hawkish Federal Reserve (Fed) expectations capping upside attempts.

Could Wednesday’s Fed interest-rate decision trigger Silver’s next directional move?

The US central bank is widely expected to keep rates unchanged at 3.50%-3.75%, although a surprise hike cannot be ruled out. According to the CME FedWatch Tool, traders price in around a 35% chance of an immediate increase.

A surprise rate hike would likely be the most bearish outcome for Silver. Higher interest rates would strengthen the US Dollar and push US Treasury yields higher, increasing the opportunity cost of holding non-yielding assets such as Silver. Such an outcome could trigger a break below the lower end of its recent range at $55.

A hawkish hold could also put the $55 support level at risk if Fed Chair Kevin Warsh emphasises persistent inflation concerns and signals that a rate hike later this year remains likely.

On the other hand, a dovish hold could provide relief for Silver, although it is not the base-case scenario. If the Fed adopts a less hawkish tone than markets expect, traders could scale back rate-hike bets, increasing the chances of a recovery above $62.

Technical analysis

On the daily chart, XAG/USD retains a bearish bias despite showing signs of stabilization. Buyers are struggling near the 21-day Simple Moving Average (SMA) at $58.75.

Momentum shows tentative improvement, as the Relative Strength Index (RSI) recovers toward the mid-40s and the Moving Average Convergence Divergence (MACD) indicator holds in positive territory, hinting that selling pressure is losing intensity rather than that a bullish reversal is underway.

The 21-day SMA at $58.75 offers immediate resistance, followed by $62, the upper boundary of the recent range. A decisive break above this level could expose the 50-day SMA at $65, followed by the 100-day SMA at $70.94.

On the downside, $55 provides initial support. A daily close below this level could open the door toward the psychological $50 mark.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Commerzbank’s Dr. Jörg Krämer argues that high energy prices will continue to weigh on the German economy in the second half of 2026, limiting full-year growth to 0.6%. He notes that the strong Ifo business climate reading partly predates the recent Oil price surge, but still highlights recovery potential if US–Iran tensions ease and the Strait of Hormuz reopens permanently.

High energy costs cap German growth

"The significant increase in the Ifo business climate (86.6 after 85.7) is only of limited significance because most companies answered the survey before the massive oil price increase of the last two weeks. But at least the increase shows the potential for recovery if the US and Iran would reach an agreement and the Strait of Hormuz would be permanently opened. Unfortunately, however, the road to a lasting agreement is likely to be long and bumpy, so that the economy will also suffer from high energy prices in the second half of the year."

"When interpreting the sharp increase, it should be taken into account that companies usually responded to the Ifo survey by the middle of the month. Most companies have therefore not been able to react to the sharp rise in the oil price since then. In this respect, the July reading is likely to exaggerate the actual development, even if the Brent oil price fell by around 10 dollars this morning compared to Friday and is at around 90 dollars."

"Ultimately, the road to an understanding will be long and bumpy, even if Iran has a strong economic incentive to reach an agreement in the end, because Donald Trump has made major concessions (even reconstruction aid) to the regime in the framework agreement."

"All in all, high energy prices are likely to continue to weigh on the German economy in the second half of the year. We continue to expect only a meagre increase of 0.6% for the year as a whole. But at least today's sizeable rise in the Ifo business climate shows the potential for recovery if the US and Iran reach an agreement and the Strait of Hormuz is opened permanently."

"However, because an agreement will take a long time, this is more likely to be an argument for slightly more growth for the coming year (forecast: 1.0%)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• EUR/USD moves back to even on Monday as investors remain cautious ahead of Eurozone growth data.
• Eurozone GDP is expected to grow 0.2% QoQ and 0.4% YoY.
• Germany’s July CPI is expected to rise 0.7% MoM after a 0.3% decline.

EUR/USD trades lower near the 1.1370 area on Monday, surrendering earlier gains as investors remain cautious ahead of key Eurozone growth figures and the Federal Reserve’s (Fed) monetary policy decision.

Improved global risk sentiment follows a pause in hostilities between the United States and Iran, which triggered a sharp decline in Oil prices and a rally across stock and bond markets. West Texas Intermediate (WTI) Oil trades near $83.60 per barrel, falling more than 7% as concerns over supply disruptions ease.

Investors now await preliminary second-quarter Gross Domestic Product data from Germany and the broader Eurozone. Eurozone GDP is expected to expand 0.2% QoQ after contracting 0.2% previously, while annual growth is forecast to accelerate to 0.4% from 0.3%.

Germany’s economy is expected to stagnate quarterly following a 0.3% expansion, although annual GDP growth is projected to rise to 0.6% from 0.4%. Weaker-than-expected figures could reinforce concerns about the region’s economic outlook and place additional pressure on the Euro.

Germany’s preliminary July Consumer Price Index (CPI) will also be closely watched. Monthly inflation is expected to rise 0.7% after declining 0.3%, while annual inflation previously stood at 2.3%. Stronger price pressure could support expectations that the European Central Bank will maintain a restrictive stance, supporting the Euro.

Short-term technical analysis:

On the 4-hour chart, EUR/USD trades at 1.1372, holding a bearish near-term bias as the pair remains capped beneath the 20-period Simple Moving Average (SMA) around 1.1391 and the 100-period SMA near 1.1420. Momentum is subdued with the 14-period Relative Strength Index (RSI) hovering at 41, which suggests weak buying interest and keeps the focus on the downside while the pair stays under this layered moving-average resistance.

On the topside, initial resistance is aligned at 1.1375, followed by 1.1386 and then a denser barrier around 1.1391, where a horizontal level coincides with the 20-period SMA, before the 100-period SMA at 1.1420 comes into play. On the downside, the immediate support is seen at 1.1369; a clear break below this floor would open the door to an extension of the current bearish phase, while holding above it would merely keep the pair in a corrective consolidation beneath the cited resistance cluster.

(The technical analysis of this story was written with the help of an AI tool. Know more.)