Forex News
- Gold extends gains as a weak US NFP report weighs on the US Dollar.
- Softer labor market data prompts markets to delay expectations for a Fed rate hike.
- Technical indicators suggest bullish momentum is gradually rebuilding, with the MACD turning positive and the RSI recovering toward neutral.
Gold (XAU/USD) extends gains on Friday as weaker-than-expected US Nonfarm Payrolls (NFP) data released on Thursday batters the US Dollar (USD) and cools expectations of an imminent Federal Reserve (Fed) interest rate hike.
At the time of writing, XAU/USD is trading around $4,170, up about 1.16% on the day. The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, is trading around 100.76, near two-week lows.
The US economy added just 57K jobs in June, nearly half the market expectation of 110K. Following the data, markets shifted expectations for a Fed interest rate hike from September to December. According to the CME FedWatch Tool, the probability of a September rate hike fell to 53% from the 63% expected before the data release, while the odds for a December hike stand at a still high 76.8%.
The delay in Fed rate hike expectations eases near-term pressure on the non-yielding metal, helping Gold stage a solid rebound from the seven-month low of $3,949 touched on Tuesday and putting it on track for its first weekly gain in five weeks.
Can Gold extend its rebound?
While Gold is showing signs of resilience above the $4,000 mark after correcting nearly 28% from its record high near $5,600 reached in January, further upside is likely to depend on the evolving macroeconomic backdrop.
Oil prices have fallen significantly from the highs seen during the US-Iran war, easing a key source of inflationary pressure. Combined with softer US labor market conditions, this weakens the case for an immediate Fed rate hike.
However, monetary policy is still expected to remain restrictive until inflation shows meaningful progress toward the Fed's 2% target. In that environment, Gold's upside is likely to remain limited unless the Fed clearly adopts a dovish stance.
A hawkish Fed outlook should also support the US Dollar, creating an additional headwind for Gold by making the precious metal more expensive for overseas buyers.
Still, Gold's longer-term outlook remains supported by robust central bank demand. The latest World Gold Council (WGC) data showed central banks added a net 41 tonnes of Gold to their reserves in May.
The Council's Central Bank Gold Reserves Survey 2026, released last month, found that 89% of central bankers expect global Gold reserves to increase over the next 12 months, while a record-high 45% plan to increase their own Gold holdings.
Technical Analysis: Bullish momentum rebuilds as XAU/USD reclaims 20-day SMA
On the daily chart, XAU/USD holds a near-term bullish bias as it retests the 20-day Simple Moving Average (the Bollinger middle band) at roughly $4,156, suggesting dip-buying interest persists.
Price remains well below the Bollinger upper band near $4,371, leaving room for further upside, while the Relative Strength Index around 47 stays just below neutral and the Moving Average Convergence Divergence (MACD) prints in positive territory, hinting that bullish momentum is rebuilding.
On the topside, initial resistance is aligned with the Bollinger upper band at $4,371, where a daily close above would open the door to a stronger extension of the uptrend.
On the downside, immediate support emerges at the 20-day SMA around $4,156, followed by the horizontal floor at $4,000 and the lower Bollinger band near $3,942, levels that together define a broader demand zone that would need to give way to meaningfully undermine the prevailing constructive bias.
(The technical analysis of this story was written with the help of an AI tool.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Commerzbank’s Carsten Fritsch notes that the Gold price has rebounded toward USD 4,200 per ounce after steep second-quarter losses, helped by weaker US labour data and reduced rate hike expectations. He argues the move looks corrective after an excessive prior decline and observes that dips below USD 4,000 have been short-lived, suggesting a potential bottoming process.
Rebound after sharp quarterly losses
"The second quarter has come to an end, which calls for an interim review. The gold price fell by 14%, marking its sharpest quarterly decline in 13 years. The decline for the first half of the year amounted to slightly more than 7%."
"The gold price rose overnight to nearly USD 4,200 per troy ounce. Gold has thus recovered by around USD 200 over the last two days and is on course for its first weekly rise in five weeks."
"Hence, the price reaction in gold appears to be exaggerated in light of interest rate expectations. However, the previous price fall was also significantly steeper than could be explained by changes in interest rate expectations alone."
"Furthermore, the price rise had already started before the labour market data was released. The price rise is therefore also a corrective move following the previous excessive price fall."
"It has also become apparent that price falls below USD 4,000 are short-lived, which suggests that the market is bottoming out. As long as expectations of interest rate rises do not increase significantly again, gold is unlikely to fall any further."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/CAD gains 0.13% on Friday, trading around 1.4200.
- The weaker-than-expected US jobs report reduces expectations for Fed tightening.
- Falling Oil prices continue to weigh on the Canadian Dollar.
USD/CAD trades higher on Friday, rising 0.13% to near 1.4200 at the time of writing. The pair remains supported as persistent weakness in the Canadian Dollar (CAD) outweighs the pressure on the US Dollar (USD) following softer-than-expected US labor market data.
The US Dollar remains under pressure after the United States (US) economy added just 57K Nonfarm Payrolls (NFP) in June, well below market expectations of 110K. In addition, the previous month's reading was revised down to 129K from 172K. The weaker employment report prompted investors to scale back expectations for Federal Reserve (Fed) tightening. According to the CME FedWatch tool, the chance of a September rate hike fell to 53% from 63% before the data release, while the odds of a December hike remain at 76.8%.
However, the downside in USD/CAD is limited by continued weakness in the Canadian Dollar. The commodity-linked currency remains under pressure as lower global Oil prices reduce Canada's terms-of-trade advantage and reinforce expectations that the Bank of Canada (BoC) could maintain a dovish policy stance if disinflation continues.
Domestic data has provided only limited support for the Loonie. Canada's S&P Global Manufacturing Purchasing Managers Index (PMI) edged up to 53 in June from 52.9 in May, pointing to a modest expansion in manufacturing activity. Meanwhile, economists at Wells Fargo believe Canada's labor market is soft but stabilizing, with employment growth remaining below 1% YoY and gains concentrated in full-time jobs. The bank expects these conditions to support the Bank of Canada keeping interest rates on hold for the foreseeable future.
Investors now turn their attention to Canada's employment report, which could provide fresh guidance on the outlook for the Canadian economy and the BoC's next policy decisions.
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.09% | -0.03% | 0.10% | 0.15% | -0.16% | -0.19% | -0.00% | |
| EUR | 0.09% | 0.05% | 0.17% | 0.23% | -0.12% | -0.10% | 0.08% | |
| GBP | 0.03% | -0.05% | 0.11% | 0.18% | -0.18% | -0.15% | 0.04% | |
| JPY | -0.10% | -0.17% | -0.11% | 0.08% | -0.28% | -0.28% | -0.08% | |
| CAD | -0.15% | -0.23% | -0.18% | -0.08% | -0.37% | -0.35% | -0.15% | |
| AUD | 0.16% | 0.12% | 0.18% | 0.28% | 0.37% | 0.02% | 0.22% | |
| NZD | 0.19% | 0.10% | 0.15% | 0.28% | 0.35% | -0.02% | 0.19% | |
| CHF | 0.00% | -0.08% | -0.04% | 0.08% | 0.15% | -0.22% | -0.19% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
- EUR/GBP steadies after a four-day selloff that pushed the cross to a one-year low.
- Fading expectations for another ECB rate hike keep the Euro on the defensive.
- The interest rate differential between the ECB and the BoE is expected to favor the British Pound in the near term.
EUR/GBP trades in a narrow range on Friday, with the Euro (EUR) modestly outperforming the British Pound (GBP) as sellers take a breather following a four-day decline that dragged the cross to a one-year low.
At the time of writing, EUR/GBP is trading around 0.8571 and is on track to post a second consecutive weekly loss.
The recent weakness in the Euro stems from fading prospects of another European Central Bank (ECB) interest rate increase this year, following June Eurozone inflation data that surprised to the downside. Data released earlier this week showed the Harmonized Index of Consumer Prices (HICP) eased to 2.8% YoY in June from 3.2% in May, while Core HICP slowed to 2.4% YoY from 2.6%.
ECB Governing Council member Emmanuel Moulin said on Friday, "We're in a good position," adding that "the balance of risks is in the right place." He also noted that "we made sure not to signal a new hiking cycle."
Deutsche Bank said in a report that the probability of another ECB interest rate hike by September has fallen below 50%, while the odds of a rate increase by December have declined to around 70%.
This reinforces expectations that the interest rate differential between the ECB and the Bank of England (BoE) will remain in place, offering near-term support to the British Pound.
BoE Governor Andrew Bailey said on Wednesday that "rate cuts are off the table at the moment," although he acknowledged that "we've got a softening economy and labour market."
Meanwhile, traders also digested Purchasing Managers Index (PMI) data released earlier on Friday. The HCOB Eurozone Composite PMI rose to 50.0 in June from 48.5 in May, marking a three-month high.
In contrast, the S&P Global UK Composite PMI Output Index fell to 49.3 from 49.7 in May, remaining below the 50.0 threshold for a second consecutive month.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | -0.03% | 0.10% | 0.14% | -0.16% | -0.20% | -0.00% | |
| EUR | 0.10% | 0.06% | 0.18% | 0.23% | -0.12% | -0.10% | 0.09% | |
| GBP | 0.03% | -0.06% | 0.11% | 0.17% | -0.19% | -0.16% | 0.03% | |
| JPY | -0.10% | -0.18% | -0.11% | 0.06% | -0.30% | -0.30% | -0.09% | |
| CAD | -0.14% | -0.23% | -0.17% | -0.06% | -0.36% | -0.35% | -0.14% | |
| AUD | 0.16% | 0.12% | 0.19% | 0.30% | 0.36% | 0.02% | 0.23% | |
| NZD | 0.20% | 0.10% | 0.16% | 0.30% | 0.35% | -0.02% | 0.19% | |
| CHF | 0.00% | -0.09% | -0.03% | 0.09% | 0.14% | -0.23% | -0.19% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Rabobank strategists Bas van Geffen and Lyn Graham-Taylor note that the European Central Bank (ECB) is reportedly considering raising the minimum reserve requirement from 1% to 2%, primarily as a cost-reduction measure. They say this change would roughly offset the additional interest costs of the June rate hike and likely have minimal impact on the policy stance, while affecting Eurozone money market dynamics.
Reserve ratio shift and liquidity effects
"The ECB is reportedly considering raising the minimum reserve requirement from 1% to 2%."
"This seems to be driven by a cost-reduction exercise. The change would roughly offset the additional interest costs of the June rate hike."
"Implications for the policy stance are probably minimal. But increasing the reserve requirement would accelerate the switch from abundant to ample liquidity by 4 to 5 months."
"This could see a further cheapening of repo rates, and it may put further narrowing pressure on short-dated swap spreads."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
MUFG’s Derek Halpenny notes that EUR/USD could benefit from US Dollar weakness and a still-hawkish European Central Bank. Derek Halpenny highlights that LNG prices remain elevated versus pre-conflict levels, keeping Eurozone inflation risks higher. MUFG sees the ECB remaining biased toward further rate hikes as it monitors energy price developments.
LNG prices keep ECB on alert
"The bias will favour further US dollar weakness following the payrolls report but EUR could also be supported by the rates curve maintaining pricing for another hikes as US yields fall back on easing Fed rate hike expectations."
"Inflation risks may have subsided in Europe, but the level of risk remains higher than before the conflict."
"While Brent crude oil has completely reversed the post-conflict surge, LNG prices remain more elevated, at 40% above pre-conflict levels."
"More likely the ECB will be monitoring energy prices and the scale of retracement since the ceasefire extension was agreed and the Strait of Hormuz reopened is not yet enough to eliminate energy-related inflation risks. That will keep the ECB biased toward hiking rates again."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Societe Generale strategists note that South Africa’s National Treasury will tap existing rand-denominated sukuk bonds as part of its current fiscal year funding plans, with issuance size and timing still unknown. They recall South Africa’s 2023 Islamic-debt tap of ZAR20.4bn that drew strong demand, and observes that the Rand benefited from post-NFP Dollar weakness even as USD/ZAR implied volatility rose on protest risks.
Rand supported as sukuk tap looms
"South Africa’s National Treasury will tap existing rand-denominated sukuk bonds as part of its funding plans for the current fiscal year."
"Details on issuance size and timing are not yet known, but South Africa last tapped the Islamic-debt market in 2023, raising ZAR20.4bn ($1.2bn) in an offering that attracted almost twice the targeted amount."
"The rand benefited from the post-NFP decline in the USD, though USD/ZAR overnight implied volatility rose to early-May levels as traders braced for potential violence during countryside anti-immigration protests"
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
ING analysts Warren Patterson and Ewa Manthey say LME Aluminium fell towards $3,000/t as markets unwound the geopolitical risk premium from earlier Middle East tensions. An update from Emirates Global Aluminium showed 7% of pots at Al Taweelah restarted, reinforcing expectations that Gulf supply disruptions are temporary and that lost production will gradually return, easing availability concerns.
EGA restart eases supply fears
"LME aluminium came under renewed pressure yesterday, with the three-month price falling towards $3,000/t as the market continued to unwind the geopolitical risk premium built up during the Middle East conflict."
"Sentiment was weighed down by an update from Emirates Global Aluminium (EGA). It said that around 7% of production pots at its Al Taweelah smelter have been restarted, highlighting steady progress in restoring output following the missile and drone attacks earlier this year."
"The update reinforced expectations that supply disruptions in the Gulf will prove temporary. Concerns over lost Middle Eastern production and shipping disruptions through the Strait of Hormuz helped lift prices sharply earlier this year. But recovering output and easing regional tensions have steadily improved the supply outlook."
"While a significant portion of Al Taweelah's capacity remains offline and a full recovery will still take time, the latest update reinforces expectations that lost supply will gradually return to the market. This is easing concerns over aluminium availability."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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