Forex News

• Soft NFP trims Fed hike bets, weighing on Dollar.
• ISM Services stays expansionary as employment gauge rebounds.
• RBA minutes keep tightening risk alive if inflation persists.

The Australian Dollar extends its rally for three straight trading sessions, up 0.25%, as investors adjust their interest rate expectations for the Federal Reserve, following a soft US jobs report. Consequently, the US Dollar weakened, driving the AUD/USD higher to trade at 0.695 after bouncing off daily lows of 0.6921.

AUD/USD extends rally as Fed bets cool, RBA stays hawkish

Data in the US revealed that business activity in the services sector deteriorated slightly, but remained at expansionary territory. The ISM Services PMI for June came in at 54.0, down from 54.5 but in line with estimates. Within the survey's sub-components, the Prices Index dipped from 71.3 to 67.7, while the Employment Index improved from 47.9 to 51.2.

Fed Waller remains hawkish as US jobs data dissapoints

The data paints a resilient US economy, but last week’s softer-than-expected June NFP print triggered a reaction from investors, decreasing hawkish bets. Despite this, Fed Governor Christopher Waller was hawkish, saying that policymakers are always committed to 2% inflation and that risks have flipped as the labour market stabilises while inflation is taking off.

Ahead in the week, traders are waiting for the Fed’s last meeting minutes, the first led by the new Fed Chair Kevin Warsh, eyeing clues about the path of interest rates. Alongside this, Initial Jobless Claims for the week ending July 4 are also awaited.

RBA minutes don’t disregard rate hikes

In Australia, the RBA’s last meeting minutes revealed that a pause was needed to assess the effect of the previous rate hikes. However, they acknowledged that holding rates provided the best balance to attain inflation and employment objectives. Despite this, the board remains committed to achieving price stability, including increasing rates if necessary.

Consequently, the hawkish tilt by the RBA capped some of the AUD/USD initial losses. This week, the economic calendar is light, as traders will eye the release of Westpac Consumer Confidence for July on July 13, followed by the update of Consumer Inflation Expectations for the same period.

AUD/USD Price Forecast: Technical outlook

In the daily chart, AUD/USD trades at 0.6955. The pair retains a bearish near-term bias as spot holds below the cluster of simple moving averages (50-, 100- and 200-day SMA) grouped around 0.7091 and under several previously respected upward trend-line levels, indicating that former structural supports have turned into overhead supply. The Relative Strength Index (14) at about 43 leans weak, suggesting downside pressure persists even as the latest slide shows a modest loss of momentum rather than a sharp capitulation.

On the topside, initial resistance emerges near the broken long-term trend-line area around 0.7002, with a denser cap formed by the overlapping former trend-line supports and the SMA cluster between roughly 0.7086 and 0.7111, which would need to be reclaimed to ease the current bearish tone. With no clearly defined structural floors immediately below current prices in the provided dataset, any further decline would leave AUD/USD vulnerable to discovering fresh demand at lower levels, keeping risks tilted to the downside while it trades beneath the cited resistance band.

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

BNY’s Geoff Yu stresses that Chinese equities and Chinese Yuan (CNY) remain heavily under-owned versus APAC (Asia-Pacific) peers, with cross-border holdings at very low levels. While fundamentals are still not compelling, he argues that retail flows, a base in ownership and rising stimulus talk mean that any stabilization in data or credible policy support could trigger a meaningful rebuild in exposure to China.

China de-risked across asset classes

"CNY is also the worst-held APAC currency, yet flows are no longer showing aggressive selling."

"China has effectively been de-risked across equities, FX and fixed income."

"The fundamental case is not yet clean: data, earnings and policy follow-through still need to improve."

"But the positioning setup is becoming more compelling."

"If fundamentals stabilize or credible policy support emerges, even a modest rebuild in exposure to China could create a meaningful re-entry opportunity from very depressed ownership levels."

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

Societe Generale’s Kunal Kundu analyzes Indonesia’s May 2026 trade data, highlighting the first deficit since the pandemic and a record Oil and Gas shortfall. He notes weaker exports, strong imports and a narrowing external cushion, but also stresses that cumulative exports and downstream Nickel-related shipments remain supportive, leaving open whether this marks a temporary interruption or a more persistent deterioration.

Deficit tests external resilience narrative

"This suggests that part of the import strength may reflect ongoing industrial production, investment activity, and downstreaming efforts. The critical question is whether subsequent economic activity validates that interpretation."

"If global commodity prices weaken further, or if demand from major destinations such as China, the US, and India softens, Indonesia’s non-oil and gas surplus could come under additional strain. The concern is therefore not merely the May deficit itself, but whether it signals a narrowing margin of safety in the broader trade account."

"The key question for the coming months is whether May proves to be a temporary interruption in Indonesia’s surplus trend or the beginning of a more persistent deterioration. If energy imports stay elevated while major commodity exports fail to recover, the trade balance could become a more material macro risk."

"But if downstream exports continue to scale and capital-goods imports translate into future productive capacity, the May deficit may ultimately be seen as a manageable cost of economic transformation rather than a sign of lasting external weakness."

"Indonesia’s May 2026 trade data mark an important inflection point for the external sector. The country recorded a $1.61 bn trade deficit, reversing from a $89 mn surplus in April and ending a 72-month run of monthly trade surpluses that had been in place since May 2020."

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

• NZD/USD remains under pressure as the US Dollar stays supported.
• Waller reinforced the Fed’s 2% inflation commitment, saying the pledge remains credible.
• US ISM Services PMI held firm at 54.0, with employment improving sharply.

NZD/USD trades under pressure near the 0.5700 level as the US Dollar (USD) remains supported by hawkish-leaning comments from Federal Reserve (Fed) Governor Christopher Waller and resilient United States (US) services data.

Waller said Fed policymakers remain committed to the 2% inflation target, calling it a credible pledge. He added that risks have “flipped around,” with the labor market appearing stabilized while inflation has been “taking off,” which changes how policymakers think about monetary policy.

The Fed official also stressed that the central bank will not keep rates low to help the US government finance its deficits. He said he would prefer the inflation target to be set as a range, but warned that changing the target at this point would not be credible.

US data also kept the Greenback supported. The ISM Services PMI receded to 54.0 in June, matching expectations, while the Employment Index improved sharply higher to 51.2 from 47.9. However, New Orders eased to 55.1, and Prices Paid fell to 67.7, suggesting that both demand and cost pressure cooled but remained elevated.

Short-term technical analysis:

On the four-hour chart, NZD/USD trades at 0.5705. The pair holds a neutral-to-slightly-bullish tone as it trades above the 20-period Simple Moving Average (SMA) at 0.5693 but remains capped by the 100-period SMA at 0.5717 overhead. This configuration suggests a consolidative bias within a shallow recovery phase, while the Relative Strength Index (RSI) around 58 hints at steady, but not overextended, bullish momentum.

After selling off overnight, the American session witnessed a recovery in the New Zealand Dollar, although the pair remains lower for Monday overall.

On the topside, initial resistance is aligned at the 100-period SMA near 0.5717, with broader bullish traction likely facing stronger hurdles at 0.5907, followed by 0.5930 and 0.5965. On the downside, immediate support is seen at 0.5702, backed by a nearby band at 0.5697 and the 20-period SMA and horizontal level clustered around 0.5693, ahead of a lower cushion at 0.5684.

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

• ISM Services slows, but employment gauge returns to expansion.
• Fed hike bets cool after weaker payrolls and revisions.
• FOMC minutes, jobless claims and CPI guide next move.

Gold (XAU/USD) price retreats by some 0.50% on Monday as the Greenback remains steady despite traders repricing a less hawkish Federal Reserve (Fed) following last Thursday’s softer-than-expected jobs report. The XAU/USD pair trades at $4,153, down 0.50%.

XAU/USD retreats as steady Dollar and yields cap recovery

Data from the US showed that business activity in the services sector was modestly softer than expected, with the ISM Services PMI dipping from 54.5 to 54. Even though the data indicated a slowdown, the Employment Index improved, while a measure of producer prices slowed from 71.3 to 67.7.

Monday’s data outweighed June’s Nonfarm Payrolls report, which fell short of expectations, and the April and May data, revised lower, an indication of further deterioration.

Traders? trimmed Fed hawkish bets. As of writing, they are expecting an 88% chance of a rate hike at the December meeting, as they priced in 22 basis points of tightening.

For the July meeting, money markets expect the Fed to hold rates unchanged, with odds at 77%, according to Prime Terminal data.

Bullion weighed by high US yields, strong US Dollar

In the meantime, the US Dollar Index (DXY), which tracks the buck’s value against six currencies, is up 0.03% at 100.90, a headwind for the non-yielding metal. Also, US Treasury yields are steady, with the 10-year benchmark note yielding 4.451%, unchanged.

Geopolitics had fallen to the background as the second round of talks between the US and Iran in Islamabad was set to start next Saturday. Remaining issues include Iran’s nuclear program, frozen assets, the Strait of Hormuz, and Lebanon.

Aside from this, the US economic docket will feature the Fed’s last meeting minutes, followed by Initial Jobless Claims for the week ending July 4, as traders brace for July 14 Consumer Price Index (CPI) figures.

XAU/USD technical outlook: Gold stays bearish, fails to clear $4,200

Gold price downtrend is intact as long as XAU fails to clear a downtrend-resistance trendline at around $4,200-$4,225. Additionally, a 'death-cross' has formed on the daily chart, suggesting sellers have overtaken buyers and opening the door to further losses.

The Relative Strength Index (RSI) is bearish, despite aiming towards its 50-neutral level. However, during the last two trading sessions, it opened the door for further downside.

If XAU/USD drops below $4,200, the next support would be the psychological $4,100, before testing $4,000 and the year-to-date (YTD) low at $3,941.

For a bullish reversal, Gold needs to decisively clear $4,250 before testing $4,300. Overhead lies the 50-day Simple Moving Average (SMA) at $4,391, followed by the 200-day SMA at $4,488, ahead of $4,500.

• US Dollar trims intraday gains as traders reassess the Fed's monetary policy outlook.
• Weaker-than-expected US jobs data and easing Oil prices temper expectations of a near-term Fed rate hike.
• Traders look to FOMC minutes for fresh guidance on interest rates.

The US Dollar Index (DXY) trims its gains on Monday after opening the week on a firmer note, as traders await greater clarity on the Federal Reserve's (Fed) interest rate path before placing fresh directional bets. At the time of writing, the index, which tracks the US Dollar against a basket of six major currencies, is trading around 100.92 after easing from an intraday high of 101.14.

The Fed is unlikely to raise interest rates anytime soon after Thursday's weaker-than-expected US Nonfarm Payrolls (NFP) report. At the same time, Oil prices have fully unwound their US-Iran war-driven rally as shipping through the Strait of Hormuz continues to improve following last month's interim peace agreement between the United States and Iran.

Lower Oil prices have eased inflation risks, suggesting the Fed may not need to tighten monetary policy as aggressively as markets had previously feared.

Even so, with inflation still running above the Fed's 2% target, policymakers remain committed to bringing inflation back to target, suggesting monetary policy is likely to remain restrictive for the time being.

According to the CME FedWatch Tool, traders are pricing in a 77% probability that the Fed will keep interest rates unchanged at this month's meeting, while the probability of a rate hike at the September meeting has fallen to 56% from 63% before the US jobs report was released.

Meanwhile, the United States and Iran have yet to reach a final agreement. Key sticking points include the future management of the Strait of Hormuz, the release of frozen Iranian assets, sanctions relief, and Tehran's commitments regarding its nuclear program.

With geopolitical risks lingering and traders still pricing in at least one Fed rate hike this year, further downside in the US Dollar is likely to remain limited.

On the data front, the ISM Services Purchasing Managers Index (PMI) came in at 54 in June, in line with market expectations. Although the reading eased from 54.5 in May, it marked the 23rd consecutive month of expansion.

The US economic calendar is relatively light this week, with the ADP Employment Change report due on Tuesday and weekly Initial Jobless Claims on Thursday. Investors will also closely watch the Federal Open Market Committee (FOMC) meeting minutes on Wednesday for fresh clues on the Fed's monetary policy outlook.

• WTI has round-tripped the entire war premium and now sits just above its February base.
• OPEC+ lifted quotas again for August while actual Gulf output is still catching up.
• The Brent curve's slip into contango frames Wednesday's EIA inventory data as the week's main test.

West Texas Intermediate (WTI) has spent three weeks handing back what the war spent three months building, and the tape now reads as though February never ended. The US benchmark drifts near $68.50 while Brent hovers close to $72.00, both a couple of dollars above their pre-war bases and nearly 40% below the March extremes.

The candles have been shrinking for a week and the ranges with them, which tells you the momentum did not fade so much as leave with the risk premium. The June 17 interim agreement between Washington and Tehran reopened the Strait of Hormuz to normal traffic, the fear trade was carried out of the building, and what remains is a market forced to price ordinary supply and demand for the first time this year. It does not appear thrilled by the exercise.

The differential says the war trade is closed

Brent's premium over WTI has settled near $3.50, which is plain freight-and-quality territory rather than anything resembling a risk premium. Seaborne barrels carried the fear through the war, and that gap has now compressed back to the boring arithmetic of pipelines versus tankers. Nobody is paying extra for Brent's postcode anymore, and the differential is the cleanest single gauge that the geopolitical bid has been fully extracted.

Everyone is selling into the reunion

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively OPEC+, agreed on Sunday to add another 188K barrels per day (bpd) to August quotas, the latest step in restoring 940K bpd of paper supply since the war began. Actual output still lags the paperwork, with the biggest Gulf producers having lost around 6 million bpd at the worst of the closure, though flows have been recovering since the June agreement. The United Arab Emirates has meanwhile walked away from the quota system altogether, Washington is still working through a 172 million barrel release from the Strategic Petroleum Reserve (SPR) agreed during the war, and US production set a record near 14 million bpd in May.

The curve said the quiet part

The Brent futures curve tipped into contango last week for the first time this year, with the six-month spread near minus 56 cents; when the market pays you to store barrels, it is telling you it has too many of them. OPEC's own monthly report has trimmed 2026 demand growth in back-to-back months, to under 1 million bpd, so the supply wave is arriving into a shrinking demand forecast. Strategists have begun sketching Brent into the 60s by year-end, and for once the futures market is not arguing with them.

Wednesday brings the receipts

Weekly inventory data from the Energy Information Administration (EIA) lands Wednesday at 14:30 GMT, the first clean read on stockpiles since Hormuz traffic began normalizing, after industry figures Tuesday evening. Minutes from the June Federal Open Market Committee (FOMC) meeting arrive the same day at 18:00 GMT; a hawkish Federal Reserve (Fed) keeps the Dollar bid, and Dollar-priced barrels do not enjoy that. OPEC+ ministers reconvene on August 2, where a compensation-hungry Iraq is already agitating for a bigger quota.

Levels to watch

Resistance: WTI's first hurdle is the $70.00 handle, with the June breakdown shelf near $72.00 behind it; Brent faces the same test at $74.00. Reclaiming those levels on a daily close is the minimum before anyone argues the flush is finished.

Support: Initial demand sits close to $67.50 for WTI and around $71.00 for Brent, the floors of the past week's drift. Below there, $65.00 is the only round figure of note before the February bases near $62.00 for WTI and $66.50 for Brent, where this entire journey started.

Bias: Bearish. The Stochastic Relative Strength Index (Stoch RSI) has been pinned near its floor for two weeks while price keeps leaking, and oversold in a downtrend is a description, not a buy signal. With quotas rising, the reserve draining, and the curve paying for storage, rallies toward $70.00 are for selling; only a daily close back above $72.00 changes the conversation, while a break of $67.50 puts the February base on the table.

WTI daily chart

Brent daily chart

Rabobank’s FX Strategy team discusses the New Zealand Dollar (NZD) ahead of the July 8 Reserve Bank of New Zealand (RBNZ) meeting, where consensus and the bank expect a 25 bp hike to 2.5%. They note mixed views from the NZ (New Zealand) shadow board, moderating inflation as Oil falls, and a fragile domestic recovery. With nearly four hikes priced, Rabobank sees limited NZD upside and expects choppy NZD/USD ranges.

RBNZ path, inflation and NZD pricing

"In line with Rabobank’s view, the consensus of the Bloomberg survey points to a 25 bp rate hike, which would take the main policy rate to 2.5%. Forecasters, however, are not unanimous."

"This news has clearly fanned some doubts in the market about the resolve to the RBNZ to tighten policy and has consequently weighed on the NZD. Today the NZD is positioned second to last on the G10 one day performance table, just above the JPY."

"In view of the inflationary impact of this year’s closure of the Strait of Hormuz, RBNZ Governor Breman stated after the last RBNZ policy meeting in May that the central bank expects to “increase interest rates this year, to help keep a lid on inflation”. That said, oil prices have come down substantially in the wake of the June 17 signing of the MoU by the US and Iran to levels last seen just before the start of the war."

"Currently, market implied interest rates suggest scope for almost four 25 bps rate hikes from the RBNZ over the next year to around 3.18%, from 2.25% currently. This is not so dissimilar to the forecasts from the NZ shadow Board, whose views are centred around rates reaching 3-3.25% over the next year."

"With so much tightening already in the price, we don’t see much scope for the NZD to improve its position on the G10 performance table this year. Indeed, any sign that the RBNZ is backing down on its hawkish tone, could leave the NZD vulnerable."

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

• DJIA set a fresh record high at Monday's opening bell and handed most of it back within the hour.
• The index lagged the S&P 500 and Nasdaq as chip stocks rebounded and last week's rotation ran in reverse.
• FOMC Minutes on Wednesday will show how seriously the committee is weighing a hike.

The Dow Jones Industrial Average (DJIA) finally crossed 53,000 on Monday, spiking to a record just above the handle in the opening minutes and holding it for roughly the length of the ceremony that produced it. President Trump rang the opening bell from the Oval Office in a first-of-its-kind joint event with both major exchanges. The index celebrated by tagging fresh all-time highs, and sellers removed close to 400 points inside half an hour.

By early afternoon in New York the Dow sat flat near 52,900 while the S&P 500 added 0.7% and the Nasdaq rose 1.1%. The fade and the lag share one explanation: Monday was a technology session, and the Dow's march into record territory was never a technology story.

Leadership on loan

The index climbed nearly 2% last week while the benchmark semiconductor fund shed more than 3% for its second straight losing week, as money rotated out of the chip trade into nearly everything else. On Monday the flow reversed, with chips bouncing roughly 3% on an expanded Broadcom supply deal with Apple, leaving the Dow holding a record it lacked the energy to extend.

Strategists frame the second half as a tug-of-war between the artificial intelligence trade and the broader market. The Dow sits on the broader-market side of that argument, which makes Monday's record both real and conditional.

Records with a hawkish soundtrack

The genuinely strange part of this rally is that it is happening while the market debates whether the next move from the Federal Reserve (Fed) is a hike, not a cut. Thursday's June Nonfarm Payrolls (NFP) report printed 57K against expectations above 100K, paring the hike chatter and letting stagflation worries fade into the long weekend.

Monday's Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI) pushed back: the headline matched consensus at 54, but the employment gauge returned to expansion at 51.2 after months of contraction, and prices paid eased to 67.7, still miles above the growth threshold. A Fed governor's afternoon remarks leaned firmly hawkish and the tape barely blinked. Rate markets still assign roughly three-in-four odds to a hold at this month's meeting, with the residual risk tilted toward tightening rather than relief.

Housekeeping among the components

Microsoft, one of the index's heavyweights, slipped more than 1% after announcing 4.8K job cuts, about 2% of its workforce, with the Xbox unit absorbing an outsized share. Management framed the reductions as adapting to the artificial intelligence era, a polite way of saying the spending has to come from somewhere. Fellow component IBM went the other way as analysts lifted price expectations into its results later this month, a reminder that earnings will soon judge whether this record ages well.

Wednesday is the only date that counts

The calendar stays second-tier until Minutes from the June Federal Open Market Committee (FOMC) meeting land at 18:00 GMT on Wednesday. The committee held at 3.75% last month with an unmistakably hawkish lean, and updated projections showed a visible bloc open to tightening again this year; the Minutes will reveal how broad that appetite runs. Around it, a private payrolls update arrives Tuesday at 12:15 GMT, weekly jobless claims follow Thursday at 12:30 GMT with consensus near 220K against 215K prior, and the New York Fed president speaks later that day.

Levels to watch

Resistance: The 53,000 handle is the number that matters, with Monday's record just above it near 53,050. Acceptance above the handle on a daily close turns the milestone from a headline into a floor.

Support: Initial demand rests around 52,750, the shelf that absorbed the morning washout, with Monday's spike low close to 52,650 beneath it and the round 52,500 area below that.

Bias: Bullish. The record fade was a rotation story rather than a rejection; buyers repaired most of a 400-point flush within two hours, and the uptrend off the April base near 45,000 is not in question. A hawkish shock in Wednesday's Minutes is the one item with the weight to change that; absent it, the path of least resistance still runs through 53,000.

Dow Jones daily chart

• Gold falls as the US Dollar rebounds at the start of the week.
• Weak US NFP data and easing Oil-driven inflation concerns reduce expectations of a near-term Fed rate hike.
• The technical picture remains neutral above the $4,000 support level.

Gold (XAU/USD) consolidates losses on Monday as a firmer US Dollar (USD) and mild profit-taking cap gains following last week's rebound from a more than seven-month low of $3,941. At the time of writing, XAU/USD trades around $4,150 after briefly climbing above the $4,200 level during the Asian trading session.

Despite the intraday pullback, the near-term downside in Gold appears limited after weaker-than-expected US Nonfarm Payrolls (NFP) data released on Thursday reduced expectations of an immediate Federal Reserve (Fed) interest rate hike.

Meanwhile, Oil-driven inflation risks are also easing as shipping through the Strait of Hormuz continues to improve following last month's signature of a 60-day Memorandum of Understanding (MoU) between the United States and Iran. This suggests the Fed may not need to tighten policy as aggressively as markets had previously expected.

However, monetary policy is expected to remain restrictive until inflation shows clearer signs of cooling. Traders are currently pricing in a 56% probability of a rate increase at the September meeting, according to the CME FedWatch Tool.

Fed Governor Christopher Waller said on Monday that policymakers "have always been committed to 2% inflation, and it is a credible pledge," but added that "the exact inflation target is too extreme a standard."

The US and Iran have yet to reach a final agreement, with the future management of the Strait of Hormuz emerging as a key sticking point. Tehran views the strategic waterway as falling within its sovereignty and seeks to impose transit tolls. The next round of talks is expected to resume later this week following the funeral of Iran's Supreme Leader.

With geopolitical risks still in play and expectations that the Fed will keep borrowing costs elevated, the US Dollar continues to attract buyers. The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trades around 100.00, up 0.10% on the day.

A stronger US Dollar makes Gold more expensive for holders of other currencies, while higher interest rates diminish the appeal of the non-yielding asset.

Looking ahead, the US economic calendar remains relatively light this week. The ISM Services PMI came in at 54.0 in June, in line with expectations and marking the 23rd straight month of expansion, although the reading edged down from 54.5 in May.

Traders now turn their attention to ADP Employment Change (4-week average) on Tuesday, the FOMC meeting minutes on Wednesday, and weekly Initial Jobless Claims on Thursday.

These reports could offer fresh clues about the Fed's next move and influence the direction of the US Dollar and Gold.

Technical analysis: XAU/USD holds above $4,000, upside remains limited

On the daily chart, XAU/USD is hovering just under the 20-day Simple Moving Average (SMA) from the Bollinger Bands at roughly $4,146.96, keeping the immediate topside capped

The Relative Strength Index (RSI) around 46 hints at subdued directional conviction, while the Moving Average Convergence Divergence (MACD) holds in positive territory, suggesting that upside attempts remain possible but not yet decisive.

On the downside, immediate support is seen at the Bollinger SMA pivot around $4,147, followed by the horizontal support at $4,000. A break below that level could expose the lower Bollinger Band near $3,948.

On the topside, a clear break of the upper Bollinger band near $4,347 would be needed to re-open the path for a stronger recovery, with a daily close above that zone likely to tilt the bias back in favor of the bulls.

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