Forex News
- US Dollar Index may test the initial barrier at the nine-day EMA of 101.14.
- The FXS Fed Sentiment Index at 147.58 signals ongoing policy support for a stronger US Dollar Index.
- The DXY may find primary support at the 50-day EMA at 100.54.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is gaining ground after two days of losses and trading around 101.00 during the European hours on Thursday. The DXY is holding a mildly bullish near-term bias as it stays above the 50-day Exponential Moving Average (EMA). However, the advance is capped in the short run by the nine-day EMA.
The 14-day Relative Strength Index (RSI) around 51 suggests balanced but slightly positive momentum, while the elevated FXS Fed Sentiment Index at 147.58 hints that policy expectations remain supportive for the dollar, even as price consolidates just beneath near-term resistance. However, the technical analysis of the daily chart indicates that the dollar index is trading slightly below the ascending channel pattern, suggesting a potential for a bearish reversal.
The US Dollar Index would find the immediate barrier at the nine-day EMA of 101.14. A rebound within the ascending channel would reinforce the bullish bias and support the dollar index to test the 14-month high of 101.80, which was recorded on June 24, followed by the upper boundary of the channel around 103.60.
On the downside, the primary support lies at the 50-day EMA at 100.54. Further declines would cause the bearish emergence and put downward pressure on the US Dollar Index to navigate the region around a nearly five-month low of 97.62, recorded on May 6.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact 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 when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
MUFG's Derek Halpenny notes that the British Pound (GBP) has been the strongest G10 currency after the US Dollar (USD) since the Middle East conflict began, with attention now on the Bank of England’s (BoE) July decision. Halpenny expects the BoE to stay on hold but sees inflation and energy risks keeping rate hike pricing intact, supporting GBP as FX volatility remains remarkably low and market conditions favourable.
BoE on hold but risks tilted higher
"The pound remains the top performing G10 currency after the US dollar since the conflict in the Middle East began at the end of February and following the FOMC decision last night, the focus shifts today to the BoE policy decision."
"There is nothing priced for today and hence the issue for the markets will be the vote, the communication in the statement, the minutes and the updated forecasts in the Monetary Policy Report. So there’s a lot of information to get through but ultimately the take-away is likely to be that the MPC remains somewhat divided with some concerned over inflation pass-through from energy and others less concerned given the relatively weak domestic economic conditions."
"A September hike is priced at a little over 50% while a hike is fully priced by November, so the rates market is more priced for some signs of increased concerns shifting the MPC toward a hike."
"For market rates to move higher and the pound to advance in response to today’s meeting we will need to see increased conviction on a September rate hike. We expect the multi-scenario approach to be abandoned with a return to a single set of forecasts but accompanied with some risks."
"We expect the pound to remain well supported at these levels on the assumption that pricing for a September rate hike holds up given the rising external inflation risks."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- AUD/USD struggles to attract any meaningful buyers amid a goodish pickup in USD demand.
- Escalating US-Iran tensions and Fed rate hike bets support USD ahead of the crucial macro data.
- Reduced bets for an immediate RBA rate hike undermine the Aussie and favor bearish traders.
The AUD/USD pair struggles to capitalize on the previous day's late rebound from the 0.6920 region, or an over two-week low, and seesaws between tepid gains/minor losses through the early European session on Thursday. Spot prices currently trade just above mid-0.6900s, nearly unchanged for the day, though the near-term bias seems tilted in favor of bearish traders.
The US Dollar (USD) recovers from a one-week low, touched in the aftermath of the FOMC decision on Wednesday, and is seen as a key factor acting as a headwind for the AUD/USD pair. The rapidly changing inflation dynamics due to volatile oil prices keep US Federal Reserve (Fed) rate hike bets firmly on the table. This, along with a further escalation of tensions between the US and Iran, helps revive demand for the safe-haven Greenback.
In the latest development, the US launched strikes against Iran in response to surprise Iranian missile attacks on American forces based in the Middle East on Tuesday. This comes on top of joint US-Saudi strikes against Iran-aligned terrorists in Iraq and raises the risk of a broader regional conflict. Moreover, reports suggest that Iran-backed Houthis in Yemen are considering imposing fees on commercial ships sailing through the southern Red Sea.
Adding to this, the US-Iran standoff over the Strait of Hormuz adds to concerns about significant disruptions to global energy supplies and continues to support crude oil prices. This, in turn, fuels worries about energy-driven inflation and backs the case for policy tightening by the Fed, which favors USD bulls and should continue to cap the AUD/USD pair amid reduced bets for an immediate rate hike by the Reserve Bank of Australia (RBA).
Traders now look to the US economic docket – featuring the release of the Advance Q2 GDP and the Personal Consumption Expenditures (PCE) Price Index. The crucial data would influence market expectations about the Fed's policy path, which, in turn, will drive the USD demand. Apart from this, the incoming geopolitical headlines should infuse volatility in financial markets and provide some meaningful impetus to the AUD/USD pair.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.27% | 0.23% | 0.16% | 0.11% | 0.06% | -0.18% | 0.40% | |
| EUR | -0.27% | -0.05% | -0.11% | -0.17% | -0.23% | -0.46% | 0.13% | |
| GBP | -0.23% | 0.05% | -0.04% | -0.12% | -0.17% | -0.41% | 0.22% | |
| JPY | -0.16% | 0.11% | 0.04% | -0.07% | -0.10% | -0.36% | 0.27% | |
| CAD | -0.11% | 0.17% | 0.12% | 0.07% | -0.04% | -0.29% | 0.33% | |
| AUD | -0.06% | 0.23% | 0.17% | 0.10% | 0.04% | -0.22% | 0.35% | |
| NZD | 0.18% | 0.46% | 0.41% | 0.36% | 0.29% | 0.22% | 0.65% | |
| CHF | -0.40% | -0.13% | -0.22% | -0.27% | -0.33% | -0.35% | -0.65% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Deutsche Bank notes that the Federal Reserve’s (Fed) on-hold decision and limited detail from Chair Warsh sparked a sharp steepening in the Treasury curve, pushing the 30-year yield to 5.20% and weighing on equities. The S&P 500 suffered its worst day in seven weeks, while tech weakness dragged the NASDAQ 100 into correction territory. Asian and European equity performance is mixed.
Fed decision and yields hit stocks
"Last night’s on-hold Fed decision combined with a relative lack of detail from Chair Warsh triggered a sharp steepening in the Treasury curve, with the 30yr yield (+11.2bps) reaching a post-2007 high of 5.20% while a late sell-off left the S&P 500 (-1.52%) posting its worst day in seven weeks."
"This rise in yields ended up weighing on equities after some big intra-day swings. The S&P 500 went from trading more than half a percent down pre-FOMC to higher on the day during Warsh’s press conference but then saw a sharp drop in the final hour of trading to close -1.52% lower."
"Equities were also weighed down by another rout in chip stocks, with the Philly semiconductor index slumping by -5.33%. The tech declines also brought the NASDAQ 100 (-2.06%) into technical correction territory with the index now down -11.3% from its early June peak."
"European equities were mostly weaker, with the Stoxx 600 (-0.29%), CAC (-0.60%) and FTSEMIB (-0.49%) all lower, though the UK’s FTSE 100 advanced (+0.34%)."
"However, the equity mood is mixed across Asia this morning. The Nikkei (+0.75%) is recovering after declines over the previous two sessions, but the KOSPI (-1.30%) is moving lower following on yesterday’s steep -5.98% decline. Korea’s index had climbed as much as +5.50% early in today’s session before giving up the gains, with index heavyweight Samsung down about -2% after its Q2 earnings, which included a more than 250-fold year-on-year rise in semiconductor profits."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- WTI Oil appreciates to levels above $84.00 after bouncing off the $77.16 lows earlier this week.
- Crude prices have rallied about 7% since the US and Iran resumed hostilities on Wednesday.
- EIA reported a larger-than-expected draw in Oil reserves, increasing concerns about a Crude shortage.
Oil prices have risen about 7% over the last two days, pushing the price of the US benchmark West Texas Intermediate (WTI) barrel to levels above $84.00 on Thursday, up from the $77.16 lows seen earlier in the week. The resumption of hostilities in the Middle East and a serious threat that the war might spill over the region are adding a risk premium to Crude prices.
The US military announced a new round of strikes on Iran on Wednesday, which would end a three-day truce, and crush investors’ hopes of a negotiated outcome that had allowed for a $12 drop in Oil prices.
These strikes follow comments by US President Donald Trump vowing retaliation after a US-owned gas storage tanker was hit by a drone while anchored at Egypt's port of Damietta. Before that, Iran had fired missiles at a US military base in Jordan, and the US and Saudi Arabilia launched a coordinated attack on Iran-backed Shiite militias in Iraq.
US Oil reserves decline beyond expectations
Meanwhile, global Oil reserves keep depleting, with the key Strait of Hormuz crossed. Data from the US Energy Information Administration (EIA) released on Wednesday revealed that US commercial Oil inventories declined by 7.167 million barrels in the week ending July 24, well beyond the 2.5 million draw expected by the market, and largely offsetting the 2.01 million barrels buildup seen in the previous week. These figures add concerns of an Oil shortage and contribute to pushing prices higher.
According to TD Securities, the “return of Iranian-US strikes after a multi-day pause, along with continued Houthi risks for Saudi energy infrastructure, are keeping flows in both the Strait of Hormuz and Bab el-Mandeb heavily constrained.” Strategists argue that markets have given up on hopes of renewed peace, considering Iran's insistence on controlling the Strait and see ongoing disruptions leading to “reduced flows and global tightening of the energy market as supportive of further upside in crude oil.”
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.
- The Indian Rupee corrects against the US Dollar as US bond yields surge.
- The Fed left interest rates steady and warned of upside inflation risks.
- Oil prices will likely remain higher amid escalating US-Iran war.
The Indian Rupee (INR) drops against the US Dollar (USD) on Thursday. The USD/INR pair edges down to near 95.60, with the Indian currency facing a tough fight against higher United States (US) Treasury Yields.
In the Asian session, 10-year US Treasury Yields are 1.8% higher at around 4.71%, the highest level seen in 18 months. Higher US bond yields diminish the appeal of risk-sensitive currencies.
The US Dollar has also attracted some bids in the early session on Thursday after a significant fall the previous day, following the Federal Reserve’s (Fed) monetary policy announcement. At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.12% higher to near 100.93.
Upside US inflation risks boost Treasury Yields
In the monetary policy announcement on Wednesday, the Fed decided to leave interest rates unchanged in the range of 3.50%-3.75% for the fifth meeting in a row. The decision was expected to be a hold at a time when a resurgence in oil prices due to escalating Middle East conflicts has de-anchored inflation projections again.
The meeting was also under political pressure, as US President Donald Trump has criticized the Fed several times for not reducing interest rates. Before the meeting, Trump said Fed Chairman Kevin Warsh wanted to lower interest rates, adding that there was a good inflation report recently, costs were falling rapidly, and prices should drop significantly once the Gulf War ends.
In the monetary policy statement and the press conference, Fed Chair Warsh stressed several times bringing inflation down, and clarified that the central bank won’t hesitate to act if needed.
US bond yields are surging on expectations that the Fed needs to raise interest rates anytime this year to achieve price stability.
We think the market is ultimately telling us (and Warsh) that talk is cheap with the combination of these moves, and that it is not enough to just say and proclaim that price stability is paramount," MUFG Bank said in a note, Reuters reported. They added, "In other words, the Fed has to eventually walk the talk on inflation under this new regime."
Middle East tensions keep key oil shipping lanes constrained
Oil prices traded lower in the early trade on Thursday even as military aggression between the US and Iran continues. Earlier in the day, Iranian media said the US military hit the south-western Iranian city of Abadan as well as Qeshm Island.
At press time, the MCX Crude Oil contract expiring on August 19 trades 1.1% lower at around Rs. 8,030.
Currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, tend to underperform in a high oil price environment.
The odds of oil prices rising higher remain firm on the assumption of a squeezed global energy supply due to escalating Middle East conflicts.
According to TD Securities, the renewed flare-up in regional tensions is adding to supply-side concerns in energy markets. Strategists there highlight that “the return of Iranian-US strikes after a multi-day pause, along with continued Houthi risks for Saudi energy infrastructure, are keeping flows in both the Strait of Hormuz and Bab el-Mandeb heavily constrained,” underscoring the ongoing vulnerability of critical crude and product shipping routes.
Technical Analysis: USD/INR regains ground near 95.50
USD/INR trades slightly higher at around 95.61 at press time, but is maintaining a mildly bearish near-term bias as it holds below the 20-day exponential moving average (EMA) at 95.86. The pair has retreated from recent highs, and the 20-day EMA now acts as immediate overhead supply, hinting at a market that is losing upside traction.
The Relative Strength Index (RSI) at 47.76 sits just below the neutral 50 line, suggesting a lack of strong directional momentum and reinforcing a consolidative-to-soft tone while price remains capped beneath the short-term EMA.
On the topside, initial resistance is located at the 20-day EMA at 95.86, and a sustained break above this level would be needed to ease the current bearish bias and reopen the path toward the recent high of 97.10. Looking down, the key support level for the pair is 95.00.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator
Fed Interest Rate Decision
The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates).
Read more.Last release: Wed Jul 29, 2026 18:00
Frequency: Irregular
Actual: 3.75%
Consensus: 3.75%
Previous: 3.75%
Source: Federal Reserve
- NZD/USD strengthens to around 0.5810 in Thursday’s early European session.
- Hotter New Zealand CPI data strengthens the case for RBNZ rate hikes.
- Fed holds interest rates steady on Wednesday, but three officials dissent.
The NZD/USD pair gathers strength to near 0.5810 during early European trading hours on Thursday, bolstered by the Reserve Bank of New Zealand (RBNZ) rate hike bets. Traders brace for the preliminary reading of the US Gross Domestic Product (GDP) for the second quarter (Q2), which is due later in the day.
Hotter domestic inflation data in New Zealand has fueled speculation that the RBNZ may engage in aggressive interest rate cuts, lifting the New Zealand Dollar (NZD) against the US Dollar (USD).
New Zealand’s annual Consumer Price Index (CPI) inflation hit a two-year high of 4.10% in the second quarter (Q2) of 2026, up from the 3.1% increase seen in Q1, Statistics New Zealand revealed last week. Financial markets are betting on at least two more rate rises in the Official Cash Rate (OCR) to 3.0% this year.
The Fed opted to keep the interest rates unchanged at a range of 3.5% to 3.75% at its July policy meeting on Thursday. Though markets widely expected the US central bank to stay on hold, three policymakers voted for a 25-basis-point rate hike at this meeting. Fed Chairman Kevin Warsh said during the press conference that the committee will be quick to act if inflation pressures accelerate.
Dollar reaction muted as Fed hold disappoints hawkish expectations
ING strategists note that the Fed’s stance has underwhelmed those looking for a stronger policy signal, remarking that “today’s events will be a disappointment for those who felt Kevin Warsh could have flexed his hawkish muscles and left the FX market back to trading US data and what volatile oil prices mean for monetary policy.” In their view, the absence of a more forceful hawkish push keeps the focus on how incoming US data and swings in oil prices will shape expectations for the policy path and, by extension, the Dollar’s near-term trading dynamics.
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
ING’s Chris Turner notes that US real yields and the US Dollar (USD) fell after a confusing FOMC press conference, as markets sensed the Federal Reserve (Fed) may avoid further tightening. He highlights upcoming United States (US) Gross Domestic Product (GDP) and core Personal Consumption Expenditures (PCE) Price Index data as key drivers, warning that downside surprises could weigh on the Dollar and that US Dollar Index (DXY) may correct toward 100.50 ahead of the September FOMC.
Fed messaging and data steer Dollar
"Last night's FOMC press conference was a little confusing. Looking at the market's reaction, the conclusion was that the Fed was not going to be as tough on fighting inflation as initially thought and might try to wriggle through this period of high inflation without hiking."
"Chair Kevin Warsh's celebration of higher real yields and the more 'direct' message from the markets was taken as a view that the Fed had outsourced monetary tightening to the markets, reducing the need for hikes."
"Having risen 60bp since the June FOMC meeting, two US real yields fell 7bp yesterday and undermined the dollar. Presumably, we will not receive much of a steer from the Fed before its September meeting, and it will be the data which determines whether the Fed will hike."
"DXY probably risks a correction back to the 100.50 area and the two sets of CPI prints and jobs data before the 16 September FOMC meeting will determine whether DXY has topped for the year."
"For today, the focus will be on the first look at 2Q GDP data (expected at 2.0% QoQ annualised) and the core PCE inflation data for June. The latter is expected to have slowed a little, with core PCE at 0.2% month-on-month and the year-on-year rate dropping to 3.3% from 3.4%. Any downside surprises here could hit the dollar given the emerging view that the Fed is trying to avoid tightening."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Gold struggles to find acceptance above $4,100 amid a bearish fundamental backdrop.
- Escalating US-Iran tensions and Fed hike bets support the USD, undermining the bullion.
- The technical setup suggests that the path of least resistance remains to the downside.
Gold (XAU/USD) remains depressed heading into the European session on Thursday and seems poised to extend its intraday rejection slide from the $4,100 mark. The US Dollar (USD) regains positive traction and reverses a part of Wednesday's post-FOMC decline, which, in turn, is seen as a key factor weighing on the commodity. Furthermore, inflation concerns stemming from escalating US-Iran tensions keep US Federal Reserve (Fed) rate-hike bets firmly on the table, further driving flows away from the non-yielding bullion.
As was widely expected, the US Federal Reserve (Fed) held interest rates steady at the end of a two-day meeting on Wednesday. The central bank, however, refrained from adopting a more aggressive stance on monetary policy, which weighed heavily on the USD and lifted the Gold price to the weekly high. That said, the on-hold decision drew three dissents who preferred a 25-basis-point rate hike. Furthermore, traders are still pricing in a greater chance that the Fed will raise borrowing costs at least once by the end of this year amid rapidly shifting inflationary dynamics due to volatile oil prices.
According to TD Securities, “precious metals have remained weak in the face of hawkish market pricing for the Fed,” with renewed strength in energy markets expected to “continue to feed into this narrative.” The firm notes that this combination of tighter policy expectations and rising energy prices is keeping gold and the broader precious metals complex on the back foot, reinforcing the current downside bias.
The dominant factor driving crude prices is the ongoing conflict between the US and Iran, including tensions surrounding crucial shipping chokepoints – the Strait of Hormuz and the Bab el-Mandeb. In fact, the US launched strikes against Iran in response to surprise Iranian missile attacks on American forces based in the Middle East on Tuesday. Adding to this, joint US-Saudi strikes against Iran-aligned terrorists in Iraq raise the risk of a broader regional conflict. Moreover, reports suggest that Yemen’s Iran-backed Houthis are considering imposing fees on commercial ships sailing through the southern Red Sea.
This comes on top of the US-Iran standoff over the Strait of Hormuz, which added to concerns about significant disruptions to global energy supplies and led to the overnight sharp rise in crude oil prices. The latest developments fuel worries about energy-driven inflation and back the case for policy tightening by the Fed. Traders now look forward to important US macro releases – the Advance Q2 GDP report and the Personal Consumption Expenditures (PCE) Price Index. The crucial data will be looked at for cues about the Fed's policy path, which will drive the USD and provide a fresh impetus to the Gold price.
XAU/USD daily chart
Technical Analysis: Gold turns vulnerable after facing rejection near $4,100
From a technical perspective, the range-bound price action witnessed over the past month or so might still be categorized as a bearish consolidation phase against the backdrop of a breakdown below the 200-day Simple Moving Average (SMA). This suggests that the path of least resistance for Gold remains to the downside despite the recent rebound from sub-$4,000 levels.
Meanwhile, the Moving Average Convergence Divergence (MACD) indicator turns positive, hinting at improving short-term momentum. However, the Relative Strength Index (RSI) around 48 stays below the midline, reinforcing a capped tone rather than a sustained bullish reversal. Hence, any move up might confront a hurdle near the top end of the range, ahead of $4,200.
A sustained move above should pave the way for additional gains to the 200-day SMA at $4,490.80, which is the key barrier that bulls would need to reclaim to revive a durable upside trend. On the downside, immediate support is seen at recent swing lows around the $3,976–$4,000 area, where buyers previously emerged. As long as XAU/USD trades under the 200-day SMA pivotal resistance, any recovery is likely to be treated as corrective within a broader consolidative-to-bearish framework.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
- USD/JPY rises to near 163.60 as the US Dollar rebounds.
- The Fed left interest rates unchanged and expressed a commitment to bring inflation down.
- The BoJ is highly anticipated to maintain the status quo on Friday.
The USD/JPY pair trades 0.1% higher at around 163.60 during the European trading session on Thursday. The pair rises as the US Dollar (USD) regains ground due to intensifying military aggression between the United States (US) and Iran.
At press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.2% higher to near 101.00.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.17% | 0.21% | 0.10% | 0.04% | 0.04% | -0.19% | 0.24% | |
| EUR | -0.17% | 0.03% | -0.07% | -0.14% | -0.15% | -0.38% | 0.07% | |
| GBP | -0.21% | -0.03% | -0.09% | -0.17% | -0.17% | -0.40% | 0.06% | |
| JPY | -0.10% | 0.07% | 0.09% | -0.07% | -0.06% | -0.31% | 0.17% | |
| CAD | -0.04% | 0.14% | 0.17% | 0.07% | 0.00% | -0.23% | 0.23% | |
| AUD | -0.04% | 0.15% | 0.17% | 0.06% | -0.00% | -0.22% | 0.23% | |
| NZD | 0.19% | 0.38% | 0.40% | 0.31% | 0.23% | 0.22% | 0.49% | |
| CHF | -0.24% | -0.07% | -0.06% | -0.17% | -0.23% | -0.23% | -0.49% |
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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
On Wednesday, the US Dollar fell vertically after the Federal Reserve’s (Fed) monetary policy announcement, in which it left interest rates unchanged in the range of 3.50%-3.75% and warned of upside inflation risks. Three of 12 rate-setting members dissented from the vote and voted for a 25-basis point (bps) interest rate hike.
Fed Chair Kevin Warsh said in the press conference that policymakers are committed to bringing inflation down and won’t hesitate to act when necessary. However, market experts doubt the Fed’s commitment.
Commerzbank’s Michael Pfister highlights that Chairman Kevin Warsh “made it clear that there is no soft inflation target and that the focus is firmly on delivering two percent,” reinforcing the Fed’s commitment to its goal. Yet Pfister notes that Warsh “sidestepped every question about how he intends to achieve this,” offering little guidance on the policy path. Commerzbank argues that, given this approach to communication, “it should come as no surprise that the US Dollar took a hit.”
On the Japanese Yen (JPY) front, investors await the Bank of Japan's (BoJ) monetary policy meeting, which is scheduled for Friday, after the release of Tokyo Consumer Price Index (CPI) data for July the same day.
Analysts at Commerzbank expect the BoJ to "leave its overnight call rate unchanged" at Friday’s monetary policy meeting, noting that "the market is pricing this in at 99.3%, and all analysts surveyed by Bloomberg agree." As a result, "that won’t be the deciding factor." Instead, the focus is on the policy message. Commerzbank argues that "a slightly hawkish tone – one that seriously brings October into play – could therefore be enough to surprise the market and support the Japanese yen." By contrast, "if, on the other hand, the same boilerplate language as usual is used, the yen is likely to hit new lows against the US dollar."
USD/JPY technical analysis
USD/JPY trades higher at around 163.56, maintaining a bullish near-term bias as spot holds above the 20-day exponential moving average (EMA) at 162.84. The pair continues to advance in a well-supported uptrend, with the EMA reinforcing underlying demand just beneath current levels.
The Relative Strength Index (RSI) at 64.06 sits in positive territory but shy of overbought, hinting that upward momentum remains constructive without yet showing signs of exhaustion.
Analysts at Societe Generale note that USD/JPY continues to trade within a contained range, with nearby technical markers clearly defined. They highlight "support 162.20, resistance 164.40" as the key levels currently framing price action.
As the whole atmosphere delivers positive vibes, the pair could extend its advance towards 165.00 if it manages a decisive break above the 164.40 hurdle.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator
BoJ Interest Rate Decision
The Bank of Japan (BoJ) announces its interest rate decision after each of the Bank’s eight scheduled annual meetings. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and raises interest rates it is bullish for the Japanese Yen (JPY). Likewise, if the BoJ has a dovish view on the Japanese economy and keeps interest rates unchanged, or cuts them, it is usually bearish for JPY.
Read more.Next release: Fri Jul 31, 2026 03:00
Frequency: Irregular
Consensus: 1%
Previous: 1%
Source: Bank of Japan
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