Forex News
- Crude Oil bounced on Thursday after a tanker attack in the Gulf of Oman, then faded back toward pre-war levels.
- The attack pushed the UN's maritime agency to pause an evacuation of thousands of sailors stranded near the Strait of Hormuz.
- Record tanker traffic through the Strait and a building supply glut remain the dominant pressure on price.
West Texas Intermediate (WTI) spent Thursday doing its now-familiar trick of grabbing a geopolitical bid and then quietly handing most of it back. A fresh tanker attack in the Gulf of Oman, paired with a decision by the United Nations to halt the evacuation of stranded sailors, lit a bounce of roughly 2.3% off a low near $69.00 to a high around $72.50, before the move faded into the close near $71.50. The honest label for the session is a reflexive fear bid that the tape promptly sold into. Crude Oil is still trading within a whisker of where it sat before the war began, which tells you how little the market now fears the Strait of Hormuz.
The Strait flares, the premium twitches
The trigger was an attack on a container ship in the Gulf of Oman, the latest reminder that the 60-day truce reopening the waterway is held together with tape and goodwill. In response, the International Maritime Organization (IMO) paused its plan to evacuate roughly 11K mariners still stuck near the Strait, saying it needed to reconfirm safety guarantees before sending anyone through. Iran's strait authority then repeated its threat that vessels straying from Tehran-approved lanes would face consequences, deliberately vague and deliberately ominous.
Layer in the unresolved fight over transit tolls, with Tehran wanting to charge for passage and Washington threatening a counter-toll, and you have a ceasefire that could fray on any headline. That is exactly the kind of backdrop that should keep a war premium firmly bid. It did, for about six hours.
The glut has the wheel
The reason that bid keeps leaking out is sitting in the shipping data. Tankers are now moving through the Strait at the fastest wartime pace yet, with a single-day record of about 16 million barrels set earlier in the week that surpassed even pre-war volumes, while Saudi cargoes steam toward Ras Tanura to restart Gulf exports for the first time since March. A temporary US waiver clearing the purchase of already-loaded Iranian barrels only adds to the wave of supply now hitting the water.
The structural signal is louder still. Brent's prompt spread flipped into bearish contango this week, the first such move since the conflict began; that is the market's way of saying near-term supply is no longer scarce. Traders are openly repositioning for a 2026 glut, as a major exporter threatens to break ranks over production quotas. The lone bullish footnote is Cushing, where inventories near 19 million barrels sit below comfortable operating levels, but a thin storage hub is small comfort against a Gulf that is reopening for business.
The inflation irony nobody is pricing
There is a neat irony buried in Thursday's other headline. The Personal Consumption Expenditures (PCE) price index, the inflation gauge the Federal Reserve (Fed) watches most closely, printed at 4.1% YoY for May, the hottest reading since 2023, with the core measure at 3.4%. Both landed roughly in line with forecasts, and the energy spike from the Hormuz war was a primary driver of that surge.
The catch is that the same de-escalation now gutting Crude Oil is quietly defusing the energy-driven inflation impulse that has kept the Fed leaning hawkish. May's data is backward-looking, and the barrel that fed it already sits more than $40 below its wartime peak near $113. A roughly in-line monthly print also took a little starch out of the Dollar on the day, handing Crude's bounce a small mechanical assist it did not earn on its own.
Where to fade it
Resistance: The first ceiling is Thursday's high near $72.50, the level the bounce died at. Above it, sellers should reload toward $75.00, and only a reclaim of the 200-period Exponential Moving Average (EMA), now near $78.00, would force a rethink of the broader downtrend.
Support: The line to watch is the $69.00 area, with Thursday's spike low just beneath it. A clean break there opens the door to the high-$60s and a full round-trip to pre-war levels, where the chart last found a floor.
Bias: Lower. The Stochastic Relative Strength Index (Stoch RSI) is buried near the bottom of its range on the daily chart, so another oversold bounce is possible, but every rally into resistance is a fade until the Strait of Hormuz genuinely re-closes rather than merely flickers. The glut is the trend; the war premium is the noise.
WTI Spot daily chart
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.
- Banxico holds 6.50% unanimously, warning inflation risks remain upside.
- US GDP strength and hot PCE fail to rescue Dollar.
- World Cup windfall helps Peso, but rate-gap risks linger.
The Mexican Peso posted gains of over 0.62% against the US Dollar on Thursday after the Banco de Mexico (Banxico) unanimously decided to hold interest rates unchanged at 6.50%. The USD/MXN trades at 17.49, after reaching a one-and-a-half-month peak at 17.67.
USD/MXN dips as Banxico shifts dovish bias, flags inflation risks
The Mexican currency is boosted by Banxico’s decision to keep interest rates unchanged, and it sees inflation risks tilted to the upside. Banxico projects headline inflation to reach the bank’s 3% plus or minus 1% target in the second quarter of 2027. Worth noting that the board dropped the dovish language while updating its economic projections.
The Mexican economy is expected to recover in the second quarter of 2026, following the contraction in Q1, while headline inflation towards the end of 2026 is projected at 3.5%, with underlying inflation also finishing the current year at 3.5% as headline.
The USD/MXN extended its losses following Banxico’s hawkish hold, ignoring comments by the New York Fed President John Williams, who crossed the wires, following the Mexican central bank’s meeting and said that “inflation is still too high.”
Williams added that monetary policy is well-positioned, that the jobs market “has proved to be resilient, and that it’s imperative to get inflation back to the Fed’s 2% goal. Earlier, Chicago Fed President Austan Goolsbee commented that core inflation is “still too high,” trending in the wrong way, and that of the Fed’s dual mandate, he prioritises inflation.
Economic data in the US was solid, with the first-quarter 2026 GDP upwardly revised from 1.6% to 2.1% in its final reading. In the same tone, Initial Jobless Claims for the week ending June 20 dipped from 217K to 215K, below the 217K estimate.
On the negative tone was inflation, with the Fed’s favourite inflation gauge, the core PCE, rising as expected, by 3.4% YoY in May, up from April’s 3.3% and Durable Goods Orders, which plunged -4.5% YoY from a 8% increase in April.
Despite this, the Greenback failed to gain traction, as the US Dollar Index (DXY), which measures the buck’s performance against its peers, is down 0.19% at 101.39, off yearly highs reached during the sixth-day rally that pushed the DXY towards 101.80.
Bottom line, the Mexican Peso is appreciating due to the revenue of hosting 13 matches of the World Cup, totaling benefits of almost US $2.73 billion in added value, or 0.14% of GDP for 2026, mostly in the services sector, according to Deloitte.
However, once the tournament is over, the reality sinks in. The interest rate differential is set to narrow as Banxico keeps rates unchanged, while the Fed is expected to hike rates, potentially opening the door to further USD/MXN upside.
USD/MXN Price Forecast: Technical outlook
In the daily chart, USD/MXN trades at 17.4962, maintaining a constructive bullish tone as spot holds above the clustered support of the triple simple moving average around 17.3477. The pair also trades above the broken long-term descending resistance line tied to 16.1713, hinting that the broader bearish structure has given way to a medium-term recovery phase. Momentum backs this view, with the 14-day Relative Strength Index at 56.9, staying in positive territory without yet reaching overbought conditions.
On the downside, immediate support is seen at the latest close area around 17.50, with the triple SMA at 17.35 offering a secondary floor ahead of the former long-term trend barrier near 16.17. On the topside, the next technical hurdle emerges at the more recent descending resistance line coming from 18.70, now projected around 17.84, and a clear break above this area would open the path for a deeper corrective advance in favor of the dollar.
(The technical analysis of this story was written with the help of an AI tool.)
Mexican Peso FAQs
The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN 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.
- GBP/USD slid to fresh multi-month lows, trading well below its 50-day and 200-day moving averages as a UK political vacuum overwhelmed an otherwise hawkish central bank.
- Starmer's resignation and an open Labour leadership contest have put a political risk premium back into the Pound just as firm US data lifts the Dollar.
- UK growth figures and a run of Bank of England speakers next week sit alongside US payrolls as the catalysts that matter.
Sterling spent the back half of June proving that a hawkish central bank counts for little when the government is falling apart. The Bank of England (BoE) held Bank Rate at 3.75% on June 18 in a 7-2 vote, with two members pushing for a hike and services inflation still near 3.7%, which on any normal week would have handed the Pound a yield story to lean on. Instead Cable has shed roughly three big figures since, sliding from the 1.3450 area to a multi-month low near 1.3150 before steadying close to 1.3200. The catalyst was not the Bank; it was the resignation of Prime Minister Keir Starmer on June 22 and the open Labour leadership contest that followed.
Politics took the wheel
A leadership vacuum is exactly the kind of risk currency markets struggle to price, and the Pound has taken the hit. Starmer's exit makes him the latest in a run of short-lived premierships, with Andy Burnham the clear frontrunner to replace him and a contest now playing out against weak local-election results and a resurgent Reform UK. For Sterling the problem is less about who wins than the gap itself: an open question over fiscal direction, spending plans, and election timing is a discount the market applies first and asks about later. None of that shows up in a rate decision, which is why the hawkish BoE hold has been comprehensively ignored.
A firm Dollar made it worse
The timing could hardly have been less kind to the Pound. US data on Thursday was firm where it counted: first-quarter Gross Domestic Product (GDP) was revised up to 2.1% from 1.6%, initial jobless claims dropped to 215K against a 225K consensus, and personal income and spending both rose 0.7%. Core Personal Consumption Expenditures (PCE), the inflation gauge the Federal Reserve (Fed) watches most closely, held at 3.4% YoY. That keeps the Fed's hawkish hold intact, with the dot plot still pointing to a possible October hike and no cuts left in the 2026 curve, and it leaves the Dollar bid into a Pound that already has its own reasons to fall.
Below every average that matters
The chart leaves little room for ambiguity. Cable is trading well beneath both its 50-day and 200-day Exponential Moving Averages (EMA), which have converged near 1.3400 and now sit as a thick band of overhead resistance roughly two big figures above spot. The daily Stochastic Relative Strength Index (Stoch RSI) near 41 is recovering off oversold but says nothing about a trend change, and Thursday's bounce off 1.3150 looks like a corrective pause inside a clean downtrend rather than a base. While price holds below 1.3300, every rally is a sell-the-rip candidate.
A loaded week into month-end
The week ahead gives the Pound no shortage of catalysts, and most are domestic. Final first-quarter UK growth figures land Tuesday, with the quarterly reading expected near 0.6%, and the Bank of England puts up a string of speakers through the week, including the Governor on Wednesday and Friday. With the leadership contest live, any speaker straying near fiscal or political territory will be parsed harder than usual. From the US, Nonfarm Payrolls (NFP) on Thursday, pulled forward around the Independence Day holiday, is the marquee release, with the Institute for Supply Management (ISM) manufacturing survey on Wednesday ahead of it. A soft US print is the most realistic path to a Cable bounce; absent that, the political overhang and the trend point the same way.
Levels to watch
Resistance: First resistance sits near 1.3200 just overhead, then 1.3250 and the round 1.3300 level. The heavier barrier is the converged 50-day and 200-day EMA band near 1.3400, which the Pound would need to reclaim to threaten the downtrend.
Support: The line in the sand is the multi-month low near 1.3150. A daily close below it opens 1.3100 and then the psychological 1.3000 handle.
Bias: Bearish. A hawkish BoE has been overridden by a domestic political vacuum and a firm US Dollar, and until the leadership picture clears the Pound lacks a reason to hold gains. Selling rallies toward 1.3300 is favoured while price trades below that level; only a daily close back above 1.3400 neutralizes the bearish structure.
GBP/USD daily chart
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- AUD/USD finished another soft session, holding just above its 200-day average despite a strong domestic jobs report.
- A large May employment beat and a lower unemployment rate keep the RBA's August meeting live, but US data is setting the tone on the pair.
- Chinese factory surveys, RBA minutes, and US payrolls next week are the catalysts most likely to decide the next break.
The Australian Dollar spent Thursday doing the one thing it was not supposed to do after a strong labour report, which is nothing. May employment rose by 40.3K against expectations near 25K, a swing of more than 80K from the prior month's contraction, and the unemployment rate slipped to 4.4% from 4.5%. That is a clean hawkish print for the Reserve Bank of Australia (RBA), the kind of data that keeps a live August meeting on the table and should reward the currency. Instead the Aussie sat pinned to its 200-day Exponential Moving Average (EMA) near 0.6900, unable to turn a positive yield gap into more than a brief, fading bounce.
The US side is doing the work
The explanation sits across the Pacific. US data on Thursday was firm where it counted: the third estimate of first-quarter Gross Domestic Product (GDP) was revised up to 2.1% from 1.6%, initial jobless claims fell to 215K against a 225K consensus, and personal income and spending both rose 0.7%. Core Personal Consumption Expenditures (PCE), the inflation gauge the Federal Reserve (Fed) watches most closely, held at 3.4% YoY while the headline rate ticked up to 4.1%. None of that argues for the cuts the market has already abandoned for 2026, and it keeps the October hike the Fed's dot plot now flags very much alive.
The awkward part is that none of this should be happening to the higher-yielder. At 4.35% the RBA's cash rate sits well above the Fed's 3.50% to 3.75% band, so the Aussie carries a clear rate advantage over the US Dollar. Yet yield is not what is trading here. The Aussie is a China and risk proxy first, and with Chinese activity soft and the US Dollar broadly bid, a jobs beat and a positive rate gap are not enough to overpower the bigger flow. The market wanted a reason to buy the Aussie, got one, and sold the bounce anyway.
Sitting on the line that matters
Price action has compressed the whole debate into a single level. The 200-day EMA near 0.6900 is the floor the Aussie has leaned on through this slide from the June highs around 0.7150, and Thursday's close sat almost exactly on it. The daily Stochastic Relative Strength Index (Stoch RSI) near 26 shows momentum stretched to the downside without being exhausted, consistent with a grind lower rather than a snap-back. On the topside, Thursday's high near 0.6950 is the first hurdle, then the 0.7000 handle, with the 50-day EMA near 0.7050 capping the broader range.
The week ahead is stacked
The calendar gives this pair no quiet run into month-end. An RBA Governor address on Sunday and the RBA minutes on Tuesday will be read for how seriously the board is weighing an August hike after a print this strong. The bigger swing factor, though, is Chinese: the official factory and services gauges on Tuesday and the private RatingDog manufacturing read on Wednesday will tell the commodity bid more than anything out of Canberra. From the US, Nonfarm Payrolls (NFP) on Thursday, pulled forward around the Independence Day holiday, is the marquee event, with the Institute for Supply Management (ISM) manufacturing survey on Wednesday as the warm-up.
Levels to watch
Resistance: The first cap is Thursday's high near 0.6950, then the 0.7000 handle and the 50-day EMA close to 0.7050. A daily close back above 0.6950 would suggest the slide is pausing rather than resting.
Support: The 200-day EMA near 0.6900 is the whole game. A clean daily close below it opens the April lows around 0.6850, with 0.6800 the next defined level beneath.
Bias: Bearish while the pair trades below 0.6950 and leans on the 200-day line. The strong jobs print and positive yield gap argue for a floor, not a rally, and with the US Dollar bid and Chinese data soft the path of least resistance points lower. Only a daily close above 0.7000 flips the near-term read.
AUD/USD daily chart
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
- XAG/USD bounced off its session low and closed higher on the day, yet stayed trapped in a steep downtrend.
- Silver remains far below its 50 and 200 EMAs after collapsing from its early-year highs.
- A hawkish Fed, a firm Dollar and a fading geopolitical premium keep the metal under pressure.
Silver (XAG/USD) enjoyed a rare green session on Thursday, and reading much into it would be a mistake. The metal bounced off a session low near 56.35, briefly spiking close to 59.00 just after the US data hit the wires, before fading back to around 58.00, up roughly 0.8% on the day. Set against the wreckage of the past several months, a single up-day looks far more like oversold mechanics than the start of a turn.
A bounce, not a base
Several forces combined to lift Silver intraday. Thursday's firm Gross Domestic Product (GDP) and a jump in capital goods orders hinted at resilient industrial demand; the in-line inflation print cooled the most aggressive rate-hike bets; and a softer Dollar intraday gave the metal room to breathe. Silver also entered the day deeply oversold, the kind of stretched condition that invites a snapback.
The follow-through told the real story. Silver gave back most of the spike within hours; the daily Stochastic Relative Strength Index (Stoch RSI) sits mid-range near 48 rather than turning up with force; and the short-term reading is already rolling over again. Bounces like this are a feature of downtrends, not evidence they are ending.
The Fed is still the problem
The regime that has been crushing Silver has not changed at all. A hawkish Federal Reserve (Fed) held its policy rate at 3.75% last week, with projections pointing to higher-for-longer, and markets are pricing at least one more hike rather than the cuts they expected at the start of the year. Real yields have climbed and stayed elevated.
That is poison for a metal that pays no income. When cash and bonds offer a real return, non-yielding Silver has to compete on price alone, and it keeps losing. Thursday's data, firm growth with sticky inflation and no cuts in sight, simply reinforced the backdrop that has driven the metal down sharply from its early-year peak above 96.00.
The trade everyone loved, unwound
Silver did not fall in a vacuum; it fell from a bubble. The metal had become the market's favourite story earlier this year, bid up as both an inflation hedge and the so-called AI metal for its use in semiconductors and data centres, with a hefty safe-haven premium layered on during the Middle East conflict. That combination took it to records.
Each of those pillars has since given way. The US-Iran peace framework has pulled Crude Oil back toward pre-conflict levels and drained the war premium; the inflation-hedge case wobbles as the Fed proves it will not blink; and a wave of forced liquidations earlier in the year exposed how crowded the trade had become. What is left is a metal still searching for a floor, with Thursday's bounce more noise than signal.
Levels to watch
Support: The recent swing low near 55.50 is the immediate line in the sand; a daily close beneath it opens the door toward the low-50s, with little obvious support until then.
Resistance: Bounces face resistance quickly. The 59.00 to 60.00 zone, near Thursday's intraday high, is the first real hurdle, and the metal would need to reclaim its moving averages up in the high-60s and low-70s before any talk of a trend change is credible.
Bias: Lower. The trend, the macro backdrop and the positioning all point the same way, and until Silver can hold a base and reclaim broken levels, rallies are for selling rather than chasing. Treat Thursday's green candle as a pause in the decline, not its end.
XAG/USD daily chart
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
- DXY eased on the day, stalling just below the highs after a powerful multi-month climb.
- US growth, spending and jobless claims all came in firm on Thursday.
- Yet core PCE landed only in line, trimming Fed hike bets and leaving the Dollar without fresh fuel.
The US Dollar Index (DXY) had every excuse to extend on Thursday and declined instead. A firm batch of US data crossed the wires, yet the US Dollar eased off the top of its multi-month rally, slipping back toward 101.45 after probing close to 101.75 earlier in the session. The numbers were supposedly tailor-made for Dollar bulls; the tape's refusal to extend on them is the more interesting signal.
Good numbers, just not the right kind
On paper, the releases ticked the boxes a Dollar bull would want. First-quarter Gross Domestic Product (GDP) was revised up to 2.1% annualized, comfortably above the 1.6% consensus, while personal spending and personal income both rose 0.7% and beat expectations. Core capital goods orders jumped 1.6%, and weekly jobless claims fell to 215K, undershooting the 225K estimate. By almost any measure, the US economy is still running warm.
The catch sat in the inflation data. Core Personal Consumption Expenditures (PCE), the inflation gauge the Federal Reserve (Fed) watches most closely, printed in line at 0.3% MoM and 3.4% YoY, sticky but no hotter than feared. Markets had been bracing for an upside surprise that would force the Fed's hand harder; an in-line read removed that tail, and traders quietly trimmed the odds of a September hike.
Already priced for hawkish
None of this changes the bigger picture, which is a Fed still leaning hard against inflation. Last week's hold left the policy rate at 3.75% alongside a hawkish set of projections, and the market continues to price at least one more hike before year-end. That stance has powered the Dollar's run and pushed DXY to the top of its range.
The problem for bulls is that a fully-priced story needs fresh, hotter input to keep advancing, and Thursday delivered firm rather than scorching. Crude Oil has also slid back toward pre-conflict levels as the US-Iran peace framework holds, easing the inflation impulse at the margin, so the Dollar simply ran out of reasons to push higher on the day.
Stretched but still pointing up
Structurally, the uptrend on the chart is still firmly intact. DXY sits well above its 50-period and 200-period Exponential Moving Averages (EMA), both clustered in the high-99s, and the daily Stochastic Relative Strength Index (Stoch RSI) near 70 shows momentum elevated but not yet exhausted. Thursday's dip held above the prior session's base around 101.30.
What the chart cannot disguise is fatigue at the highs. An index that fades on a firm data dump is telling you the easy money up here has been made, even if it has not yet handed the trend back to sellers. For now this reads as a pause inside a bull move, not a reversal.
Levels to watch
Resistance: The 101.75 to 101.80 zone caps the range and marks the line bulls must reclaim and hold; a clean break opens room toward 102.00 and beyond.
Support: Initial support sits near 101.30, the prior session's floor, with the round 101.00 handle below it. A deeper unwind would put the high-99s, where the moving averages sit, back in play.
Bias: Higher, but selectively. The trend still favours the Dollar and at least one hike remains priced, so dips toward 101.00 are a better bet than chasing the highs. Friday's University of Michigan (UoM) sentiment survey and inflation expectations are the next, lower-tier catalyst, and a soft inflation-expectations print would chip further at the hike narrative.
Dollar Index 5-minute chart
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.
Here is what you need to know for Friday, June 26:
The US Dollar Index (DXY) lost momentum on Thursday, retreating toward the 101.40 area after a fresh batch of United States (US) economic data showed sticky inflation, stronger growth, and a resilient labor market. Annual inflation in the US, measured by the Personal Consumption Expenditures (PCE) Price Index, climbed to 4.1% in May from 3.8% in April, matching expectations, while core PCE rose to 3.4% YoY.
Additionally, Initial Jobless Claims fell to 215K, and first-quarter Gross Domestic Product (GDP) was revised higher to an annualized 2.1% from 1.6%.
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 New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | -0.23% | -0.02% | -0.26% | -0.16% | 0.00% | -0.29% | |
| EUR | 0.10% | -0.08% | 0.13% | -0.14% | -0.03% | 0.16% | -0.17% | |
| GBP | 0.23% | 0.08% | 0.21% | -0.01% | 0.04% | 0.26% | -0.08% | |
| JPY | 0.02% | -0.13% | -0.21% | -0.26% | -0.16% | 0.00% | -0.31% | |
| CAD | 0.26% | 0.14% | 0.01% | 0.26% | 0.08% | 0.28% | -0.06% | |
| AUD | 0.16% | 0.03% | -0.04% | 0.16% | -0.08% | 0.17% | -0.12% | |
| NZD | -0.01% | -0.16% | -0.26% | -0.00% | -0.28% | -0.17% | -0.34% | |
| CHF | 0.29% | 0.17% | 0.08% | 0.31% | 0.06% | 0.12% | 0.34% |
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).
EUR/USD traded with mild gains near 1.1370 as the Greenback softened following the PCE release. On the Eurozone side, German sentiment data offered some support to the Euro, with the GfK Consumer Confidence Survey improving to -29.2.
GBP/USD advanced toward the 1.3200 area, benefiting from the broader pullback in the US Dollar (USD).
USD/JPY hovered near 161.80, in intervention territory, as wide US-Japan yield differentials continued to weigh on the Japanese Yen. Traders now look ahead to the upcoming Tokyo Consumer Price Index (CPI) release for June, which will be released early in the Asian session, and could provide fresh clues on the Bank of Japan’s (BoJ) policy path.
AUD/USD gained moderately near the 0.6910 area despite stronger Australian labor market data. Australia’s Employment Change rose by 40.3K in May, beating expectations, while the Unemployment Rate eased to 4.4% from 4.5%.
West Texas Intermediate (WTI) Oil recovered toward the $71.90 per barrel area after renewed supply concerns around the Strait of Hormuz. Oil prices found support after reports of a cargo vessel being hit near Oman, although expectations of improving Middle East flows kept the broader upside limited.
Gold rebounded above the $4,030 area as the US Dollar and Treasury yields moved lower following the PCE report. The metal found support after inflation matched expectations, easing some concerns over an imminent Fed rate hike, although the broader outlook remains tied to US rate expectations.
What’s next in the docket:
Friday, June 26:
- Tokyo CPI
- Final University of Michigan Consumer Sentiment.
Federal Reserve (Fed) Bank of New York President John Williams said in a speech released by text on Thursday that monetary policy remains “well positioned” for the current economy, while warning that inflation may take longer to return to the Fed’s 2% target than previously expected.
Key takeaways:
Williams pushed back the expected return to the Fed’s 2% inflation target from 2027 to 2028.
He reiterated that monetary policy is “well-positioned” for the current economic environment.
Williams expects inflation to moderate to around 3.5% this year, with price pressure easing gradually over time.
He said it remains “imperative” for the Federal Reserve to bring inflation back to its 2% goal.
Williams noted that if Middle East war-related disruptions are resolved soon, they could reduce some inflation pressure.
He said the US economy has so far shown resilience against the economic impact of the war.
Williams sees the US economy growing at around 2.25% with unemployment falling to 4% in 2028.
He described the labor market as resilient, reinforcing the view that the economy remains strong despite uncertainty.
Williams said standing repo operations remain a key tool to cap interest rate pressure.
He added that the Fed will adjust reserve-management purchases as needed."
Williams pushes back 2% inflation timing, keeps policy stance firmly hawkish
Fed’s Williams delivers a moderately hawkish message with a FXS Speech Tracker score of 6/10, slightly above the established baseline of 5.7/10, as his pushing back the 2% inflation target from 2027 to 2028 signals a longer period of restrictive policy. The emphasis that monetary policy is “well-positioned,” alongside forecasts for headline inflation to moderate only gradually to 3.5% this year and resilient US growth and labor markets, underscores a stance that tolerates higher inflation for longer while keeping the focus on eventually returning to the 2% goal. References to Middle East war risks and the importance of standing repo operations and reserve management highlight ongoing vigilance against upside inflation and market rate pressure, reinforcing a bias toward maintaining elevated US Dollar yields.
The FXS Fed Sentiment Index was unchanged, retaining a still elevated level of 121.05, confirming that the overall Fed tone remains firmly in hawkish territory despite the lack of incremental shift in this speech. In combination with the slightly above-baseline FXS Speech Tracker score, the static but high FXS Fed Sentiment Index suggests that Williams’ remarks fit neatly into the prevailing narrative of a Fed comfortable with keeping policy tight, a backdrop that should continue to underpin the US Dollar against lower-yielding peers.
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight a sharp USD/CNH spike to 6.8195, now seen consolidating between 6.8030 and 6.8185 on an intraday basis after an overdone rise. On a 1–3 week horizon, their positive Dollar view remains intact, with the latest momentum surge suggesting scope for gains toward 6.8300 while 6.7900 acts as strong support.
Momentum surge points to 6.8300
"24-HOUR VIEW: USD rose to a high of 6.7979 on Wednesday. Yesterday, we indicated that “despite the advance, upward momentum has not increased much.” However, we highlighted that “there is room for USD to rise further, but any advance is likely part of a higher range of 6.7850/6.8000 rather than a continued rise.” We did not expect upward momentum to accelerate, as USD surged to a high of 6.8195. The sharp rise appears to be overdone, and instead of continuing to rise, USD is more likely to consolidate today, probably between 6.8030 and 6.8185."
"1-3 WEEKS VIEW: We turned positive on USD late last week. On Monday (22 Jun, spot at 6.7840), we indicated that “there is no clear increase in upward momentum, but USD could test 6.8000 next.” After USD rose to a high of 6.7979 on Tuesday, we highlighted yesterday (24 Jun, spot at 6.7930) that “while upward momentum has not increased much further, a break of 6.8000 could lead to a move to 6.8080, potentially 6.8200.” We did not expect USD to soar toward 6.8200 so quickly, as it reached a high of 6.8195. This time around, there is a surge in momentum. From here, USD could rise toward 6.8300. We will maintain our positive USD view as long as it holds above 6.7900 (‘strong support’ level was at 6.7750 yesterday)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Federal Reserve (Fed) Bank of Chicago President Austan Goolsbee said on Thursday that inflation remains the central challenge for policymakers, warning that price pressure is still moving in the wrong direction despite some signs of improvement in services. He said that the Personal Consumption Expenditure (PCE) inflation report wasn’t “all negative” in an interview with CNBC.
Key takeaways:
Inflation is “going the wrong way,” and it remains difficult to determine how much of the current pressure is temporary and how much is persistent.
Some inflation pressure may be driven by one-off factors, but services inflation remains more concerning and “a little more disturbing.”
The PCE report “wasn’t all negative,” as Goolsbee noted some improvement in services, though inflation remains well above where it needs to be.
Core inflation is still “well too high” and trending in the wrong direction, keeping the inflation side of the Fed’s mandate as the main problem.
Goolsbee said he has long been uneasy with forward guidance and does not want to commit to forecasts years ahead, although he does not dislike the dot plot.
He welcomed the Fed Chair’s task force reviewing options around the dot plot and also applauded efforts to streamline the Fed statement.
On artificial intelligence, Goolsbee warned that if markets price in future productivity gains and consumers start spending based on those expectations, it could create overheating risks.
He added that spending today based on expected future gains makes him nervous about potential inflationary pressure.
Says wages are not a great leading indicator for inflation, warning that inflation could rise before wages move higher.”
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