Forex News
- NZD/USD returns to levels below 0.5700 after rejection at the 0.5725 area.
- Trump's comments suggesting the end of the US-Iran ceasefire have triggered a fresh bout of risk aversion.
- Previously, a hawkish hike by the RBNZ had provided a fresh boost to the Kiwi.
The New Zealand Dollar’s (NZD) rally against the US Dollar (USD) has been short-lived, as the pair returned to sub-0.5700 levels during the European session after being rejected at the 0.5725 area earlier in the day. Market concerns about the status of the US-Iran ceasefire have hammered risk appetite, offsetting the positive Kiwi's reaction to the Reserve Bank of New Zealand’s (RBNZ) hawkish hike.
US President Donald Trump affirmed earlier on Wednesday that the ceasefire is no longer in effect, and that, in his opinion, the memorandum of understanding “is over,” although he added that negotiators can “keep talking if they want.”
These remarks come after the rival countries exchanged attacks earlier on the day and the US revoked Iran's authorization to export Crude. The resumption of the hostilities has boosted US Treasury yields, sending the safe-haven US Dollar higher against its main rivals, although the Greenback’s rally remains contained within previous ranges so far.
In New Zealand, the RBNZ hiked interest rates by 25 basis points to 2.5%, as widely expected, with the bank’s statement leaving the door open for further monetary tightening. The Kiwi Dollar rallied against its main peers immediately after the decision.
In the US, the focus on Wednesday is on the release of the minutes of the last Federal Open Market Committee (FOMC) meeting. The central bank delivered a hawkish hold in the first meeting under Kevin Warsh’s direction, and investors will be eager to know more about the bank’s monetary tightening calendar.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
TD Securities strategists preview the June Federal Open Market Committee (FOMC) Minutes, expecting more insight into the policy debate than provided by Chair Warsh’s press conference. They highlight internal disagreement over whether policy is sufficiently restrictive as inflation risks rise, with many officials seeing scope for both hikes and a pause, and most potentially favoring renewed tightening if inflation continues to surprise higher.
Minutes to reveal policy divisions
"The June FOMC minutes may reveal more about the policy debate than Chair Warsh did at his press conference."
"The apparent "family fight" likely focused on whether policy was restrictive enough given rising inflation risks."
"While "many" participants likely saw a case for both hikes and holding steady this year, the Committee's recent hawkish tilt suggests "most" could have favored renewed tightening if inflation continues to surprise to the upside."
"There is also a risk the minutes provide limited detail, reflecting both the shorter post-meeting statement and Chair Warsh's efforts to curb forward guidance."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Gold declines despite rising geopolitical tensions as renewed demand for the US Dollar limits the precious metal's appeal.
- Donald Trump says the memorandum of understanding with Iran is over, reviving fears of renewed escalation in the Middle East.
- Investors now await the Federal Reserve's June meeting Minutes for fresh clues on the outlook for interest rates.
Gold (XAU/USD) trades around $4,050 on Wednesday, down 1.40% on the day at the time of writing, as investors favor the US Dollar (USD) following a fresh deterioration in tensions between the United States (US) and Iran. The precious metal remains under pressure despite the increasingly fragile geopolitical backdrop, as markets expect that persistently higher energy prices could keep US monetary policy restrictive.
Market sentiment deteriorated after US President Donald Trump said that the memorandum of understanding aimed at ending the conflict with Iran was now "over." Trump also stated that he no longer wanted to deal with Iran, while announcing trade measures against Spain and renewing his criticism of the North Atlantic Treaty Organization (NATO). These remarks supported the US Dollar, while Oil prices advanced amid rising concerns over global supply disruptions.
Tensions escalated after US strikes targeted Iranian military infrastructure in response to attacks on commercial vessels transiting the Strait of Hormuz. The collapse of the memorandum with Iran has reignited concerns over the security of this strategic waterway, through which a significant share of global Oil exports passes. Market participants fear that a broader conflict could keep energy prices elevated and fuel a new wave of inflationary pressures.
Against this backdrop, US Treasury yields remain elevated and continue to weigh on non-yielding Gold. Investors are now focused on Wednesday’s release of the Federal Reserve (Fed) June meeting Minutes for additional guidance on the future path of monetary policy.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Geoff Yu at BNY highlights that client flows into United States (US) equities remain geared to inflation risk, even as direct inflation-hedge sectors see reduced inflows. BNY’s iFlow equity inflation style indicator shows a wide gap between inflation-sensitive flows and falling breakevens. Yu argues investors accept energy-led disinflation but still fear labor and tech-driven price pressures, keeping sector allocations defensive.
Flows and inflation beta in sectors
"Client flows into US equities remain sensitive to inflation risk, even as flows into the most direct inflation-hedge sectors have eased. Our iFlow equity inflation style indicator tracks this by estimating the correlation between industry-group returns and changes in the two-year breakeven inflation rate. It then compares that with accelerated flows into the same sectors."
"The break came in May: breakeven inflation fell sharply as energy prices weakened, but that didn’t trigger comparable outflows from industry groups with high inflation correlations."
"The gap between inflation-related equity flows and breakevens is now the widest in 18 months. This suggests clients are willing to accept energy-led disinflation but are less convinced that broader inflation risks have cleared."
"We see this as continued concern around labor markets and other price pressures linked to tech-driven investment. Until those non-energy inflation risks ease, equity flows are likely to remain defensive, with investors reluctant to cut inflation beta in sector allocations."
"Easier financial conditions should also provide support for equities, provided softer inflation reflects supply-side normalization rather than a material weakening in demand."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- EUR/USD returns to the 1.1400 area after rejection at 1.1430 earlier on Wednesday.
- Fresh US-Iran tensions and investors' cautiousness ahead of the release of the FOMC minutes are weighing on the pair.
- The technical picture shows a potential bearish flag formation.
The Euro (EUR) shows marginal losses against the US Dollar (USD) on Wednesday and has returned to levels just above 1.1400 during the European trading session after rejection at 1.1430. A new round of hostilities in Iran and investors’ cautiousness ahead of the release of the minutes of the latest Federal Reserve (Fed) meeting are keeping Euro bulls in check.
US President Donald Trump affirmed earlier on Wednesday that the ceasefire is over and that, in his view, the memorandum of understanding is no longer in effect. These comments follow a fresh bout of reciprocal attacks between the US and Iran, and the revocation of the US authorisation to sell Iranian Oil.
The market reaction has been tame so far, as investors continue to view these events as manoeuvres to gain leverage in the negotiation process. Beyond that, investors remain wary of placing large directional bets on the USD ahead of the release of the minutes of June’s Fed meeting, eager for further insight into the central bank’s monetary policy plans.
Technical Analysis: A potential bearish flag is in progress
EUR/USD trades at 1.1405, at the bottom of the immediate ascending channel, that might turn out to be a bearish flag formation. Momentum indicators in four-hour charts are turning bearish, with the Relative Strength Index (14) easing toward 44, and the Moving Average Convergence Divergence (MACD) slipping back into slightly negative territory, suggesting that bullish attempts are losing traction.
A break of the channel bottom and Tuesday's low at 1.1400 would boost expectations of a bearish flag formation that would be confirmed below the late June lows in the 1.1325-1.1330 area. The pattern's measured target is just below the late May 2025 low, at 1.1210.
On the topside, Tuesday's highs around 1.1459 and last week's trading peak in the area of 1.1475 are likely to challenge bulls in case of a positive reaction. An unlikely breach of those levels would clear the path towards the mid-June highs, near 1.1620.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.24% | 0.05% | 0.70% | -0.24% | 0.23% | 0.24% | 0.54% | |
| EUR | -0.24% | -0.22% | 0.43% | -0.52% | 0.00% | -0.03% | 0.24% | |
| GBP | -0.05% | 0.22% | 0.54% | -0.30% | 0.23% | 0.19% | 0.45% | |
| JPY | -0.70% | -0.43% | -0.54% | -0.96% | -0.35% | -0.41% | -0.19% | |
| CAD | 0.24% | 0.52% | 0.30% | 0.96% | 0.59% | 0.55% | 0.76% | |
| AUD | -0.23% | -0.01% | -0.23% | 0.35% | -0.59% | -0.05% | 0.22% | |
| NZD | -0.24% | 0.03% | -0.19% | 0.41% | -0.55% | 0.05% | 0.27% | |
| CHF | -0.54% | -0.24% | -0.45% | 0.19% | -0.76% | -0.22% | -0.27% |
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).
European Central Bank (ECB) policymaker and Governor of the Bank of Spain, José Luis Escrivá, said on Wednesday that the central bank “will keep all options on the table and decide on a meeting-by-meeting basis.”
Additional quotes
If the recent decline in oil prices were to persist, the factors that had concerned policymakers would gradually ease.
The rise in oil prices over recent months had started to be transmitted to other prices in the economy.
Monetary policy would normally look through one-off energy price shocks, but we started to see indirect effects over recent months with rising services inflation, transport costs and food prices.
We had to react by raising interest rates.
The ECB should remain agile given the uncertainty.
Market reaction
As of writing, EUR/USD is defending 1.1400 following these comments, modestly flat on the day.
Escrivá flags energy-driven risks but keeps ECB flexible
Escrivá’s 6.2/10 FXS Speechtracker score stands above the historic 5.4/10 baseline, signaling a mildly more hawkish tone than usual. The emphasis on past rate hikes in response to indirect energy effects on services inflation, transport costs and food prices underlines concern about second-round pressures in the Euro area.
However, the conditional remark that a sustained decline in oil prices would ease those concerns tempers the hawkishness. Escrivá’s insistence that the ECB remain agile, keep all options on the table and decide on a meeting-by-meeting basis points to a flexible stance that leaves Euro traders focused on incoming energy and inflation data for direction.
Silver prices (XAG/USD) fell on Wednesday, according to FXStreet data. Silver trades at $58.56 per troy ounce, down 2.34% from the $59.97 it cost on Tuesday.
Silver prices have decreased by 17.61% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 58.56 |
1 Gram | 1.88 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 69.27 on Wednesday, up from 68.47 on Tuesday.
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.
(An automation tool was used in creating this post.)
Standard Chartered economists Anubhuti Sahay and Saurav Anand assess India’s FY27 fiscal deficit outlook, highlighting how lower crude Oil prices reduce the risk of fiscal slippage to about 0.2-0.3% of Gross Domestic Product (GDP) versus 0.5% earlier. They cite the Economic Stabilisation Fund, reduced subsidy burden, partial excise duty rollback, and faster divestment as key supports, while noting remaining but manageable risks.
Lower slippage risk with cheaper Oil
"We think the risk of a slippage in the central government’s FY27 (year ending March 2027) fiscal deficit has eased to 0.2-0.3% of GDP, given the sharp fall in crude oil prices; we had previously estimated slippage risk at 0.5% of GDP (see At a Glance – India – Is the tide turning?). The central government has targeted the FY27 fiscal deficit at 4.3% of GDP."
"Likely lower losses from the excise duty cut, a lower subsidy burden and a faster pace of divestment, along with the budgeted Economic Stabilisation Fund (ESF), are the key reasons we see a reduced risk of fiscal slippage. The ESF was established in the FY27 budget to act as a buffer to meet any unexpected increase in expenditure."
"First, we have lowered our FY27 crude oil price assumption to USD 85/bbl from USD 95/bbl previously. We believe lower crude oil prices will likely allow the government to reverse 40-50% of the INR 10/litre excise duty cut on diesel and gasoline announced in March 2026, likely in H2-FY27."
"We also expect retail diesel and gasoline prices to be reduced by INR 2-3/litre in H2. Stable retail fuel prices in H1 are likely to give oil marketing companies room to recover most of the heavy losses incurred in Q1."
"While fiscal slippage risks remain, we think they are manageable. First, crude oil prices could undershoot our assumption – ICB prices are currently trading around USD 70/bbl."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
