Forex News
- Australia’s May Consumer Price Index is set to accelerate annually despite declining on a monthly basis.
- The CPI inflation data will likely justify the RBA’s pause to its tightening cycle.
- The Australian Dollar remains pressured at two-month lows against the US Dollar ahead of the inflation test.
The Australian Bureau of Statistics (ABS) will publish the high-impact Consumer Price Index (CPI) for May on Wednesday at 01:30 GMT.
Heading into the inflation test, the Australian Dollar (AUD) is at its lowest level in two months against the US Dollar (USD), having surrendered the 0.7000 psychological mark.
What to expect from Australia’s inflation rate data?
Australia’s annual CPI is expected to rise by 4.4% in May after increasing by 4.2% in April, inching close to the near three-year high of 4.6% seen in March. The monthly CPI is seen declining by 0.3% in the same period, following a 0.4% growth reported previously.
The Trimmed Mean CPI inflation is likely to pick up slightly to 3.5% year-over-year (YoY) in May from 3.4%, while the month-over-month (MoM) figure is set to hold steady at 0.3%.
The inflation data release comes after the Reserve Bank of Australia (RBA) held the Official Cash Rate (OCR) at 4.35% last week, pausing after three consecutive rate hikes since the beginning of the year.
The RBA stated that the “board remains focused on ensuring that inflation does not become embedded once the impulse from higher oil prices has passed through.”
“The board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions,” the central bank further noted.
Since the RBA monetary policy meeting, geopolitical tensions have eased somewhat. The United States (US) and Iran struck a peace deal, sending Oil prices sharply lower. That could help alleviate the pressure on Australian inflation in the months ahead.
The divergence between the monthly and annual figures could be justified by a roughly 12% fall in fuel prices over the month amid easing global oil prices and a domestic fuel excise cut, which is set to expire this month.
Meanwhile, new dwelling costs and rents are expected to provide upward pressure on housing inflation.
However, the Trimmed Mean measures will be closely scrutinized to assess whether second-round pass-through from the Middle East energy shock is broadening into the wider services and housing basket.
The RBA closely watches this underlying inflation trend for policy signals.
How could the Consumer Price Index report affect AUD/USD?
AUD/USD is languishing below 0.7000 in the run-up to the inflation showdown, with buyers awaiting a surprise uptick in the annual and monthly Trimmed Mean CPI inflation data to rescue the Australian Dollar.
A softer headline driven by sharply lower fuel prices, but stubbornly high underlying inflation, will keep the RBA on high alert and hopes for rate hikes alive.
On the other hand, easing inflationary pressures in Australia would push back against expectations of the RBA resuming rate hikes late this year, further weighing on the AUD.
Dhwani Mehta, Asian Session Lead Analyst at FXStreet, highlights key technical levels for trading AUD/USD on the CPI release.
“The pair is maintaining a bearish near-term bias as it holds beneath the 21-day, the 50-day and the 100-day Simple Moving Averages (SMAs), clustered between 0.7070 and 0.7135. The pair sits only above the 200-day SMA at 0.6855, which acts as the last meaningful layer of trend support, while the Relative Strength Index (RSI) at 32 is approaching oversold territory, hinting that downside momentum is stretched but not yet exhausted.
On the topside, initial resistance is aligned with the 21-day SMA at 0.7077, followed closely by the 100-day SMA at 0.7085, with the 50-day SMA higher up at 0.7136 reinforcing a broader cap on recovery attempts. On the downside, the 200-day SMA at 0.6855 is the key support to watch; a decisive break below this longer-term measure would likely open the door to a deeper bearish extension in the coming sessions”.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
Consumer Price Index (YoY)
The Consumer Price Index (CPI), released by the Australian Bureau of Statistics on a monthly basis, measures the changes in the price of a comprehensive basket of goods and services acquired by household consumers. The indicator is the primary measure of headline inflation after a new methodology was applied to transition from quarterly to monthly readings, applying to data from April 2024 onwards. The YoY reading compares prices in the reference month to the same month a year earlier. A high reading is seen as bullish for the Australian Dollar (AUD), while a low reading is seen as bearish.
Read more.Next release: Wed Jun 24, 2026 01:30
Frequency: Monthly
Consensus: 4.4%
Previous: 4.2%
Source: Australian Bureau of Statistics
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.
- GBP/USD fell to a fresh near-term low on Tuesday after UK flash PMIs missed across the board.
- A late-session bounce lacked conviction and barely dented the June downtrend.
- With no UK data left this week, Thursday's US PCE print and a run of Fed speakers will drive direction.
Sterling spent Tuesday confirming what the macro backdrop already implied, that the United Kingdom has no growth story to sell right now. June flash Purchasing Managers Index (PMI) readings undershot across the board, the Services gauge sliding to 48.7 against a 50.0 consensus and deeper into contraction. Cable sold into the data, dipping just under 1.3200 before a late bid dragged it back near the handle. The recovery looks hollow; the Pound still closed lower, well inside the month's slide.
A rebound without a reason
The genuinely odd part is that Cable bounced at all on a day when every domestic input pointed lower and firmer US PMIs kept the US Dollar bid. There was no UK data beat behind the lift and no shift in Bank of England (BoE) rate pricing; the move looked like a short-covering twitch, not a Sterling-specific bid. Intraday momentum agrees, with the Stochastic Relative Strength Index (Stoch RSI) rolling over as the bounce stalled near 1.3200. On the daily chart the structure stays firmly bearish, with price well below the 50-day Exponential Moving Average (EMA) near 1.3400 and the 200-day EMA just beneath it; the Pound is catching its breath, not recovering.
Nothing on the UK docket
From here the calendar becomes the problem for anyone hoping Sterling can lead its own recovery. The rest of the week carries no top-tier UK releases at all, leaving a scattering of BoE speakers as the only domestic input; the line-up skews dovish. With Downing Street still rudderless after the Prime Minister's resignation and no growth catalyst in sight, nothing scheduled could hand the Pound a reason to rally on its own. That leaves Cable a passenger for the back half of the week, its direction set almost entirely by moves in the Dollar.
Thursday's PCE is the catalyst that counts
The week's lone market-mover lands Thursday at 12:30 GMT, when the US releases the May Personal Consumption Expenditures Price Index (PCE), the inflation gauge the Federal Reserve (Fed) watches most closely. Core PCE is seen at 0.3% MoM and 3.4% YoY, both above the prior month. A hot print would validate the hawkish hold the Fed delivered last week and the higher-for-longer signal in its dot plot.
With near-term easing no longer priced, an upside surprise extends Dollar strength and shoves Cable back toward its lows. The same window brings the final first-quarter Gross Domestic Product (GDP) reading, Durable Goods Orders, and jobless claims, plus Fed speakers across both days; Friday's University of Michigan (UoM) sentiment and inflation expectations are a footnote.
Level watch
Resistance: The first ceiling sits near 1.3250, which capped Tuesday's early trade, with 1.3300 above it. The real wall is the moving-average cluster around 1.3400, where the 50-day and 200-day EMAs have flattened and converged; until Cable reclaims that zone, rallies are selling opportunities, not a base.
Support: The line in the sand is the recent low around 1.3150, which also marks the April trough and the floor of the year's range; a daily close beneath it confirms the breakdown and opens the way toward the 1.3100 handle. Tuesday's dip under 1.3200 was bought. With no UK catalyst to defend it, that support is a speed bump, not a foundation.
Bias: Bearish while price holds below the 1.3400 EMA cluster. With Sterling stripped of any domestic catalyst this week, the play is to sell rallies toward 1.3250 for a retest of 1.3150. A hot PCE print Thursday breaks that floor and opens 1.3100; only a soft inflation surprise and a daily close back above 1.3300 forces a rethink.
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.
- Risk-off tech rout lifts Greenback to fresh YTD highs.
- Falling WTI pressures CAD despite hotter headline inflation.
- Core PCE, GDP and jobless claims drive Dollar’s next move.
The Loonie registers losses of 0.40% on Tuesday as the US Dollar refreshes year-to-date (YTD) highs, while falling Oil prices weighed on the CAD, with USD/CAD trading above 1.4200 for the first time since April 2025.
USD/CAD breaks above 1.4200 Oil slide crushes Loonie
Sentiment turned sour, led by global tech shares, which plunged with no headline involved; yet there’s speculation that extremely high valuations and month-, quarter- and half-year-end flows could have been involved. Consequently, the risk-off environment bolstered the Greenback, which, according to the US Dollar Index (DXY), posted gains of over 0.36% at 101.36.
US data was positive; the S&P Global Manufacturing PMI in June rose to 55.7 from 55.1 in May, beating forecasts of 54.8. The report showed activity improved as companies front-loaded orders to avoid shortages and rising prices, driven by the US-Iran war energy shock.
In Canada, Bank of Canada Governor Tiff Macklem commented that the latest inflation report showed price increases concentrated in energy but noted that food inflation was a concern. Despite this, money markets do not expect a rate hike by the BoC until December, with odds at 57.4%.
On Monday, Canada's inflation data rose more than expected to 3.2% in May, but the core print was more subdued. This is sparked by Oil prices dropping, as WTI, the US crude Oil benchmark, loses over 1.40% on Tuesday, down to $73.00 per barrel.
On Wednesday, the Canadian docket will feature speeches by BoC officials Rogers and Breeden. In the US, housing data is expected, followed by Thursday’s busy schedule with the release of the Fed’s preferred inflation gauge, the Core PCE, GDP for Q1 2026 and Initial Jobless Claims for the week ending June 20.
USD/CAD Price Forecast: Technical outlook
In the daily chart, USD/CAD trades at 1.4211, extending a firm bullish bias as spot holds well above the clustered 50-, 100- and 200-day Simple Moving Averages (SMAs) grouped near 1.3805 and continues to respect the rising support trend line that has recently underpinned prices around 1.4158. The Relative Strength Index (14) at roughly 88 sits deep in overbought territory, suggesting upside momentum remains strong but also warns that the latest advance is stretched and vulnerable to a corrective pause if buying interest fades.
On the downside, initial support emerges at the rising trend line around 1.4158, where a pullback could attract fresh bids and keep the broader uptrend intact, with the SMA cluster near 1.3805 providing a more distant but significant structural floor if a deeper correction unfolds. With no clearly defined resistance levels immediately overhead from the available metrics, the pair’s upside appears open in the near term, though any further gains are likely to be increasingly challenged as overbought conditions persist.
(The technical analysis of this story was written with the help of an AI tool.)
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.38% | 0.36% | -0.05% | 0.36% | 1.24% | 0.73% | 0.12% | |
| EUR | -0.38% | -0.04% | -0.44% | -0.03% | 0.82% | 0.34% | -0.27% | |
| GBP | -0.36% | 0.04% | -0.36% | 0.03% | 0.88% | 0.37% | -0.18% | |
| JPY | 0.05% | 0.44% | 0.36% | 0.38% | 1.26% | 0.76% | 0.16% | |
| CAD | -0.36% | 0.03% | -0.03% | -0.38% | 0.89% | 0.40% | -0.18% | |
| AUD | -1.24% | -0.82% | -0.88% | -1.26% | -0.89% | -0.47% | -1.09% | |
| NZD | -0.73% | -0.34% | -0.37% | -0.76% | -0.40% | 0.47% | -0.58% | |
| CHF | -0.12% | 0.27% | 0.18% | -0.16% | 0.18% | 1.09% | 0.58% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
Here is what you need to know for Wednesday, June 24:
The US Dollar Index (DXY) surged to a one-year high near 101.40 on Tuesday as investors digested the latest S&P Global US Purchasing Managers Index (PMI), which showed business activity remained resilient. The Manufacturing PMI rose to 55.7 in June, its highest level since May 2022.
The ADP Employment Change 4-Week Average improved to 30.75K, supporting the view that the US labor market remains firm enough to keep the Federal Reserve (Fed) cautious.
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 Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.42% | 0.41% | -0.03% | 0.37% | 1.26% | 0.80% | 0.15% | |
| EUR | -0.42% | -0.02% | -0.48% | -0.07% | 0.80% | 0.36% | -0.28% | |
| GBP | -0.41% | 0.02% | -0.43% | -0.03% | 0.84% | 0.38% | -0.25% | |
| JPY | 0.03% | 0.48% | 0.43% | 0.39% | 1.28% | 0.83% | 0.16% | |
| CAD | -0.37% | 0.07% | 0.03% | -0.39% | 0.89% | 0.44% | -0.22% | |
| AUD | -1.26% | -0.80% | -0.84% | -1.28% | -0.89% | -0.43% | -1.08% | |
| NZD | -0.80% | -0.36% | -0.38% | -0.83% | -0.44% | 0.43% | -0.66% | |
| CHF | -0.15% | 0.28% | 0.25% | -0.16% | 0.22% | 1.08% | 0.66% |
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 fell 0.4% on the day to 1.1380 amid soft Eurozone data. The Eurozone Composite PMI improved to 49.5 in June from 48.5, but stayed below the 50.0 threshold, showing that private-sector activity continued to contract. Germany also remained a weak spot, with its Composite PMI falling to 48.0, the lowest level in 18 months, as services activity deteriorated.
GBP/USD remained under pressure near 1.3200 after the UK PMI figures showed renewed weakness in the services sector. The United Kingdom (UK) Services PMI fell to 48.7 from 49.3, marking the sharpest contraction since January 2023, while the Composite PMI dropped to 49.4. The data reinforced concerns over weak UK growth and came after Bank of England (BoE) policymaker Taylor said that an extended hold in rates remains the correct policy response.
USD/JPY trades muted near 161.50 in a neutral zone as investors assessed US PMIs, ADP data, and the Bank of Japan (BoJ) policy outlook. Strong US activity data offered some support to the Greenback, but weaker employment details inside the PMI report limited upside momentum. The Yen also remained sensitive to intervention risks as the pair continues to trade near historically elevated levels.
AUD/USD fell sharply to a two-month low near the 0.6910 level as investors await Australia’s May Consumer Price Index (CPI) release, due on Wednesday. The previous April report showed annual inflation slowing to 4.2% from 4.6%, while Trimmed-mean Inflation edged higher to 3.4% YoY, keeping attention on sticky underlying price pressures.
West Texas Intermediate (WTI) Oil trades near $73.30 per barrel as markets monitor increased flows through the Strait of Hormuz following progress in US-Iran talks. Oil prices remained under pressure after the US granted Iran a 60-day Oil sanctions waiver, easing fears of a prolonged disruption, although shipping risks and uncertainty in the region kept traders cautious.
Gold fell near $4,120 as a resilient US Dollar limited bullion upside. Easing US-Iran tensions reduced part of the geopolitical bid for the metal, while stronger US data and expectations that the Fed may keep policy restrictive limited upside momentum.
What’s next in the docket:
Wednesday, June 24:
- Australian CPI
- BoJ Summary of Opinions
- BoC Summary of Deliberations
Thursday, June 25:
- US PCE
- US GDP
- Jobless Claims
- Australian Jobs
Friday, June 26:
- Tokyo CPI
- Final University of Michigan Consumer Sentiment.
- The Swiss Franc falls for the fifth straight day against the Greenback.
- SNB intervention warnings keep Swissie bulls on the defensive.
- Strong US PMIs reinforce Dollar strength and Fed hike bets.
The Swiss Franc (CHF) extends its losses for the fifth straight trading day against the US Dollar (USD), down 0.15% on Tuesday, as risk appetite sours amid the AI rout and expectations that the Federal Reserve (Fed) could raise rates later this year. At the time of writing, USD/CHF trades at 0.8100
Swissie weakens as Fed repricing and SNB pressure build
The scenario for the Swissie is one in which the Swiss National Bank (SNB) is worried about the appreciation of the CHF. Last week, the SNB kept rates unchanged at 0%, yet its Chairman, Martin Schlegel, commented that the situation in the Middle East remained uncertain, adding that the bank is ready to intervene in the foreign exchange markets due to the Franc’s “rapid and excessive appreciation.”
Aside from this, the sudden shift of policy stance by nearly half of the FOMC board in the US triggered a depreciation of the Swiss Franc vs the Greenback by nearly 2% since June 18.
Data from the US showed that economic activity in the manufacturing and services sectors is flourishing, driven by companies front-loading orders to avoid inventory shortages and rising prices.
In Europe, economic activity remains in contractionary territory, despite improving. S&P Global reported that manufacturing activity slowed but remained in expansion. On the other hand, the S&P Services PMI improved from 47.7 to 48.9, yet it remained in contractionary territory for the second consecutive month.
USD/CHF Technical Analysis
The USD/CHF daily chart shows the pair maintains an upward bias after hitting the 0.8042 target from the head-and-shoulders pattern. It is approaching the 0.8100 level, closing around 0.8090. A break above this will open the way to the 0.8100 milestone, followed by the August 1, 2025, high at 0.8172, and eventually the 0.8200 level.
EUR/CHF Technical Analysis
The EUR/CHF pair recoiled on Tuesday, diving below the 200-day SMA at 0.9227, opening the door to a retest of 0.9200. Worth noting that momentum remains bullish, but buyers need to clear the latest cycle high seen at 0.9266, the June 22 high, so that they can challenge the 0.9300 mark.
On the downside, if the EUR/CHF dives below 0.9200, look for further losses, with the next area of interest seen at 0.9180, the June 17 daily low.
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
- US Dollar Index climbs to its highest level since May 2025, supported by Fed rate hike bets.
- Markets price in a 70% chance of a September Fed rate hike ahead of Thursday's PCE inflation report.
- Technical indicators point to a strengthening uptrend, although overbought conditions are beginning to emerge.
The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, extends its rally on Tuesday, climbing to its highest level since May 2025. At the time of writing, the index trades around 100.40, up 0.4% on the day.
The Dollar's advance gathered pace after the index decisively cleared the 100.00 mark, ending a prolonged period of range-bound trading. The upside comes as traders increasingly price in the possibility of a Federal Reserve (Fed) interest rate hike later this year following last week's monetary policy meeting, where Chair Kevin Warsh reiterated the central bank's commitment to bringing inflation back to its 2% target.
Meanwhile, resilient US economic data have bolstered expectations that the Fed can afford to raise borrowing costs. Economic activity remains in expansion territory, while the labor market appears to be stabilizing.
The preliminary S&P Global Services Purchasing Managers Index (PMI) rose to 51.3 from 50.7, while the Manufacturing PMI accelerated to 55.7 from 55.1. Both readings exceeded market expectations. The four-week average of ADP Employment Change climbed to 30.75K from 26.5K.
Markets are currently pricing in a 70% chance of a rate hike at the September meeting, according to the CME FedWatch Tool. Attention now turns to the Personal Consumption Expenditures (PCE) inflation report and the final estimate of first-quarter Gross Domestic Product (GDP), both due on Thursday, for fresh clues on the Fed's policy outlook.
At the same time, focus remains on US-Iran negotiations after both sides reached a 60-day Memorandum of Understanding (MoU) last week. Talks are progressing, but the situation remains fluid and the risk of setbacks persists, particularly over Iran's nuclear program. Uncertainty over whether a final deal can be reached is keeping safe-haven demand for the US Dollar intact.
Technical Analysis:
On the daily chart, the Dollar's near-term bias is bullish as price extends well above the 50-, 100- and 200-day Simple Moving Averages (SMAs), which fan out below the market and suggest a reinforced underlying uptrend.
Momentum aligns with this constructive tone, with the Relative Strength Index (RSI) at 73.4 edging deeper into overbought territory while the Average Directional Index (ADX) near 36 signals a strengthening trend.
On the topside, initial resistance emerges at 102.00, where a horizontal barrier caps further gains ahead of a more distant ceiling near 103.50. On the downside, immediate attention lies on the psychological 100.00 level as first support, followed by a dense demand band formed by the 50-day SMA around 99.10, the 100-day SMA near 98.90 and the 200-day SMA at 98.77, with a deeper structural floor only seen toward 97.50 if a sharper correction unfolds from overbought conditions.
(The technical analysis of this story was written with the help of an AI tool.)
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 Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.42% | 0.49% | -0.02% | 0.36% | 1.30% | 0.78% | 0.21% | |
| EUR | -0.42% | 0.05% | -0.44% | -0.08% | 0.84% | 0.37% | -0.22% | |
| GBP | -0.49% | -0.05% | -0.47% | -0.11% | 0.81% | 0.32% | -0.26% | |
| JPY | 0.02% | 0.44% | 0.47% | 0.36% | 1.30% | 0.81% | 0.21% | |
| CAD | -0.36% | 0.08% | 0.11% | -0.36% | 0.94% | 0.46% | -0.14% | |
| AUD | -1.30% | -0.84% | -0.81% | -1.30% | -0.94% | -0.45% | -1.10% | |
| NZD | -0.78% | -0.37% | -0.32% | -0.81% | -0.46% | 0.45% | -0.61% | |
| CHF | -0.21% | 0.22% | 0.26% | -0.21% | 0.14% | 1.10% | 0.61% |
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).
- AI valuation fears sour risk mood, boosting US Dollar demand.
- Fed hike bets keep two-year Treasury yields elevated, boosting the USD.
- US Core PCE, GDP and jobless claims drive the next catalyst.
Gold (XAU/USD) price erases Monday’s gains, diving over 1.30% on Tuesday, pressured by broad US Dollar (USD) strength, driven by a hawkish Federal Reserve (Fed), as well as a risk-off mood that is driving flows toward the Greenback's safe-haven appeal. The XAU/USD pair trades at $4,139, after reaching a daily high of $4,198.
XAU/USD falls as Dollar strength and higher yields dominate
Market sentiment remains dismal, driven by losses in technology companies, amid investors' concerns about frothy valuations in AI-related companies. At the same time, the US Dollar Index (DXY), which tracks the Dollar’s performance against a basket of six peers, is up 0.40% at 101.39, a year-to-date (YTD) high.
The hawkish tilt by the Federal Reserve continues to weigh on the non-yielding metal, after nearly half of its members favor a restrictive policy. Money markets now expect at least 34 basis points of tightening toward the end of 2026, a huge reversal after anticipating close to 60 bps of easing in mid-January.
Hence, expectations for a higher-for-longer scenario are underpinning US Treasury yields, with the 2-year T-note, the most sensitive to the path of interest rates, sitting at 4.19%, 71 basis points higher than at the beginning of 2026, when it was 3.475%.
US data was also benign, as the S&P Global Manufacturing PMI in June rose to 55.7, up from 55.1 in May and exceeding estimates of 54.8. The report showed that activity improved due to companies front-loading orders to avoid shortages and rising prices, derived from the US-Iran war energy shock.
In the meantime, talks between the US and Iran show progress, according to Iran’s ambassador to the UN. At the same time, Washington lifted sanctions on Iran for 60 days from Monday, even though hostilities in Lebanon remained.
The re-opening of the Strait of Hormuz is alleviating inflationary pressures, with Oil prices continuing to fall for the second straight week. In the day, WTI is down 1.34% to $73.08 per barrel, losing over 3% so far this week.
Ahead this week, the US economic docket will feature the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index, Gross Domestic Product (GDP) figures, and jobless claims data on Thursday.
XAU/USD price forecast: Gold bearish bias intact, sellers eye $4,000
Gold’s technical picture shows that sellers remain in charge after the XAU plunged below the 200-day Simple Moving Average (SMA) at $4,446, which is a crucial level for buyers to reclaim if the yellow metal is set to recover.
Worth noting that the downtrend remains in place, as XAU/USD has posted four consecutive trading days of lower highs and lower lows, with bears eyeing a clear break below $4,100, which would open the door to a test of the June 11 daily low at $4,023. Below this level is $4,000.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Commerzbank highlights strong South Korean export momentum, led by semiconductors and petroleum, but notes that South Korean Won (KRW) remains one of Asia’s weakest currencies versus the Dollar. The Bank of Korea (BoK) is expected to raise its policy rate by 25bp to 2.75% in July, having adopted a more hawkish tone as financial stability and inflation risks gain prominence.
Won underperforms despite export strength
"On monetary policy, the Bank of Korea (BoK) is expected raised the policy rate by 25bp to 2.75% at its next meeting on 16 July."
"BoK have adopted a more hawkish tone in recent weeks, with BoK Governor Shin Hyun-song stating that BoK should raise rates “before it's too late”. BoK meeting minutes also show a rising urgency to tighten policy as financial stability risks from the financial and housing markets mount."
"Furthermore, several members suggested that inflationary risks have outpaced growth risks. They noted that the strong semiconductor sector have offset the drag from the Middle East conflict."
"In FX, USD/KRW rose 0.4% to 1,537 yesterday, driven by a stronger USD. KRW is the second-weakest performing currency in Asia this year, falling 6.4% vs the USD compared to the average for Asian currencies ex-Japan of -2.9%."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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