Forex News
- AUD/USD attracts sellers for the third straight day and reacts little to Australia’s mixed CPI data.
- A tech-driven selloff in global equity markets and the Fed’s hawkish tilt lend support to the USD.
- Conflicting messages on Iran’s nuclear issues further benefit the buck and weigh on spot prices.
The AUD/USD pair turns lower for the third straight day following a modest Asian session uptick to the 0.6920-0.6925 area and drops to a fresh low since April 7 on Wednesday. Bears now await a sustained breakdown and acceptance below the 0.6900 mark before positioning for an extension of the recent pullback from a four-year peak.
Following a rather muted reaction to mixed Australian consumer inflation figures, the AUD/USD pair attracts fresh sellers and seems vulnerable to slide further in the face of a broadly firmer US Dollar (USD). The Australian Bureau of Statistics (ABS) reported that the headline Consumer Price Index (CPI) fell 0.7% in May, with the annual rate easing from 4.2% to 4.0%, or the slowest pace in three months. However, the trimmed mean CPI rose 0.4% in May and lifted the annual core rate to 3.6%.
The Reserve Bank of Australia (RBA) reiterated earlier this month that it will not hesitate to tighten further if inflation remains above its target band of 2% to 3%. Moreover, traders are still pricing in a roughly 15 basis point (bps) of additional tightening for the remainder of the year. This, however, does little to provide any meaningful boost to the Australian Dollar (AUD) as a tech-driven global equity selloff and the US Federal Reserve's (Fed) hawkish outlook continues to boost the safe-haven USD.
In fact, nine of the Fed's 19 committee members believed that they would need to raise the policy rate this year to combat sticky inflation, prompting investors to ramp up their bets for at least one rate hike, either in September or December. Adding to this, mixed US-Iran messages on Tehran's nuclear program keep geopolitical risk premiums in play and lift the USD to a fresh high since May 2025. This, in turn, exerts pressure on the AUD/USD pair and backs the case for a further depreciating move.
Australian Dollar Price This week
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies this week. Australian Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.90% | -0.01% | 0.13% | 0.34% | 1.44% | 1.40% | 0.41% | |
| EUR | -0.90% | -0.90% | -0.70% | -0.51% | 0.59% | 0.46% | -0.47% | |
| GBP | 0.00% | 0.90% | -0.04% | 0.34% | 1.43% | 1.36% | 0.40% | |
| JPY | -0.13% | 0.70% | 0.04% | 0.15% | 1.28% | 1.23% | 0.21% | |
| CAD | -0.34% | 0.51% | -0.34% | -0.15% | 1.11% | 1.08% | 0.05% | |
| AUD | -1.44% | -0.59% | -1.43% | -1.28% | -1.11% | -0.07% | -1.01% | |
| NZD | -1.40% | -0.46% | -1.36% | -1.23% | -1.08% | 0.07% | -0.95% | |
| CHF | -0.41% | 0.47% | -0.40% | -0.21% | -0.05% | 1.01% | 0.95% |
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 Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
Gold prices fell in India on Wednesday, according to data compiled by FXStreet.
The price for Gold stood at 12,397.88 Indian Rupees (INR) per gram, down compared with the INR 12,536.40 it cost on Tuesday.
The price for Gold decreased to INR 144,611.40 per tola from INR 146,222.10 per tola a day earlier.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 12,397.88 |
10 Grams | 123,982.80 |
Tola | 144,611.40 |
Troy Ounce | 385,617.50 |
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
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.
(An automation tool was used in creating this post.)
- EURJPY remains under near-term bearish pressure, trading below key EMAs.
- The 14-day Relative Strength Index hovers near 36, edging toward oversold territory.
- The currency cross is testing its symmetrical triangle's lower boundary near 183.50.
EUR/JPY extends its losses for the third successive day, trading around 183.60 during the Asian hours on Wednesday. The currency cross is extending a corrective phase below the short- and medium-term Exponential Moving Averages (EMAs), which keeps the near-term bias bearish despite intraday stabilization. The cross is capped by the session Volume-Weighted Average Price (VWAP) near 184.28 and the nine-period EMA around 184.62, while the 50-period EMA higher up at 184.99 reinforces the overhead supply zone.
The 14-day Relative Strength Index (RSI) hovers near 36, edging toward oversold territory and hinting that downside momentum may be losing some intensity even as price remains pressured beneath these trend indicators.
The EUR/JPY cross is currently testing the lower boundary of a symmetrical triangle around 183.50, a critical inflection point where buyers are attempting to defend support and spark a bounce back toward the upper descending resistance line. However, a failure to hold this level would signal buyer exhaustion, allowing sellers to fully take control of the cross's broader structure.
The intraday dynamics heavily favor the bears, as the price is currently trading below the session VWAP. This positioning gives the average seller the upper hand. If the price attempts to bounce, institutional sellers are highly likely to supply liquidity right at this VWAP level to exit at "fair value," making it a formidable intraday ceiling to break.
When looking at the daily pattern alongside Wednesday's price action, the market appears to be in the middle of a breakdown attempt fueled by aggressive shorting. A confirmed bearish breakdown will trigger if the price stays below the VWAP and breaks the triangle's rising support line on a surge of volume. Conversely, if buyers step in aggressively and reclaim the 184.28 level, it would signal a strong intraday reversal, meaning the dip was likely just a trap to clean out stop-losses. Until the EUR/JPY cross can regain that VWAP level, the immediate bias remains skewed to the downside.
(The technical analysis of this story was written with the help of an AI tool.)
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.15% | 0.07% | -0.02% | 0.03% | 0.17% | 0.33% | 0.08% | |
| EUR | -0.15% | -0.08% | -0.17% | -0.13% | 0.02% | 0.15% | -0.06% | |
| GBP | -0.07% | 0.08% | -0.09% | -0.04% | 0.09% | 0.20% | 0.00% | |
| JPY | 0.02% | 0.17% | 0.09% | 0.05% | 0.18% | 0.31% | 0.09% | |
| CAD | -0.03% | 0.13% | 0.04% | -0.05% | 0.14% | 0.25% | 0.06% | |
| AUD | -0.17% | -0.02% | -0.09% | -0.18% | -0.14% | 0.12% | -0.10% | |
| NZD | -0.33% | -0.15% | -0.20% | -0.31% | -0.25% | -0.12% | -0.21% | |
| CHF | -0.08% | 0.06% | -0.01% | -0.09% | -0.06% | 0.10% | 0.21% |
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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
- EUR/USD attracts some follow-through sellers for the third straight day amid a bullish USD.
- Rising Fed rate hike bets and mixed US-Iran messages push the USD to over a one-year high.
- Oversold conditions on the 4-hour chart warrant caution before positioning for further losses.
The EUR/USD pair drifts lower for the third straight day – also marking the fifth day of a negative move in the previous six – and drops to over a one-year low during the Asian session on Wednesday. Spot prices currently trade around the 1.1365 area, down nearly 0.15% for the day, and seem vulnerable to slide further amid a bullish US Dollar (USD).
Traders have ramped up expectations that the US Federal Reserve (Fed) will hike interest rates by the end of this year to combat sticky inflation. Furthermore, mixed US-Iran messages over Tehran's nuclear program keep geopolitical risk premiums in play, lifting the USD Index (DXY), which tracks the Greenback against a basket of currencies, to a 13-month high. This overshadows the European Central Bank's (ECB) hawkish stance and turns out to be a key factor exerting pressure on the EUR/USD pair.
From a technical perspective, the recent repeated failures to find acceptance above the 100-period Simple Moving Average (SMA) on the 4-hour chart and a breakdown below the 1.1500 psychological mark favor bearish traders. Meanwhile, momentum indicators remain depressed. In fact, the Relative Strength Index (14) is lingering in oversold territory near 21, and the Moving Average Convergence Divergence (MACD) histogram is still negative, suggesting persistent downside pressure.
That said, the deeply oversold RSI and negative but stabilizing MACD readings hint that sellers may soon face fatigue, making it prudent to wait for some near-term consolidation or a modest bounce before positioning for further losses. Any attempted recovery, however, might continue to face stiff resistance near the 100-day SMA at 1.1544 . The EUR/USD pair would need to reclaim this level to ease the current downward pressure and shift the near-term bias in favor of bullish traders.
(The technical analysis of this story was written with the help of an AI tool.)
EUR/USD 4-hour chart
US Dollar Price Last 7 Days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 2.16% | 1.78% | 0.81% | 1.58% | 2.36% | 3.16% | 2.19% | |
| EUR | -2.16% | -0.38% | -1.49% | -0.58% | 0.20% | 0.97% | 0.03% | |
| GBP | -1.78% | 0.38% | -1.04% | -0.19% | 0.59% | 1.39% | 0.40% | |
| JPY | -0.81% | 1.49% | 1.04% | 0.89% | 1.65% | 2.47% | 1.48% | |
| CAD | -1.58% | 0.58% | 0.19% | -0.89% | 0.77% | 1.57% | 0.60% | |
| AUD | -2.36% | -0.20% | -0.59% | -1.65% | -0.77% | 0.79% | -0.19% | |
| NZD | -3.16% | -0.97% | -1.39% | -2.47% | -1.57% | -0.79% | -0.97% | |
| CHF | -2.19% | -0.03% | -0.40% | -1.48% | -0.60% | 0.19% | 0.97% |
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).
- Gold attracts some follow-through selling as rising Fed rate hike bets continue to boost the USD.
- Easing inflationary concerns fail to impress bullish traders or lend any support to the commodity.
- The bearish technical setup backs the case for further losses as the focus shifts to the US PCE data.
Gold (XAU/USD) drifts lower for the second straight day – also marking the fifth day of a negative move in the previous six – and drops to a nearly two-week low during the Asian session on Wednesday. Despite easing inflationary concerns in the face of the recent fall in Crude Oil prices, traders have been pricing in a greater chance of a rate hike by the US Federal Reserve (Fed). This, in turn, pushes the US Dollar (USD) to a fresh high since May 2025 and turns out to be a key factor that continues to drive flows away from the non-yielding bullion.
Crude Oil prices have fallen significantly over the past month or so and touched a fresh low since early March this Wednesday amid the resumption of traffic through the Strait of Hormuz. In fact, an Iranian military source told Fars news agency that a limited number of vessels are being allowed to pass through the strait each day under coordination with Iran’s Revolutionary Guards Navy. Furthermore, the US Treasury Department issued a temporary 60-day sanctions waiver that authorizes the production, delivery, and sale of Iranian crude oil, petroleum, and petrochemical products. This eases global supply concerns and continues to weigh on Oil prices, helping alleviate upstream pressure on consumer inflation.
Nevertheless, investors have significantly upped their bets that the US central bank will raise borrowing costs by at least 25 basis points (bps) in 2026 following the Fed's hawkish signal last week. Nine of the Fed's 19 committee members believed that they would need to raise the policy rate to combat inflation. Adding to this, the new Fed Chair, Kevin Warsh, focused strongly on price stability during the post-meeting press conference, suggesting that the central bank might not rush to cut interest rates even in the face of declining growth. Moreover, mixed US-Iran messages on Tehran's nuclear issues act as a tailwind for the Greenback, which is seen as another factor exerting downward pressure on the Gold price.
US Vice President JD Vance said on Monday that peace talks in Switzerland had resulted in Iran agreeing to invite inspectors from the International Atomic Energy Agency (IAEA) to its nuclear facilities. Moreover, US President Donald Trump said that Iran had "fully and completely" agreed to the highest level of nuclear inspections long into the future. However, Iran's state media, citing the foreign ministry, reported that Tehran had made no new commitments on nuclear inspections. This keeps geopolitical risk premiums in play, favoring the USD bulls and backing the case for deeper losses for the Gold. Traders now look to the US Personal Consumption Expenditures (PCE) Price Index, due on Thursday, for a fresh impetus.
XAU/USD 4-hour chart
Gold bears might now aim to retest YTD low, around $4,024-$4,023
Against the backdrop of the recent repeated failures near the 100-period Simple Moving Average (SMA) on the 4-hour chart, a convincing break and acceptance below the $4,100 mark could be seen as a fresh trigger for the XAU/USD bears. Moreover, momentum indicators are weak, with the Relative Strength Index (RSI) hovering near oversold territory around 31, while the Moving Average Convergence Divergence (MACD) stays in negative territory with a declining line. This, in turn, suggests that downside risks remain dominant even if occasional short-covering bounces emerge and backs the case for a decline toward retesting the year-to-date low, around the $4,024-$4,023 area, touched earlier this month.
On the topside, the 100-period SMA at $4,287.33 is the first meaningful resistance, and a sustained recovery above this barrier would be needed to ease the prevailing bearish bias and open the door to a more constructive consolidation phase. Until then, any approach toward the $4,280-$4,290 region is likely to be treated as an opportunity to re-establish selling interest while momentum signals fail to show a durable bullish reversal.
(The technical analysis of this story was written with the help of an AI tool.)
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named 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 during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
- USD/CHF reached a seven-month high of 0.8107 on Wednesday.
- The US Dollar rises due to robust domestic economic data alongside a complex, mixed geopolitical landscape.
- The SNB raised its inflation forecast and reaffirmed its readiness to intervene in forex markets to curb Franc strength.
USD/CHF extends its gains for the sixth successive day, reaching a seven-month high of 0.8107 during the Asian hours on Wednesday. The pair rises as the Greenback strengthens on the complex Middle East situation. Traders will likely observe the Swiss ZEW Survey – Expectations for June and the Q2 SNB Quarterly Bulletin due later in the day.
US President Donald Trump stated that Iran had "fully and completely" agreed to open its facilities to nuclear inspections, while Iranian Foreign Minister Abbas Araghchi quickly tempered expectations by clarifying that substantive nuclear negotiations have not actually begun.
Additionally, Iran’s chief negotiator issued a stern warning that the strategic Strait of Hormuz will never return to its pre-war status and will remain firmly under Iranian oversight. Meanwhile, diplomatic efforts showed signs of progress elsewhere as Washington hosted a fresh round of talks between Israel and Lebanon, aimed at securing a ceasefire with Iran-backed Hezbollah.
June’s flash estimate for the US S&P Global Composite Purchasing Managers’ Index (PMI) climbed to 52.2, comfortably beating May’s reading of 51.5 and signaling healthy business expansion. The US manufacturing sector showed remarkable resilience, with output jumping to 55.7 from the previous month's 55.1, easily outperforming forecasts of 54.8. Simultaneously, the Services PMI printed at 51.3, ticking up from May's 50.7 and clearing the consensus estimate of 51.0, proving that demand in the broader service economy remains incredibly sticky.
The CME FedWatch tool indicates that the markets adjusted expectations for a more hawkish stance from the Federal Reserve (Fed). Traders are now pricing in a nearly 86.1% chance of a Fed hike in December, up from 61% before last week’s FOMC meeting.
The Swiss National Bank (SNB) kept its policy rate at 0% for the fourth straight meeting in June, maintaining its current stance, which continues to support both price stability and economic growth. However, the central bank raised its inflation forecast and reaffirmed its readiness to intervene in the foreign exchange markets to curb the Franc’s strength.
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 reached a fresh 13-month high of 101.45 on Wednesday.
- The Greenback gains ground due to robust domestic economic data alongside a complex, mixed geopolitical landscape.
- The US S&P Global Composite PMI climbed to 52.2, beating May's 51.5 and signaling healthy business expansion.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, holds ground for the third consecutive day and is trading near a fresh 13-month high of 101.45 during the Asian hours on Wednesday.
The Greenback gains ground on a combination of robust domestic economic data and a complex, mixed geopolitical landscape. Traders are carefully navigating conflicting signals regarding a potential United States (US)-Iran diplomatic breakthrough. While US President Donald Trump stated that Iran had "fully and completely" agreed to open its facilities to nuclear inspections, Iranian Foreign Minister Abbas Araghchi quickly tempered expectations by clarifying that substantive nuclear negotiations have not actually begun.
Additionally, Iran’s chief negotiator issued a stern warning that the strategic Strait of Hormuz will never return to its pre-war status and will remain firmly under Iranian oversight. Meanwhile, diplomatic efforts showed signs of progress elsewhere as Washington hosted a fresh round of talks between Israel and Lebanon, aimed at securing a ceasefire with Iran-backed Hezbollah.
On US data, strong macroeconomic indicators that reinforced the narrative of "US exceptionalism." June’s flash estimate for the US S&P Global Composite Purchasing Managers’ Index (PMI) climbed to 52.2, comfortably beating May’s reading of 51.5 and signaling healthy business expansion.
The US manufacturing sector showed remarkable resilience, with output jumping to 55.7 from the previous month's 55.1, easily outperforming forecasts of 54.8. Simultaneously, the Services PMI printed at 51.3, ticking up from May's 50.7 and clearing the consensus estimate of 51.0, proving that demand in the broader service economy remains incredibly sticky. The US May Personal Consumption Expenditures (PCE) Price Index (PCE) data will take center stage later on Thursday.
According to the CME FedWatch tool, markets adjusted expectations for a more hawkish stance from the Federal Reserve (Fed). Traders are now pricing in a nearly 86.1% chance of a Fed hike in December, up from 61% before last week’s FOMC meeting.
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.
- USD/CAD softesn to near 1.4205 in Wednesday’s Asian session.
- Iran’s Pezeshkian said no negotiation on ballistic missiles.
- Traders raise their bets on a US rate hike this year.
The USD/CAD pair edges lower to around 1.4205 during the Asian trading hours on Wednesday. Nonetheless, the potential downside for the pair might be limited amid rising expectations of a Federal Reserve (Fed) rate hike this year. The US May Personal Consumption Expenditures (PCE) Price Index (PCE) data will take center stage later on Thursday.
Iran’s President Masoud Pezeshkian said on Tuesday that Tehran’s ballistic missile program will not be included in negotiations with the United States (US), per BBC.
US President Donald Trump rebuffed Iran’s claim that no visit has been scheduled for International Atomic Energy Agency (IAEA) inspectors, insisting Tehran had already agreed to the arrangement. Uncertainty surrounding US-Iran peace deal could support the US Dollar (US) against the Canadian Dollar (CAD).
Markets adjusted expectations for a more hawkish stance from the Fed, lifting the Greenback. Traders are now pricing in nearly a 86.1% chance of a Fed hike in December, up from 61% before last week’s FOMC meeting, according to the CME FedWatch tool.
The Bank of Canada (BoC) Governor Tiff Macklem said on Tuesday that global imbalances of financial flows, led by China's export surplus and the reliance of the United States on foreign capital, and may be fuelling financial stability risks."
The Loonie has been on the backfoot for several weeks with well-documented reasoning of widening yield differentials in favor of the USD, slowing growth, trade uncertainty or the uneasy status quo and a mostly asymmetric risk response to the Iran war," said Amo Sahota, director at Klarity FX in San Francisco.
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
- AUD/JPY experiences volatility amid cooling Australian inflation.
- Australia's annual CPI rose 4.0% while monthly prices fell 0.7%, both slowing much faster than markets expected.
- JPY defense prompts government intervention and rate hike momentum, highlighting building pressures for a tighter monetary policy.
AUD/JPY remains steady after six days of losses, trading around 0.6920 during the Asian hours on Wednesday. The currency cross moves little as the Australian Dollar (AUD) experiences minor volatility following the release of Australia’s Consumer Price Index (CPI) data.
Australian inflation slowed more than anticipated in May, offering some relief to policymakers. According to the Australian Bureau of Statistics, the annual Consumer Price Index (CPI) rose by 4.0% year-over-year, down from 4.2% in the previous month and lower than the 4.4% market consensus. On a monthly basis, consumer prices actually fell by 0.7%, a sharp reversal from the prior month's 0.4% increase and a softer reading than the forecasted 0.3% decline. Meanwhile, the Reserve Bank of Australia’s (RBA) preferred core inflation metric, the Trimmed Mean CPI, ticked up 0.4% for the month and rose 3.6% on an annual basis.
Over in Japan, momentum is building for tighter monetary policy just as government officials step up warnings to protect a weakening Japanese Yen (JPY). Japan’s Chief Cabinet Secretary Minoru Kihara stated that authorities will take appropriate action against excessive foreign exchange volatility if necessary. This stance was underscored by a high-level call between Japanese Finance Minister Satsuki Katayama and US Treasury Secretary Scott Bessent, keeping the market on high alert for official Yen-buying operations.
The Bank of Japan’s (BoJ) Summary of Opinions from its June meeting showed that a majority of board members supported raising the policy interest rate, noting that inflation risks are broadening and the underlying CPI is sustainably approaching its 2% target.
As a result of these conflicting forces, the upside for the AUD/JPY cross remains firmly capped. The combination of cooling Australian inflation, which dampens the need for higher RBA rate hikes, and heightened fears of direct currency intervention by Japanese authorities has prompted traders to handle the currency cross with extreme caution.
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.Last release: Wed Jun 24, 2026 01:30
Frequency: Monthly
Actual: 4%
Consensus: 4.4%
Previous: 4.2%
Source: Australian Bureau of Statistics
Australia’s Consumer Price Index (CPI) rose by 4.0% year-over-year (YoY) in May, compared to a 4.2% increase reported in the previous reading, the latest data published by the Australian Bureau of Statistics (ABS) showed on Wednesday.
The market consensus was for 4.4% growth in the reported period.
The monthly Consumer Price Index came in at -0.7% in May, compared to the previous reading of a 0.4% increase, softer than the expectation of a 0.3% decline.
The RBA Trimmed Mean CPI for May rose 0.4% and 3.6% on a monthly and and annual basis, respectively. Meanwhile, the RBA weighted median CPI arrived at 0.4% MoM in May. On an annual basis, the RBA weighted median CPI rose 3.6% YoY during the same period.
AUD/USD reaction to Australia's Consumer Price Index data
The Australian Dollar (AUD) edges slightly higher following the Australia's CPI report. The AUD/USD pair is gaining 0.08% on the day to trade at 0.6922 at the press time.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.07% | 0.07% | 0.00% | -0.01% | -0.04% | 0.12% | 0.06% | |
| EUR | -0.07% | -0.00% | -0.07% | -0.09% | -0.11% | 0.02% | -0.01% | |
| GBP | -0.07% | 0.00% | -0.09% | -0.11% | -0.11% | 0.01% | -0.02% | |
| JPY | 0.00% | 0.07% | 0.09% | -0.01% | -0.05% | 0.08% | 0.03% | |
| CAD | 0.00% | 0.09% | 0.11% | 0.01% | -0.03% | 0.08% | 0.08% | |
| AUD | 0.04% | 0.11% | 0.11% | 0.05% | 0.03% | 0.12% | 0.07% | |
| NZD | -0.12% | -0.02% | -0.01% | -0.08% | -0.08% | -0.12% | -0.04% | |
| CHF | -0.06% | 0.01% | 0.02% | -0.03% | -0.08% | -0.07% | 0.04% |
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 Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
This section below was published at 22:30 GMT on Tuesday as a preview of the Australia’s CPI inflation report.
- 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.)
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.
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