Forex News
- Gold struggles to gain any meaningful traction as the US-Iran uncertainty supports the USD.
- Fed hike bets remain on the table amid inflation risks stemming from rebounding oil prices.
- Hawkish Fed expectations should cap the commodity as traders await the US NFP report.
Gold (XAU/USD) edges higher during the Asian session on Tuesday, though it lacks follow-through as traders await further developments surrounding the Middle East crisis before placing fresh bets. Meanwhile, the uncertainty over US-Iran peace talks continues to act as a tailwind for the safe-haven US Dollar (USD). Furthermore, recovering crude oil prices keep inflation risks and US Federal Reserve (Fed) rate-hike bets on the table, helping the Greenback to build on the overnight bounce from its lowest level since mid-June and cap the non-yielding bullion.
On Monday, Iran denied that any negotiations were taking place with the US, sparking an angry backlash from President Donald Trump, who had cited the resumption of bilateral talks as justification for calling off attacks over the weekend. Moreover, Iran’s Islamic Revolutionary Guard Corps (IRGC) has reportedly attacked a US military base in Kuwait with at least three drones. This, in turn, tempers hopes for a diplomatic resolution to end a five-month-old US-Iran war, prompting traders to price in the geopolitical risk premium and supporting the safe-haven Greenback.
Meanwhile, a senior adviser to Iran's Supreme Leader, Mohsen Rezaee, dismissed Trump's claims that the Strait of Hormuz is on course to reopen. Rezaee further warned that Iran will not permit any unauthorised shipping route through the critical waterway other than the one designated by the Islamic Republic and that Tehran would target US warships for that purpose. This comes on top of the Iran-backed Houthi rebels' naval blockade against Saudi Arabia and fuel concerns regarding global energy supplies, helping oil prices to recover a part of the previous day's losses.
Investors remain worried that elevated energy prices would rekindle inflationary pressures and force the Fed to adopt a more hawkish stance. According to the CME Group's FedWatch Tool, traders are currently assigning over a 60% probability that the US central bank will raise borrowing costs in September and see over an 85% chance of a hike by the end of this year. The bets were reaffirmed by the US ISM PMI released on Monday, which showed that US manufacturing sector activity increased to the highest level in more than four years in July. This further favors USD bulls.
Traders, however, might refrain from placing aggressive directional bets and opt to wait for the release of the closely-watched US monthly employment details, popularly known as the Nonfarm Payrolls (NFP) report on Friday. The crucial data will be looked for more cues about the Fed's policy path, which, in turn, will play a key role in influencing the near-term USD price dynamics and providing some meaningful impetus to the Gold price. Nevertheless, the aforementioned fundamental backdrop suggests that the path of least resistance for the bullion is to the downside.
XAU/USD daily chart
Technical Analysis: Gold could attract fresh sellers at higher levels amid bearish setup
From a technical perspective, the XAU/USD pair holds well below the 200-day Simple Moving Average (SMA) and keeps a bearish near-term bias within a familiar range held over the past month or so. Moreover, the range-bound price action might still be categorized as a bearish consolidation phase against the backdrop of the recent decline, reaffirming the negative outlook for the Gold price.
Meanwhile, momentum indicators are not yet supportive of a clear recovery. The Moving Average Convergence Divergence (MACD) stays in positive territory with a modestly positive histogram, while the Relative Strength Index (RSI) at 46.48 hovers just below the neutral 50 line, hinting at lacklustre buying interest. This, in turn, suggests that bounces are likely to be capped by overhead supply.
The top boundary of the trading range, pegged ahead of the $4,200 mark, might continue to act as an immediate hurdle. A move beyond could lift Gold to the 200-day SMA near $4,490.33. Bulls would need to reclaim a technically significant barrier to alleviate the prevailing downside bias and reopen the path toward higher highs.
On the downside, immediate support is inferred from recent swing lows around the $3,976–$4,000 region, where buyers previously emerged. A daily close below would be seen as a fresh trigger for bearish traders and turn the XAU/USD pair vulnerable to declining further in the absence of clearly defined floors under the said handle.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
- Swiss CPI drops to 0.4%, signaling minimal energy cost pass-through.
- SNB Monetary policy projected to remain unchanged through the end of the year.
- Markets price in a 65% chance of a September 25-bps rate increase.
USD/CHF moves little after two days of gains, trading around 0.8100 during the Asian hours on Tuesday. The currency pair may appreciate further as the Swiss Franc (CHF) faces headwinds from easing domestic inflation.
Swiss CPI slowed to 0.4% in July, down from 0.5% in the previous month to hit its lowest level in four months. This slowdown underscores a limited pass-through from higher geopolitical energy prices, contrasting with the Swiss National Bank's (SNB) expectations of a modest near-term inflation pickup following its decision to hold policy rates at 0%.
Franc under pressure as SNB keeps rates at zero
Strategists at Brown Brothers Harriman highlight that "Swiss July CPI stays muted," underscoring the absence of inflationary pressure in the economy. In their view, the "bottom line" is that the SNB "has plenty of room to keep rates at 0.00% for some time, which is an ongoing drag for CHF." They note that against this backdrop of subdued price dynamics and a firmly anchored policy rate, "CHF is the worst performing G10 currency so far this quarter."
Looking ahead, the SNB is anticipated to keep borrowing costs unchanged through year-end; additional rate cuts remain a contingency plan rather than a base case, particularly given the absence of severe stress within the Swiss banking sector.
Meanwhile, price action in the pair remains muted as the US Dollar (USD) stabilizes amid ongoing diplomatic uncertainty. Tensions rose after US President Donald Trump characterized his offer for discussions with Iran as a "last chance," following his decision to call off a major military strike. Iranian leadership swiftly dismissed the proposal, with General Mohsen Rezaei, an advisor to Iran's Supreme Leader, rejecting the conditions and asserting that Iran will not permit a second corridor in the Strait of Hormuz.
Meanwhile, market participants are continuing to recalibrate their monetary policy expectations following the Fed's decision to hold interest rates steady in July. According to the CME FedWatch tool, traders are currently pricing in roughly a 65% probability of a 25-basis-point rate hike at the Federal Reserve's upcoming September meeting.
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.
- The Indian Rupee opens flat around 95.33 against the US Dollar in the countdown to the RBI policy.
- Investors expect the RBI to leave the Repo Rate unchanged.
- Financial markets await the outcome of US-Iran talks.
The Indian Rupee (INR) trades flat at around 95.33 against the US Dollar (USD) in the opening session on Tuesday. The Indian currency is expected to trade sideways as investors await the Reserve Bank of India’s (RBI) monetary policy announcement on Wednesday.
RBI seen holding rates with inflation still in target band
Analysts at Commerzbank note that the Reserve Bank of India is likely to maintain its current policy stance, with the central bank "expected to leave the benchmark repurchase rate unchanged at 5.25% at its next meeting on 5 August." They acknowledge that "inflation risks remain tilted to the upside due to higher global commodity prices and a weaker monsoon season," but point out that the latest June CPI report "showed it rose 4.4% YoY, which was within RBI's 2-6% target range," reinforcing the case for policy continuity in the near term.
Oil prices rise amid US-Iran deal uncertainty
Oil prices attract bids on Tuesday as financial markets remain concerned about the outcome of talks between the United States (US) and Iran. On Monday, US President Donald Trump said that discussions with Iran are going on, but he doesn’t know why they are denying it in the media. Trump added, “This is the last chance for them to sign a good document.” He further added, “They’re going to go quickly one way or the other. It’s not very complex. We’re talking about the opening of the strait, having it open literally by tomorrow—completely open,” Reuters reported.
Over the weekend, US President Trump shelved planned attacks on Iran, stating that Tehran has agreed to reopen the Strait of Hormuz and the nuclear conditions. This led to a significant plunge in oil prices.
In the opening session, the MCX Crude Oil contract expiring on August 19 trades 1.3% higher to near Rs. 7,745.
Higher oil prices bode poorly for currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs.
US JOLTS Job Openings data awaited
During the Asian session, the US Dollar clings to Monday’s recovery move, with investors awaiting the US JOLTS Job Openings data for June, which will be published at 14:00 GMT. US employers are expected to have posted 7.45 million fresh jobs, slightly lower than 7.594 million in May.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, reflects strength near 100.00.
This week, the major event for the US Dollar will be the US Nonfarm Payrolls (NFP) data for July, which will be released on Friday.
Technical Analysis: USD/INR remains under 20-day EMA
USD/INR trades at around 95.33, maintaining a bearish near-term bias as spot holds beneath the 20-day exponential moving average (EMA) at 95.7234.
The pair’s inability to reclaim this short-term EMA suggests upside remains capped, while the Relative Strength Index (14) at 44.18 leans slightly soft, hinting at waning bullish momentum rather than outright oversold conditions.
On the topside, immediate resistance is located at the 20-day EMA at 95.72, and a sustained break above this barrier would be needed for a more constructive recovery toward the July 29 high near 96.00. On the downside, major support levels are the July 7 low at 94.80 and the June low at 94.21.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Indian Rupee FAQs
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
- WTI gains some positive traction on Tuesday following the previous day’s bearish gap opening.
- The uncertainty over US-Iran peace talks and Hormuz risks acts as a tailwind for the commodity.
- The technical setup warrants caution before placing aggressive bullish bets on the black liquid.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – builds on the previous day's modest bounce from levels just below the mid-$77.00s and gains some follow-through positive traction during the Asian session on Tuesday. The commodity climbs to a fresh daily high in the last hour, with bulls now eyeing a move beyond the $80.00 psychological mark amid the uncertainty over US-Iran peace talks.
Iran denied that any negotiations were taking place with the US, sparking an angry backlash from President Donald Trump, who had cited the resumption of bilateral talks as justification for calling off attacks over the weekend. Adding to this, reported drone attacks on a US military base in Kuwait temper hopes for a deal between the US and Iran. Adding to this, the US-Iran standoff over the Strait of Hormuz fuels concerns regarding global energy supplies and pushes crude oil prices higher.
From a technical perspective, the bearish gap opening on Monday stalled ahead of the $76.60 confluence. The said area comprises the 50.0% Fibonacci retracement level of the move up witnessed in July and the 200-period Simple Moving Average (SMA) on the 4-hour chart. However, the Moving Average Convergence Divergence (MACD) indicator remains slightly negative, and the Relative Strength Index (RSI) hovers near 45, hinting at a lack of strong directional momentum for now.
Hence, any further move higher would face first resistance at the 38.2% Fibo. retracement at $82.64, ahead of the next barrier at the 23.6% retracement near $86.32, where profit-taking could emerge if the current recovery extends. On the downside, initial support is seen at the $76.65-$76.60 confluence. A convincing break below might shift the bias in favor of bearish traders and pave the way for a further near-term depreciating move.
WTI 4-hour chart
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- EUR/USD trades flat near 1.1505 in Tuesday’s early European session.
- Hot Eurozone inflation report adds to an already strong case for another ECB rate hike.
- Traders await the US JOLTS Job Openings data on Tuesday ahead of the July employment report.
The EUR/USD pair holds steady around 1.1505 during the early European trading hours on Tuesday. Markets remain cautious ahead of the US JOLTS Job Openings data, which is due on Tuesday. On Friday, the attention will shift to the crucial US July jobs report.
Eurozone inflation ticked up in July, bolstering the case for a rate hike from the European Central Bank (ECB). The headline Eurozone inflation rose to 2.9% YoY in July from 2.8% in June, in line with expectations, Eurostat data showed last week. Meanwhile, the core Eurozone inflation accelerated to 2.5% YoY in July versus 2.4% prior, above the consensus of 2.4%.
Financial markets are betting on more than two ECB rate hikes, with moves fully priced in by October and April, according to Reuters.
The US employment data will be the highlight later on Friday, which could offer some hints about the health of the labour market and US interest rate path. Economists expect Nonfarm Payrolls (NFP) to increase by 83,000 in July, while the Unemployment Rate is projected to rise to 4.3% during the same period. In case of stronger-than-expected outcomes, this could lift the Greenback in the near term.
Markets have priced in nearly a 64.7% chance of a US rate hike in September, down from about 77% before the July Fed meeting, according to the CME FedWatch tool.
Fed decision seen as key driver for EUR/USD direction into September
Strategists at ING emphasise that the path for EUR/USD in the coming weeks hinges largely on the Federal Reserve. They argue that “the bigger and more lasting driver of the EUR/USD trend will be the Fed's September decision,” which “remains unresolved,” leaving this week’s US data as a crucial catalyst. ING notes that the incoming figures will “have a big say if we end the week pressing 1.1615/20 resistance or trading back below 1.15,” underscoring how sensitive the pair remains to shifts in Fed expectations.
Technical Analysis: EUR/USD remains capped below the key 100-day SMA
In the daily chart, EUR/USD retains a bearish near-term bias as spot remains capped beneath the 100-day Simple Moving Average (SMA). Price holds above the 20-day Bollinger SMA, but proximity to the upper Bollinger band suggests upside attempts are constrained within a tightening volatility envelope. The Relative Strength Index (14) at 58.9 stays below overbought territory, hinting at fading bullish momentum rather than a decisive trend reversal.
On the topside, immediate resistance aligns with the upper Bollinger band near 1.1535, ahead of the more significant 100-day SMA barrier at 1.1570, which continues to define the broader bearish cap on the pair. On the downside, initial support emerges at the current price pivot zone around 1.1510, followed by the mid-Bollinger baseline at 1.1435, while a deeper slide would expose the lower Bollinger band support near 1.1335.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro 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 then its currency will gain in value 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.
- USD/IDR rises as the Indonesian Rupiah weakens under pressure from geopolitical instability and energy market volatility.
- Indonesia faces near-term twin-deficit risks, though downstream investments and export security initiatives should strengthen long-term resilience.
- Markets are pricing in a nearly 65% chance of a 25-basis-point Fed rate hike in September.
USD/IDR halts its four-day losing streak, trading around 18,090 during the Asian hours on Tuesday. The currency pair is gaining upward momentum as the Indonesian Rupiah (IDR) faces persistent pressure.
According to UOB economists Enrico Tanuwidjaja and Vincentius Ming Shen, Indonesia's external position remains particularly vulnerable to ongoing geopolitical instability and energy market volatility. While the nation's downstream nickel initiatives and industrialization efforts continue to bolster overall export performance, immediate energy security programs are unlikely to yield significant benefits until major domestic refinery projects are fully completed.
In the near term, Indonesia faces growing risks of a twin deficit as pressures build on both its current account and fiscal balance. However, the economists note that continued investment in downstream projects and export security initiatives could strengthen the country's structural resilience over the longer term.
The US Dollar (USD) holds ground against the Rupiah as diplomatic tensions remain high after US President Donald Trump described his latest offer of discussions as a "last chance" for Iran, following his decision to call off a major military strike. Trump expressed expectations that formal negotiations would begin shortly to secure the Strait of Hormuz and address long-standing US concerns over Iran's nuclear program.
Iranian leadership quickly dismissed the proposal. General Mohsen Rezaei, an advisor to Iran's Supreme Leader, firmly rejected the conditions, declaring that Iran will absolutely not permit a second corridor in the Strait. He further warned that any foreign warships or military forces deployed for that purpose would be targeted.
Traders continue to recalibrate their expectations following the central bank's decision to hold interest rates steady in July. According to the CME FedWatch tool, markets are currently pricing in approximately a 65% chance of a 25-basis-point rate hike at the Federal Reserve's (Fed) upcoming September meeting.
Williams sticks to higher-for-longer stance but market hawkishness eases
Fed’s Williams delivers a moderately hawkish message, with a 6/10 FXS Speechtracker score slightly above the 5.8/10 historical average, underscoring confidence that current rate policy is “well positioned” to achieve the 2% inflation goal. The repeated emphasis on acting if inflation drifts off track and on strong support for the latest FOMC decision reinforces a higher-for-longer bias, even as optimism about gradually easing inflation pressures and a cooling impact from Middle East risks tempers the tone. Acknowledgment of market pricing as “valuable information” but not binding, alongside limited concern over AI-related financial stability, signals policy patience rather than imminent adjustment.
The FXS Fed Sentiment Index slipped by 1.47 points to 146.76, indicating a modest pullback in perceived hawkishness despite remaining firmly above the neutral 100 mark. This keeps the Fed stance in clear hawkish territory, but the slight decline suggests markets see Williams’ remarks as a confirmation of the existing policy path rather than an escalation in tightening risks.
Gold prices rose in India on Tuesday, according to data compiled by FXStreet.
The price for Gold stood at 12,454.48 Indian Rupees (INR) per gram, up compared with the INR 12,429.86 it cost on Monday.
The price for Gold increased to INR 145,266.70 per tola from INR 144,979.40 per tola a day earlier.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 12,454.48 |
10 Grams | 124,545.10 |
Tola | 145,266.70 |
Troy Ounce | 387,370.40 |
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.)
- AUD/JPY attracts some buyers to around 110.70 in Tuesday’s early European session.
- The cross keeps a negative tone below the 100-day SMA, with bearish RSI momentum.
- The initial support level is seen at 110.40; the first upside barrier is located at 112.85.
The AUD/JPY cross trades in positive territory near 110.70, snapping the six-day losing streak, during the early European trading hours on Tuesday. However, the potential upside for the cross might be limited due to the coordinated intervention between the United States (US) and Japan, which could provide some support to the Japanese Yen (JPY) against the Australian Dollar (AUD).
"The view that FX intervention cannot have a lasting impact and merely alters short-term market flows seems right in many cases. However, depending on the circumstances and broader context, intervention can exert a significant influence on the market and trigger an inflection,” said Bank of America analyst Shusuke Yamada.
Japan and US step in to stabilise Yen after historic slide
Strategists at BNY note that Japan’s finance ministry and the US Treasury have “intervened in the foreign exchange market to support the yen” after the currency weakened to its lowest level against the Dollar since 1986. Japanese Finance Minister Satsuki Katayama is cited as saying the joint action was aimed at “countering excessive volatility and disorderly movements in recent months,” underscoring that Tokyo “would not hesitate to carry out further joint intervention if needed.” BNY concludes that the authorities have made it clear they “remain ready to defend the currency” should renewed pressure on JPY emerge.
Technical Analysis:
In the daily chart, AUD/JPY extends a corrective move below the 100-day simple moving average (SMA) and the Bollinger Bands 20-day middle band, which form a dense overhead supply zone. The pair is now drifting toward the lower Bollinger band support, while the Relative Strength Index (RSI) at 34.33 hovers just above oversold territory, hinting that bearish momentum remains in control but could be nearing exhaustion.
On the downside, immediate support is located at the lower Bollinger band near 110.40, where a pause or bounce could emerge if sellers take profits. The next contention level to watch is the 110.00 psychological level, followed by the August 3 low of 109.24.
On the topside, initial resistance is seen at the 100-day SMA at 112.85, followed by the Bollinger Bands middle band at 113.00; a daily close above these clustered barriers would be needed to ease the current bearish bias and open the way toward the upper Bollinger band near 115.62.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- USD/JPY rises to near 157.60 as the Japanese Yen faces profit booking.
- US-Japan joint intervention strengthened the Japanese Yen.
- Investors await key US JOLTS Job Openings data for June.
The Japanese Yen (JPY) trades lower against its major currency peers on Tuesday after a rare juggernaut outperformance in the last few trading days. In the Asian session, the Japanese currency is down 0.25% to near 157.60 against the US Dollar (USD).
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.00% | 0.07% | 0.27% | -0.01% | -0.25% | 0.12% | -0.02% | |
| EUR | 0.00% | 0.06% | 0.29% | -0.02% | -0.27% | 0.10% | -0.01% | |
| GBP | -0.07% | -0.06% | 0.23% | -0.07% | -0.32% | 0.05% | -0.07% | |
| JPY | -0.27% | -0.29% | -0.23% | -0.29% | -0.53% | -0.19% | -0.18% | |
| CAD | 0.00% | 0.02% | 0.07% | 0.29% | -0.24% | 0.11% | 0.00% | |
| AUD | 0.25% | 0.27% | 0.32% | 0.53% | 0.24% | 0.36% | 0.25% | |
| NZD | -0.12% | -0.10% | -0.05% | 0.19% | -0.11% | -0.36% | -0.10% | |
| CHF | 0.02% | 0.00% | 0.07% | 0.18% | -0.00% | -0.25% | 0.10% |
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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
The Asia-Pacific currency outperformed due to rare joint intervention by the United States (US) and Japan to support the Yen.
Japan and US step in as Yen hits weakest level since 1986
BNY notes that Japan’s finance ministry and the US Treasury have moved to shore up the Yen, jointly intervening in the foreign exchange market after the currency fell to its lowest level against the Dollar since 1986. Japanese Finance Minister Satsuki Katayama said the coordinated action was aimed at countering “excessive volatility and disorderly movements in recent months.” She underscored that Tokyo “would not hesitate to carry out further joint intervention if needed,” signaling that the authorities remain ready to defend the currency should renewed pressure emerge.
Meanwhile, the US Dollar (USD) holds onto its Monday’s recovery move, with investors awaiting key US economic data, notably the Nonfarm Payrolls (NFP), releasing this week. As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades firmly near 100.00.
In Tuesday’s session, investors will focus on the JOLTS Job Openings data for June, which will be published at 14:00 GMT. The US economy is expected to have posted 7.45 million fresh jobs, slightly lower than 7.594 million in May.
USD/JPY technical outlook
USD/JPY trades at around 157.58 at press time, retaining a bearish near-term bias as spot holds well below the 20-day exponential moving average (EMA) at 161.14. The chart structure of the pair reflects a Head and Shoulders pattern in the making, whose right shoulder is yet to be formed, likely near 160.00, suggesting a respite is highly likely after a juggernaut fall.
The pair has retreated from recent highs, and the Relative Strength Index (RSI) at 26.90 sits in oversold territory, which hints that downside momentum is stretched but does not yet show a clear reversal signal.
Going forward, a "Sell on Rise" strategy appears optimal in these conditions, and the round level of 160.00 would be a key barrier. After that, the pair might retest the neckline at around 155.10.
On the contrary, the pair would regain a bullish bias if it manages to extend the recovery above the July 16 low near 162.00. The pair would aim to revisit the multi-decade high at around 164.00 if it manages to break above 162.00.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- EUR/JPY may fall toward the immediate support at the eight-month low of 179.37.
- The 14-day Relative Strength Index at 32.97 signals dominant downside momentum.
- The initial resistance lies at the nine-day EMA at 183.62.
EUR/JPY gains ground after three days of losses, trading around 181.50 during the Asian hours on Tuesday. The currency cross is maintaining a bearish near-term tone as it holds beneath both the nine-day and 50-day Exponential Moving Averages (EMAs).
The EUR/JPY cross is retreating away from recent highs, while the 14-day Relative Strength Index (RSI) at 32.97 hovers just above oversold territory, hinting that downside momentum is still dominant but nearing stretched conditions.
The EUR/JPY cross may retest the initial support at the eight-month low of 179.37, reached on August 3. Further support lies at the nine-month low of 175.70.
On the upside, the EUR/JPY cross could rise toward the nine-day EMA at 183.62, followed by the 50-day EMA at 184.90. Further advances above these moving averages would cause a bullish emergence and support the currency cross to explore the region around the all-time high of 187.95, which was recorded on April 17.
Yen positioning seen shifting after Japan-US intervention
Strategists at Rabobank highlight that "JPY net shorts had climbed to their highest levels since 2024 last week," just before the "concerted intervention from the MoF and the US Treasury to stem the weakness in the JPY." The bank argues that this official action "suggests that positioning is likely to be sharply changed in the next data release," but cautions that "it is too early to assess whether Japan’s fundamentals have strengthened sufficiently to allow the JPY to hold better levels vs. the USD in the spot market over the medium-term."
(The story was corrected on August 4 at 03:45 GMT to say in the title that EUR/JPY rebounds from eight-month lows and not highs.)
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.04% | 0.03% | 0.24% | -0.04% | -0.32% | 0.03% | -0.08% | |
| EUR | 0.04% | 0.05% | 0.29% | -0.00% | -0.29% | 0.05% | -0.03% | |
| GBP | -0.03% | -0.05% | 0.23% | -0.05% | -0.33% | 0.00% | -0.08% | |
| JPY | -0.24% | -0.29% | -0.23% | -0.27% | -0.55% | -0.23% | -0.19% | |
| CAD | 0.04% | 0.00% | 0.05% | 0.27% | -0.28% | 0.06% | -0.03% | |
| AUD | 0.32% | 0.29% | 0.33% | 0.55% | 0.28% | 0.34% | 0.25% | |
| NZD | -0.03% | -0.05% | -0.01% | 0.23% | -0.06% | -0.34% | -0.08% | |
| CHF | 0.08% | 0.03% | 0.08% | 0.19% | 0.03% | -0.25% | 0.08% |
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).
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