Forex News
United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann note that USD/CNH is currently consolidating in a narrow range around 6.77. In their 1–3 week view, they maintain a downside bias toward 6.7600 as long as strong resistance at 6.7820 remains intact. Over 1–3 months, they see tentative upside potential if key technical resistance is broken.
Short-term consolidation, medium-term downside bias
"24-HOUR VIEW: After USD fell as we expected on Wednesday, we highlighted the following yesterday: “Our view was not wrong, as USD subsequently rose to 6.7781 and then fell to a low of 6.7653. Downward momentum continues to increase, and today, there is a chance for USD to test 6.7600. To keep the momentum going, USD must hold below 6.7780 (minor resistance is at 6.7720).” Our expectation did not materialise, as USD traded in a quiet manner between 6.7649 and 6.7753, closing little changed at 6.7734 (+0.07%). The current price movements are likely part of a consolidation phase, which is expected to be between 6.7670 and 6.7780."
"1-3 WEEKS VIEW: Two days ago (15 Jul, spot at 6.7720), we highlighted that “downward momentum is increasing, and USD is likely to trade with a downside bias toward 6.7600.” We will continue to hold the same view as long as 6.7820 (no change in ‘strong resistance’ level) is not breached."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
DBS Group Research economist Ma Tieying analyzes the latest Bank of Korea (BoK) decision, noting a hawkish shift as the base rate is raised to 2.75%. The report now anticipates a faster tightening cycle, with the policy rate reaching 3.25% by year-end 2026. Growth is expected to benefit from the AI-driven semiconductor sector, while Consumer Price Index (CPI) inflation is projected to overshoot target.
BoK signals accelerated tightening cycle
"The Bank of Korea raised the base rate to 2.75% from 2.50% at its July 16 meeting, marking the first rate hike since January 2023. The BOK maintained a hawkish stance and signaled that further rate increases are likely, although it provided no guidance on the timing of future moves."
"The BoK’s hawkish messaging suggests that the rate hike cycle could proceed faster than we previously anticipated. We had expected a total of 50bps of hikes in 2H26 (one in 3Q and one in 4Q)."
"We now expect a cumulative 75bps increase in 2H26, implying two additional 25bps hikes over the remaining three policy meetings this year (August, October, and November), bringing the policy rate to 3.25% by year-end."
"We do not expect significant upside surprises in real GDP growth during 2H26, as the current AI boom is likely to boost semiconductor export prices and corporate profitability more than export volumes or industrial output."
"However, we expect CPI inflation to continue rising and overshoot the BoK’s target, reaching around 3.5% YoY in 2H26, as energy cost pass-through effects persist and stronger export revenues and corporate profits translate into higher wages and demand-driven inflation pressures."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Silver refreshes YTD low, keeping bearish structure firmly intact.
- RSI remains bearish, signaling path of least resistance lower.
- Break below $54.39 exposes $48.64; reclaiming $60 eases pressure.
Silver price recovered some ground on Friday, up 0.84%, but it is poised to finish the week down over 6.50%. At the time of writing, XAG/USD trades at $56.00 per troy ounce, after reaching a new year-to-date (YTD) low of $54.77.
XAG/USD Price Forecast: Technical Outlook
The white metal ended the week on the back foot as XAG failed to reclaim the $60.00 psychological barrier, which could’ve opened the door for a recovery and challenged the July 6 high at $63.28. Nevertheless, the downward market structure remains intact, and after refreshing yearly lows, it could open the door to testing the November 13, 2025, daily high-turned-support at $54.39.
Momentum remains downward-biased as depicted in the Relative Strength Index (RSI). Hence, the path of least resistance is tilted to the downside.
The first support is $55.00. Below lies the November 13, 2025, daily high-turned-support at $54.39, followed by the November 21, 2025 swing low of $48.64. On the other hand, if XAG/USD reclaims the $60.00 mark, expect a move towards the July 6 swing high at $63.28. On further strength, the next resistance would be $65.00, followed by the 50-day SMA at $68.01.
XAG/USD Price Chart — Daily
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Commerzbank’s Dr. Henry Hao argues China’s housing market remains in structural stagnation five years after the Evergrande crisis. National prices follow an L-shaped path, with a K-shaped divergence between Tier-1 and lower-tier cities. Weak demand, tighter funding and demographics mean real estate will no longer be China’s primary growth engine as Beijing redirects capital to new sectors.
L-shaped prices, fractured construction cycle
"China's property downturn marks its fifth anniversary in July 2026. Despite localized price stabilization in top tier cities, the national housing market remains locked in stagnation. Our analysis of the construction cycle indicates structural stagnation will persist as Beijing pivots toward new growth drivers."
"Real estate investment sits at just 53 percent of its July 2021 peak. Housing starts have plummeted to a mere 24 percent of their former levels, guaranteeing the sector will remain an economic drag. Housing completions show relative resilience at 55 percent, but this is entirely policy driven."
"Beijing's policies aim to manage the decline rather than spark a major rebound. Authorities have lowered mortgage rates, reduced down payments, and encouraged local governments to buy unsold homes. Yet, structural constraints limit these impacts."
"Crucially, this structural downsizing is locked in by demographic forces. The historic wave of rural to urban migration has effectively crested, and declining birth rates shrink the pool of first-time buyers. Compared to historical crises, China is mirroring Spain's long digestion period rather than a rapid rebound."
"The era of real estate as a primary growth engine is definitively over. Consequently, Beijing has shifted capital toward new productive forces, such as green technology, electric vehicles, and advanced industrial equipment."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- US-Iran tensions lift safe-haven demand for the Greenback.
- Chip-stock selloff and Oil risks weigh on market sentiment.
- Mexico inflation, jobs and Retail Sales drive next catalyst.
The Mexican Peso loses traction against the Greenback, dropping over 0.65% during Friday’s North American session as the American currency benefits due to its safe-haven appeal as the US-Iran conflict is far from ending, despite holding talks to finish the war. The USD/MXN trades at 17.53, after bouncing off a daily low of 17.41.
USD/MXN rises as Oil risks revive Dollar and Fed support
Market sentiment deteriorated amid a sell-off on chip stocks. The rise in Oil prices fueled speculation that the Federal Reserve could hike rates and narrow the interest rate differential, which favoured the Mexican Peso, as it began its appreciation cycle early in 2025.
Benign US inflation data was cheered by investors, which trimmed the odds of a Fed rate hike at the September meeting. However, the US and Iran are poised to continue fighting for the Strait of Hormuz, which could trigger another leg-up in Oil prices.
On Friday, the University of Michigan (UoM) revealed that US consumers are slightly more optimistic about current economic conditions and the outlook. The Consumer Sentiment Index in July increased from 50.7 to 54, while short- and medium-term inflation expectations eased.
The US Dollar Index (DXY), which measures the American currency's performance against a basket of six peers, rises modestly by 0.05% to 100.76, a tailwind for the USD/MXN exotic pair.
Meanwhile, Fed officials crossed the wires. Cleveland Fed President Beth Hammack was hawkish, expressing concern about persistent high inflation, which is at the top of her list, and saying, “Inflation is too high.” Hammack added that the labor market is solid and that “growth numbers are good and consumer spending is stable.”
In Mexico, the economic docket was absent, but the next week will feature the release of Retail Sales, employment data, and inflation for the first fifteen days of July. In the US, the schedule will feature jobs data and S&P Global Flash PMIs, as Federal Reserve officials entered their blackout period ahead of the July 29 policy meeting.
USD/MXN Price Forecast: Technical outlook
In the daily chart, USD/MXN trades at 17.5333, holding above the clustered 50/100/200-day simple moving averages (SMA) around 17.3856, which suggests a constructive near-term bias as the pair remains supported by its broader trend floor. Price is now testing the latest downward-sloping resistance trend line coming from the 18.1651 high, with that barrier emerging at 17.5456, while the Relative Strength Index (14) near 54.8 hints at mildly positive momentum without yet reaching overbought territory.
On the topside, immediate resistance is located at the near-term descending trend line at 17.5456, followed by a higher structural cap at the longer-term downward resistance drawn from 21.0808, currently coming in near 18.1200. On the downside, initial support is provided by the triple SMA cluster at 17.3856, and a sustained hold above this moving-average base would keep the bullish bias intact, whereas a daily close back below it would signal fading upside pressure and expose a deeper corrective phase.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Mexican Peso FAQs
The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
Scotiabank’s Shaun Osborne and Eric Theoret note USD/JPY is little changed despite strong verbal intervention from Finance Minister Katayama, who warned of decisive action at any time. Markets remain unimpressed, given repeated rhetoric and limited impact from actual Yen buying. They recall recent data showing a significant sentiment shift toward the Japanese Yen among local retail FX traders, who may be more attuned to intervention risks.
Katayama warnings and intervention expectations
"The JPY is little changed despite Finance Minister Katayama deploying aggressive verbal intervention in its support earlier."
"Katayama threatened “decisive action at any time”. That ranks as one of the strongest warnings of impending intervention action in recent weeks."
"But markets are unimpressed, reflecting the frequency of verbal intervention and the ineffectiveness of actual yen buying."
"Recall, however, that recent data reflected a very significant sentiment shift in favour of the yen among local, Japanese retail FX traders who may have a sense of intervention risks."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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