Forex News
- USD/CAD holds gains as the Canadian Dollar weakens despite higher oil prices.
- WTI price rises as Middle East tensions escalated following retaliatory strikes between Israel and Iran.
- Eurozone Sentix Investor Confidence improved to -13.4 in June from May's -16.4.
EUR/CAD inches higher after registering over 0.5% losses in the previous day, trading around 1.6070 during the European hours on Monday. The currency cross gains some ground as the commodity-linked Canadian Dollar (CAD) struggles despite higher oil prices.
WTI price rose due to renewed Middle East tensions after Israel and Iran exchanged strikes. The Guardian reported that air raid sirens sounded in Tel Aviv, following the attack from Yemen. The retaliatory attacks from Yemen, whose military force, the Houthis, is backed by Iran, reflect that conflicts in the Middle East have started again.
Earlier, the BBC reported that the Israel Defense Forces (IDF) reportedly struck military targets in Iran following an Iranian missile salvo aimed at northern Israel. This escalation occurred despite US President Donald Trump's criticism of previous Israeli strikes in Beirut and his active push for a diplomatic resolution between Prime Minister Netanyahu and Tehran.
The downside of the Canadian Dollar (CAD) could be restrained due to stronger-than-expected domestic employment data. In May, Canada’s economy added 88,000 jobs, significantly exceeding economic forecasts. This robust labor market performance has reinforced expectations that the Bank of Canada (BoC) may keep interest rates elevated for a longer period than previously anticipated.
On the data front, the Eurozone’s Sentix Investor Confidence data, a key indicator of Investor morale, improves to -13.4 in June from -16.4 in May. Germany’s Factory Orders dropped by 3.8% in April after rising by a revised 4.5% in March. Data missed the estimated 1.2% decrease. On an annual basis, orders increased by 1.6% year-over-year (YoY) in April, as against the previous rise of 4.5% (revised from 5.0%).
Commerzbank’s Rainer Guntermann says a 25-basis-point hike by the European Central Bank (ECB) on Thursday is almost certain and fully priced, marking the first increase since September 2023. He expects no back-to-back move in July, viewing that as premature, but looks for another hike in September. Lower Oil prices should then ease inflation, preventing restrictive policy and opening scope for rate cuts in 2027.
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.
UOB’s Quek Ser Leang and Lee Sue Ann flag that AUD/USD posted its second-largest one‑day loss of the year, dropping toward 0.7040. Near term, the pair may test 0.7020, though a sustained break below is seen as unlikely. Over a 1–3 week horizon, they expect further weakness toward 0.7000, while resistance is now around 0.7080/0.7105.
Australian Dollar under sustained pressure
"24-HOUR VIEW: After our expectation for AUD to test 0.7120 did not materialise on Thursday, we highlighted the following on Friday: “AUD did not quite test 0.7120, as it dipped to 0.7123, rebounded to 0.7148 before closing little changed at 0.7133 (+0.08%). Despite the relatively quiet price action, lingering downward momentum suggests AUD could test and potentially break below 0.7120. Resistance is at 0.7140 and 0.7150.” Our view of a lower AUD was not wrong, as after it rose to 0.7144, it then staged a dramatic decline that reached a low of 0.7038. The outsized drop appears excessive, but there is a chance for AUD to test 0.7020. A sustained drop below this level is unlikely, and the next support at 0.7000 is also unlikely to come into view. Resistance is at 0.7060, followed by 0.7080."
"1-3 WEEKS VIEW: Our most recent narrative was from last Thursday (04 Jun, spot at 0.7135), when we highlighted that “there has been a tentative increase in downward momentum, and if AUD breaks and holds below 0.7120, it could lead to a drop to 0.7095.” While our view of a weaker AUD was correct, we did not anticipate the steep sell-off on Friday that reached a low of 0.7038. AUD closed at 0.7043, down by a whopping 1.27%. The price action suggests that AUD could weaken to 0.7000. We will maintain this view as long as 0.7105 (‘strong resistance’ level was at 0.7165 last Friday) is not breached."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- The Euro hovers right above 1.1500, consolidating losses after a 0.75% sell-off on Friday.
- Eurozone Sentix Confidence Index and German Factory Orders depict a grim economic outlook.
- Growing tensions in the Middle East have boosted Oil prices, adding pressure on the common currency.
The Euro (EUR) consolidates losses against the US Dollar (USD) on Monday, trading at 1.1515 at the time of writing, following a 0.75% sell-off on Friday. A mix of higher Oil prices, as tensions in the Middle East simmer, growing hopes of Federal Reserve (Fed) rate hikes, and downbeat Eurozone data has created a perfect storm for the common currency at the week's opening.
The Eurozone Sentix Investors’ Confidence Index improved to -13.4 in June from -16.4 in May, but remains at deeply negative levels, hinting at a dismal investors' mood and below the levels around zero, seen before the US-Israel attack on Iran and the ensuing blockade of the Strait of Hormuz.
Earlier on the day, German Industrial Orders dropped 3.8% in April, more than three times the 1.2% drop anticipated by the market consensus. Beyond that, March figures have been revised down to a 4.5% increase from the previous 5.0% estimate.
Higher Oil prices add pressure on the Euro
In the geopolitical domain, Iran-backed Houthi Militias confirmed attacks on Israel, after Tel Aviv announced that they targeted military sites in Iran, in retaliation for a new barrage of missiles launched towards northern Israel. Iranian authorities have threatened US bases in Gulf countries in the most serious escalation of the hostilities since Washington and Tehran signed a fragile ceasefire in mid-April.
The escalating tensions have sent Oil prices nearly $5 higher, as the barrel of Brent Crude rises to $96.37 at the time of writing, from Friday’s close of $92. These prices pose significant pressure on oil-importing Eurozone economies and weigh heavily on speculative demand for the Euro.
On Friday, the US Labour Statistics Office revealed that Nonfarm Payrolls rose by 172K in May, beating expectations of an 85K rise, while April’s figures were upwardly revised to 179K from previous estimates of a 115K increase. These numbers confirm that employment creation is gathering pace in the US in 2026, after a weak 2025 year, and boost hopes that the Federal Reserve will tighten its monetary policy later this year, which has sent the US Dollar higher across the board.
Economic Indicator
Sentix Investor Confidence
With among 1600 financial analysts and institutional investors, the Sentix Investor Confidence is a monthly survey which shows the market opinion about the current economic situation and the expectations for the next semester. The index, released by the Sentix GmbH, is composed by 36 different indicators. Usually, a higher reading is seen as positive for the Eurozone, that means positive, or bullish, for the Euro, While a lower number is seen negative or bearish for the unique currency.
Read more.Last release: Mon Jun 08, 2026 08:30
Frequency: Monthly
Actual: -13.4
Consensus: -
Previous: -16.4
Source: Sentix
Economic Indicator
Factory Orders s.a. (MoM)
The Factory orders released by the Deutsche Bundesbank is an indicator that includes shipments, inventories, and new and unfilled orders. An increase in the factory order total may indicate an expansion in the German economy and could be an inflationary factor. It is worth noting that the German Factory barely influences, either positively or negatively, the total Eurozone GDP. A high reading is positive (or bullish) for the EUR, while a low reading is negative.
Read more.Last release: Mon Jun 08, 2026 06:00
Frequency: Monthly
Actual: -3.8%
Consensus: -1.2%
Previous: 5%
Source: Federal Statistics Office of Germany
Societe Generale analysts say USD/JPY has rebounded after defending a multi‑month ascending trend line around 155.50/155.00 and is now challenging the April high. Support is seen at 159.20, with projections at 161.20 and 162. They add that a widening 2‑year UST/JGB spread above 270bp keeps USD/JPY on an upward trajectory despite potential BoJ tightening.
BoJ hike unlikely to cap rally
"USD/JPY defended the multi-month ascending trend line around 155.50/155 resulting in a steady rebound. It is now challenging the April high."
"A brief pullback cannot be ruled out; however, the last week’s low around 159.20 could be first layer of support. Defence of this may lead to persistence in uptrend. The pair may gradually head towards next projections at 161.20 and the peak of 2024 at 162."
"Spot bid above 160, 2y UST/JGB out to 277bp. Support 159.20, resistance 161.20."
"The 2y UST/JGB accelerated above 270bp after NFP, keeping USD/JPY on an upward trajectory. The central bank/MoF must now follow up verbal intervention with action at a high cost and pickings are slim as dollar sales over the past month have demonstrated."
"The BoJ will in all likelihood also raise rates by 25bp to 1.0% next week, the lower end of the neutral range, but is confronted by a currency battle it can’t win if the market view is for higher Fed funds rate."
"Pension fund proxies bought record ¥3.16tn ($19.7bn) foreign bonds in May. 1Q GDP revised down to 1.8% ann."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
According to the Fars news agency, Iran’s Revolutionary Guards Corps (IRGC) has confirmed attacking a petrochemical site in northern Israeli city of Haifa, in retaliation for Israel’s attack on a similar plant in Iran, The Guardian reported.
“We warn you; by taking action against civilian targets and targeting oil industries, the Zionist enemy has started a dangerous game, the scope of which will encompass all energy targets in the region, and its consequences for the global economy are the responsibility of the main arsonist in this field, the United States,” the IRGC said.
Market reaction
No responsive action seen in the Oil price, following IRGC's retaliation against Israel's attacks on Iranian petrochemical site. Still, the WTI Oil price trades 4.76% higher to near $92.80 as of writing.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
The Indian Rupee (INR) is receiving a notable boost following the Reserve Bank of India's (RBI) monetary policy meeting on Friday, when policymakers unanimously decided to hold the benchmark repo rate steady at 5.25%. While maintaining a neutral stance, the central bank and the government introduced a comprehensive, coordinated package of capital flow measures designed to attract foreign investment and shore up external balances.
Still, major financial institutions note that structural inflation risks driven by food and energy costs loom large, indicating that a shift toward future policy tightening is likely on the horizon.
Targeted capital flow tools provide immediate relief for the Rupee
Analysts at OCBC highlight that the RBI's decision to maintain status quo on rates was paired with a comprehensive set of administrative actions. These temporary mechanisms – ranging from concessional foreign exchange swaps to broader access for foreign institutional investors – are expected to lift market sentiment and fortify India's balance of payments over the near term, even as domestic inflation challenges continue to brew.
These steps are incrementally positive for India’s balance of payments and could lift market sentiment, providing near-term support to INR. That said, our economists still expect cumulative tightening of 50bp in FY27.
Coordinated fiscal and monetary measures anchor foreign capital inflows
Strategists at Commerzbank observe that the combined efforts of the RBI and the government successfully lowered the USD/INR exchange rate following the policy announcement. By expanding the Fully Accessible Route for long-term bonds and slashing taxes for international buyers, authorities have prioritized policy flexibility while remaining data-dependent to curb emerging price pressures.
RBI appears comfortable remaining on hold for now, but rising inflation risks suggest the next move is more likely to be a hike than a cut. We continue to expect the RBI to raise rates by 25bp before year-end, possibly in October.
Banks anticipate a supportive near-term consolidation phase for the Rupee
These banks anticipate a supportive near-term trend for the Indian Rupee. OCBC and Commerzbank agree that the newly introduced capital flow and tax exemption packages will offer a vital floor for the currency, successfully anchoring the INR against immediate external uncertainties and attracting sustainable foreign capital.
However, both institutions indicate that this near-term stability is backstopped by an expectation of interest rate hikes later in the year, ranging from a 25-to-50-basis-point increase, as policymakers act to buffer the Rupee against escalating global energy costs.
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Rabobank strategists Molly Schwartz and Jane Foley highlight that USD net long futures positioning has more than quadrupled, reflecting resilient support for the Dollar. They note United States (US) Personal Consumption Expenditures (PCE) Price Index inflation broadly met expectations and JOLTS data point to a firm labor market. The OIS curve indicates markets expect no change at the June Fed meeting and one rate hike by year end.
Net longs surge as Fed seen hiking
"USD net long positions have more than quadrupled from 850 contracts to 3,758."
"The PCE price index for April registered a price increase of 0.4% m/m and 3.8% y/y—largely in line with expectations."
"However, JOLTS jobs data suggested a resilient labor market, though the trends were indicative of a “no hire, no fire” environment."
"The OIS curve suggest investors are positioned for a no change decision at the June Fed meeting, and one hike by year end. "
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Eurozone’s Sentix Investor Confidence data, a key indicator of Investor morale, improves to -13.4 in June from -16.4 in May.
There has been a slight negative response seen in EUR/USD, following the data release. During press time, EUR/USD trades 0.1% lower to near 1.1510.
What the improved Eurozone Sentix Investor Confidence data means for EUR/USD?
The Eurozone Sentix Investor Confidence data reflects the morale of investors in the old continent. The impact of the sentiment data is significant at a time when the world economy is facing energy supply crisis due to ongoing Middle East tensions.
This is the second straight month when the sentiment data has improved after a significant downturn in March and April.
According to the Eurozone Sentix Economic Index report, the pace of recovery in the sentiment data in old continent remains modest than in the United States (US) and Asia, with Germany remaining the weakest link in the chain. Such a scenario is unfavorable for the Euro (EUR).
Technical Analysis: EUR/USD continues to face pressure near 20-day EMA
EUR/USD trades lower at around 1.1510, extending its decline below recent ranges and maintaining a bearish near-term bias as it holds beneath the 20-day Exponential Moving Average (EMA) at 1.1623. The 20-day EMA setup suggests the pair remains pressured while it fails to reclaim this first dynamic barrier, and the Relative Strength Index (14) hovering near 33 hints at emerging oversold conditions rather than a clear reversal signal.
On the topside, initial resistance is located at the 20-day EMA around 1.1623, and a daily close above this level would be needed to ease immediate downside pressure and open the way for a deeper corrective bounce. Looking down, the pair could slide towards the March 13 low at 1.1411 if it fails to hold 1.1500.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
Sentix Investor Confidence
With among 1600 financial analysts and institutional investors, the Sentix Investor Confidence is a monthly survey which shows the market opinion about the current economic situation and the expectations for the next semester. The index, released by the Sentix GmbH, is composed by 36 different indicators. Usually, a higher reading is seen as positive for the Eurozone, that means positive, or bullish, for the Euro, While a lower number is seen negative or bearish for the unique currency.
Read more.Last release: Mon Jun 08, 2026 08:30
Frequency: Monthly
Actual: -13.4
Consensus: -
Previous: -16.4
Source: Sentix
- Gold adds to Friday’s upbeat US NFP-inspired losses and drops to a fresh low since March.
- Persistent geopolitical uncertainties continue to underpin demand for the safe-haven USD.
- Inflationary concerns fuel hawkish Fed bets and further weigh on the non-yielding bullion.
Gold (XAU/USD) maintains its offered tone through the first half of the European session on Monday and currently trades just below the $4,300 mark – the lowest since March 23. Renewed hostilities in the Gulf push Crude Oil prices higher, fueling inflationary concerns and bolstering bets for more hawkish central banks. This, in turn, is seen as a key factor undermining demand for the non-yielding bullion. The downfall validates Friday's breakdown below a technically significant 200-day Simple Moving Average (SMA), setting the stage for an extension of a nearly two-month-old downtrend.
The Israel-Iran conflict has entered a dangerous new phase, with both sides exchanging attacks across multiple fronts. Israel said that it carried out fresh strikes on military targets in western and central Iran after the latter fired waves of ballistic missiles at Israel’s Ramat David air base on Sunday night. The tensions have spilled beyond the two countries, with reports of Israeli strikes in southern Lebanon and Iranian military action in northern Iraq, raising fears of a wider regional conflict. The developments threaten a fragile ceasefire and temper hopes for a deal to end a three-month-old war, assisting the safe-haven US Dollar (USD) to preserve its recent strong gains to a two-month high.
Adding to this, the upbeat US Nonfarm Payrolls (NFP) report released on Friday reaffirmed bets that the US Federal Reserve (Fed) will keep interest rates higher for longer. In fact, the US jobs data showed that the economy added 172K new jobs in May, compared to 85K estimated and the previous month's upwardly revised reading of 179K. Additional details revealed that the Unemployment Rate held steady at 4.3%, as anticipated, offsetting the widely expected slowdown in Average Hourly Earnings growth to the 3.4% YoY rate from 3.6% in April. Traders were quick to react and are now pricing in over a 70% chance that the Fed will raise borrowing costs by the end of this year.
The outlook, in turn, is seen as another factor acting as a tailwind for the Greenback, suggesting that the path of least resistance for the Gold price remains to the downside. Moving ahead, there isn't any relevant market-moving economic data due for release from the US on Monday, leaving the USD and the precious metal at the mercy of incoming geopolitical headlines. Later this week, traders will take cues from the US inflation figures – the Consumer Price Index (CPI) and the Producer Price Index (PPI) on Wednesday and Thursday, respectively. Apart from this, the Bank of Canada (BoC) rate decision and the European Central Bank (ECB) meeting should infuse volatility in the financial markets.
XAU/USD daily chart
Gold bears have the upper hand while below 200-day SMA and $4,300 break points
The XAU/USD pair keeps a bearish bias inside a downward parallel channel and below the 200-day SMA. Adding to this, the Moving Average Convergence Divergence (MACD) indicator sits in negative territory with a widening bearish profile. Meanwhile, the Relative Strength Index (RSI) around 33 suggests persistent downside pressure, though nearing oversold conditions that could slow immediate follow-through.
On the topside, initial resistance is located at the 200-day SMA at $4,436.56, with the channel’s upper boundary near $4,555.49 acting as a stronger cap while the broader downtrend persists. On the downside, the lower band of the descending channel around $4,242.07 offers initial support, and a clear break beneath this floor would open the door to a deeper corrective leg within the prevailing bearish structure.
(The technical analysis of this story was written with the help of an AI tool.)
US Dollar Price Last 30 days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 30 days. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.82% | 1.77% | 2.10% | 2.08% | 2.31% | 2.34% | 2.23% | |
| EUR | -1.82% | -0.08% | 0.30% | 0.27% | 0.41% | 0.50% | 0.40% | |
| GBP | -1.77% | 0.08% | 0.38% | 0.35% | 0.57% | 0.61% | 0.48% | |
| JPY | -2.10% | -0.30% | -0.38% | -0.03% | 0.05% | 0.18% | 0.16% | |
| CAD | -2.08% | -0.27% | -0.35% | 0.03% | 0.04% | 0.22% | 0.15% | |
| AUD | -2.31% | -0.41% | -0.57% | -0.05% | -0.04% | 0.14% | 0.00% | |
| NZD | -2.34% | -0.50% | -0.61% | -0.18% | -0.22% | -0.14% | -0.19% | |
| CHF | -2.23% | -0.40% | -0.48% | -0.16% | -0.15% | -0.01% | 0.19% |
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).
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