Forex News
- Gold jumps above $4,600, heading for strong weekly gain.
- Strong US services data fails to halt Bullion momentum.
- Fed hike odds rebound, but US Dollar weakness supports Bullion.
Gold price hits a three-month high and is poised to end the week with gains of over 5.6%, even though business activity in the services sector in the US was solid. Recent developments in the Middle East and a softer US Dollar underpin the yellow metal, which has surpassed the $4,600 threshold. The XAU/USD trades at $4,622, up over 2.3%.
XAU/USD hits three-month high despite strong US services data
The US S&P Global Services PMI in August exceeded estimates of 54 to reach 56.8, the highest since December 2024, and crushed the previous month's 54.6 print. However, not all is good news: the Manufacturing PMI slowed from 53.9 to 53.2, a five-month low.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a statement. “US business is booming, with firms reporting the fastest output growth for over four years so far in the third quarter as the expansion picked up further momentum in August.”
The data was mostly ignored by investors, who continued to digest the bond buyback plan of the US Treasury. Scott Bessent, the US Treasury Secretary, said "an increased focus on fiscal consolidation,” will be the administration's next strategy.
Bessent added that the government could further expand Treasury buybacks, a day after the department unveiled plans to double buybacks of longer-dated securities.
In the meantime, the US Dollar Index, which tracks the buck’s performance against a basket of six currencies, is somewhat flat near 98.82 but fails to cap the non-yielding metal´s advance.
US Treasury yields have resumed their advance. The US 10-year T-note yield is up 0.8% at 4.75%.
Poland's central bank slowed Gold buying to 7.8 metric tons in July, data showed on Friday.
Money markets had priced in a 60% chance that the Federal Reserve (Fed) would hold rates unchanged at the September meeting, down from 68% a day ago. The odds for a 25-basis-point rate hike remaining near 40%, revealed Prime Terminal.
XAU/USD technical outlook: Gold buyers eye $4,700 as rally extends
Gold’s trend shifted higher as buyers reclaimed the 200-day Simple Moving Average (SMA) at $4,514, thereby exacerbating a rally above $4,600. Momentum remains bullish as depicted in the Relative Strength Index (RSI). This means Bullion could extend its gains in the near term.
The XAU/USD first resistance is the $4,650 psychologcail level, ahead of $4,700. Once those two levels are taken out, the next stop would be the May 8 high of $4,749, followed by $4,800.
If Gold tumbles below $4,600, the first support is the 200-day SMA at $4,514, ahead of $4,500. Below the next support is the 100-day SMA at $4,379, ahead of $4,300. Below this area, the next support is the 50-day SMA at $4,164.
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.
- EUR/USD heads for a fourth consecutive weekly gain despite erasing its earlier intraday advance.
- The pair holds above all key daily moving averages, keeping the near-term outlook bullish.
- Positive MACD momentum supports buyers, although an overbought RSI warns of a possible pullback.
EUR/USD heads for a fourth consecutive weekly gain on Friday, although it has erased its earlier intraday advance. At the time of writing, the pair trades around 1.1682 after briefly rising above 1.1700, its highest level since May 14.
Strategists at Scotiabank note that the “solid gains in the EUR this week largely reflect a broadly lower USD.” They add that “front-end spreads have narrowed considerably since the end of June, supporting the fundamental improvement in the EUR in recent weeks.” From a technical perspective, Scotiabank describes the near-term tone as “bullish—EUR secured a clear extension through the 1.1625/50 zone which has strengthened the prospect of gains pushing on to the mid/upper-1.17s in the short run.”
From a technical perspective, the near-term outlook remains bullish as EUR/USD has reclaimed the 50-day, 100-day and 200-day Simple Moving Averages (SMAs) in recent weeks. These averages are clustered between roughly 1.1475 and 1.1631, although momentum indicators suggest that the latest advance is becoming stretched.
The Moving Average Convergence Divergence (MACD) indicator remains in positive territory, pointing to constructive momentum. However, the Relative Strength Index (RSI) stands near 73, signalling overbought conditions that could limit immediate upside.
On the topside, initial resistance emerges at the horizontal barrier near 1.1700, ahead of the 1.1800 mark. On the downside, initial support is provided by the 200-day SMA around 1.1631, followed by the 100-day SMA at 1.1573 and the 50-day SMA near 1.1475. A deeper pullback could expose the horizontal floor at 1.1400.
(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 Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.01% | -0.11% | -0.02% | -0.21% | -0.89% | -0.63% | 0.11% | |
| EUR | 0.01% | -0.10% | -0.02% | -0.23% | -0.89% | -0.60% | 0.11% | |
| GBP | 0.11% | 0.10% | 0.09% | -0.13% | -0.77% | -0.52% | 0.21% | |
| JPY | 0.02% | 0.02% | -0.09% | -0.19% | -0.86% | -0.63% | 0.12% | |
| CAD | 0.21% | 0.23% | 0.13% | 0.19% | -0.68% | -0.41% | 0.30% | |
| AUD | 0.89% | 0.89% | 0.77% | 0.86% | 0.68% | 0.26% | 0.99% | |
| NZD | 0.63% | 0.60% | 0.52% | 0.63% | 0.41% | -0.26% | 0.75% | |
| CHF | -0.11% | -0.11% | -0.21% | -0.12% | -0.30% | -0.99% | -0.75% |
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).
Commerzbank economists Christoph Balz and Ralph Solveen expect the Ifo Business Climate Index to slip from 86.6 to 86.0 in August as renewed Iran war concerns and higher energy prices weigh on expectations. They note sentiment remains fragile despite limited impact on current activity so far, and warn that supply chain issues from low river levels could add pressure, even as “hard” data stay relatively resilient.
Ifo expectations deteriorate while activity holds
"The Ifo Business Climate Index is likely to have fallen again in August, as hopes held by some a month ago for a swift end to the war in Iran were dashed and energy prices have once again risen significantly. In the short term, however, the more important question is whether these pressures are also reflected in the assessment of the current business situation."
"Next week, the Ifo Business Climate Index will once again provide a snapshot of sentiment among German companies. We expect sentiment to have deteriorated somewhat, with the index falling from 86.6 in July to 86.0 in August. This is because many companies were likely still influenced by the interim agreement between the U.S. and Iran – and the resulting sharp drop in energy prices – when they responded to the July survey."
"By now, however, many are likely looking to the future with renewed skepticism, so anything other than a decline in business expectations would be a (positive) surprise. Supply chain issues resulting from low river levels could also contribute to this."
"In our view, what is more interesting than expectations is how companies assess the current business situation. The corresponding subcomponent of the business climate has, on balance, hardly changed since the start of the war in Iran – just as it did the year ago – suggesting that the impact of higher energy prices on companies’ operations has so far been limited. We assume that nothing significant has changed in this regard in August either, but the uncertainty here is significantly greater than with expectations."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- DXY trades just beneath 99.00, its weakest level since May.
- Yields fully retrace Wednesday's decline while the Dollar retraces none.
- Gold above $4,550 and Bitcoin up more than 20% on the week.
The Dollar Index trades just beneath 99.00 and unchanged on the session, with the entire day fitting inside 35 pips between the 98.50 area and a high that stopped a shade short of the handle. That leaves the index at its weakest since May, at the end of a week in which US long-end yields went up rather than down.
A currency whose government bonds are repricing to higher yields is supposed to attract capital rather than repel it, and for most of this cycle the Dollar Index has traded exactly that way. This week broke the arrangement in both directions. The index fell hard on the day the Treasury tried to force yields lower, then took none of it back when the market forced them straight up again.
Both branches of the fiscal trade sell the Dollar
Wednesday's announcement doubling liquidity-support buybacks in longer-dated coupons, from 2 billion Dollars an operation to at least 4 billion, knocked nine basis points off the thirty-year and took the Dollar Index down close to a point in a single session. By Thursday the bond move had fully reversed, with the thirty-year back above 5.25% and the ten-year above 4.70%. The currency reversed nothing.
Read the two sessions together and the driver names itself. A yield decline engineered by the issuer does not reward the currency, because it is an admission that the natural clearing level sits higher. A yield increase driven by 40 trillion Dollars of federal debt, a deficit tracking past 2 trillion Dollars and a wave of corporate borrowing for artificial intelligence (AI) infrastructure does not reward it either. Both branches price the same risk premium.
Rate expectations are not carrying the weight either, with futures putting September hike odds near a third against a peak above 80% in late July. The Dollar Index lost ground through that entire repricing and has kept losing it since, while the front end moved a fraction of what the long end did this week. A currency that ignores both the level of yields and the path of policy is being priced on something else.
The growth print that bought 35 pips
The preliminary August composite Purchasing Managers Index (PMI) printed 56 against a 54.5 prior, the strongest reading on the series since April 2022, with services at 56.8 against a 54 consensus and the sharpest expansion in that sector since December 2024. Manufacturing missed at 53.2 against 53.9, with goods output at a 13-month low, but services carry roughly three quarters of the economy. That is a domestic growth surprise of the kind that normally reprices the front end and lifts the currency with it.
What it bought instead was a run into the 99.00 handle that the index could not hold. A currency that cannot keep a bid on the strongest domestic activity reading in more than four years is no longer trading its own economy. It is trading who is willing to fund it, and at what price.
Everything that is not the Dollar is bid
Gold trades above $4,550 and at its highest since early June, back through its 200-day moving average. Bitcoin is on track for a weekly gain of more than 20%. Long-end Treasury yields sit at or near their highest in almost two decades. Those three moves share one reading, and it is not a story about the American growth cycle.
The Fed chair's Jackson Hole keynote on Friday is where that reading gets tested. A committee that has held five consecutive times, carries three dissenters wanting a quarter point and has watched market rates do part of its work has every incentive to sound hawkish. Hawkish talk that lifts yields without lifting the Dollar would confirm this week's message rather than reverse it.
Next week does the repricing
July Personal Consumption Expenditures (PCE) prices land Wednesday at 12:30 GMT, with core expected at 0.2% MoM against a 0.1% prior and 3.3% YoY unchanged, alongside preliminary second-quarter Gross Domestic Product (GDP) at 1.5%, personal spending at 0.2% and July durable goods at 0.7%. August consumer confidence prints Tuesday at 14:00 GMT.
The Jackson Hole symposium runs August 27-29, and Friday packs the rest of the week into a single minute. At 14:00 GMT the Fed chair speaks, the preliminary nonfarm payrolls benchmark revision lands and final August Michigan sentiment prints, with one-year inflation expectations running at 4.3% into it. A benchmark revision that subtracts materially from the payrolls base would do more to this currency than anything said from the podium.
Dollar Index technicals
Resistance: The 99.00 handle capped the session high and is the first line back. Above it sit 99.50 and then the moving-average band, the 200-day Exponential Moving Average (EMA) just beneath 99.75 and a declining 50-day at the 100.00 handle, with the late-June peak just above 101.75 the ceiling of the year.
Support: The 98.50 area held the session low, with 98.00 beneath it and the May trough just above 97.50 as the floor of the range.
Bias: Bearish beneath the moving-average band. The 50-day is rolling over toward a 200-day that price has already lost, which is the setup for a bearish crossover rather than a base, and the daily Stochastic Relative Strength Index (Stoch RSI) beneath 20 has produced no bounce across two sessions. Objectives the 98.50 area then 98.00. Invalidation on a daily close back above 99.75.
DXY daily chart
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/CHF holds firm as the US Dollar shows signs of stabilizing near three-month lows.
- SNB policymaker Petra Tschudin keeps the door open to negative interest rates.
- US fiscal concerns and fading Fed rate-hike bets weigh on the US Dollar outlook.
USD/CHF holds firm on Friday as the US Dollar (USD) trims its intraday losses. At the time of writing, the pair trades around 0.8013 after slipping to 0.7949 on the previous day, its lowest level since June 17. Despite the modest recovery, USD/CHF remains on track to close the week in negative territory.
Meanwhile, dovish remarks from Swiss National Bank (SNB) Governing Board member Petra Tschudin dampen sentiment toward the Swiss Franc (CHF). Tschudin told Swiss newspaper Finanz und Wirtschaft in an interview published on Friday, “Should it become necessary to lower interest rates below zero to keep inflation between 0% and 2% in the medium term, then we’ll do so.” She also linked the Franc’s weakness to higher interest-rate expectations abroad.
The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, trades around 98.81, recovering from an intraday low of 98.56. However, the index remains close to a three-month low and is heading for a weekly loss of nearly 0.80%.
Data released on Friday showed that the preliminary S&P Global Composite PMI rose to a 52-month high of 56.0 in August from 54.5, while the Services PMI climbed to a 20-month high of 56.8 from 54.6. The Manufacturing PMI eased to a five-month low of 53.2 from 53.9.
The Greenback weakened against its G10 peers earlier this week after the US Treasury announced that it would double its liquidity-support buybacks for longer-dated government securities to at least $4 billion per operation. Strategists at Scotiabank argue that the currency remains the primary shock absorber for mounting US fiscal concerns, noting that “at this point, we still think that efforts to suppress long-term yields mean that the USD will bear a greater—negative—burden from US fiscal policy concerns.”
Fading expectations of a Federal Reserve (Fed) interest-rate hike also weigh on the US Dollar. According to the CME FedWatch Tool, markets see around a 65% probability that the central bank will leave interest rates unchanged next month following softer US employment and inflation data for July. Attention now turns to next week’s US Personal Consumption Expenditures (PCE) inflation data.
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.
Deutsche Bank Research, led by Sanjay Raja and Maui Brennan, highlights the United Kingdom (UK) economy’s surprising resilience to the Iran-related energy shock in 2026. Gross Domestic Product (GDP) grew 0.6% q-o-q in Q1 and 0.4% in Q2, making the UK the fastest-growing G7 economy. Softer inflation, strong household spending, robust business investment and stockpiling support Deutsche Bank’s view that 2026 GDP could exceed its 1.1% forecast.
Growth beats expectations despite energy shock
"But after a thumping Q1-26, where GDP growth outshot forecaster expectations, rising by 0.6% q-o-q, Q2-26 GDP growth didn’t disappoint either. For a second straight quarter, the UK economy outshot forecasters’ expectations, expanding by 0.4% q-o-q. To be sure, the UK is now the fastest growing economy in the G7 so far this year, with the economy growing at an annualised pace of 2%."
"And yet again, forecasters will have been left revising up their projections with more upside risks brewing around 2026 GDP forecasts. Crucially, the recent upside in growth begs the question: why has the economy been so resilient in spite of the Iran energy shock? Indeed, household spending shot up by 0.85% in H1-26."
"Big picture, UK GDP continues to show more resilience than many expected. Summer survey data have already outshot our own expectations, with the latest PMI data pointing to a firming in activity (the August flash composite index jumped to 52.5 from 52.2). And we now see more upside to our H2-26 growth projections, particularly in Q3-26."
"A strong carry-over effect, plus sustained momentum could see GDP push a tenth higher to 0.2% q-o-q (our current projection has GDP growth projected at 0.1% q-o-q in Q3 and Q4)."
"All in all, while we see GDP growth tracking at 1.1% this year, there’s some upside risk brewing. Risks are skewed to yet another upward revision in the coming months."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- NZD/USD is up for the week and trading near a three-month high.
- Soft US data has trimmed bets on a Federal Reserve hike, pulling the US Dollar and Treasury yields lower.
- Sunday's New Zealand Retail Sales report is the next test.
The New Zealand Dollar (NZD) extends its rally against the US Dollar (USD) on Friday, trading near 0.6000 and close to its highest level since end-May.
Flash S&P Global PMIs released on Friday showed private-sector activity accelerating, led by a strong Services reading that beat expectations, though Manufacturing slipped and missed forecasts. Yet the upbeat data failed to lift the US Dollar, suggesting the Kiwi’s advance is being driven by its own momentum rather than a Federal Reserve (Fed) rethink.
China left its benchmark lending rates unchanged, offering some reassurance for currencies exposed to Chinese demand, including the Kiwi. Metals are strongly bid, with Gold and Silver both sharply higher on the day, and the Australian Dollar is set for its longest weekly winning streak since 2020. That risk-on tone tends to lift higher-beta currencies like the New Zealand Dollar, and the Kiwi is riding it.
The 0.6000 area is the immediate barrier, with the 2026 high a little above it. A failure to hold the 0.5900 region would take the wind out of the current push. After a run this steep, the pair needs a fresh reason to clear the round number rather than stall beneath it.
Short-term technical analysis:
In the daily chart, NZD/USD trades at 0.5979, retaining a bullish near-term bias as price holds above both the 20-day and 100-day simple moving averages (SMAs) at 0.5876 and 0.5837, respectively. The pair is pressing against nearby overhead supply, with initial resistance emerging at the horizontal barrier around 0.5989, while the Relative Strength Index (14) hovers near 69, suggesting momentum is strong but verging on overbought conditions.
On the downside, immediate support is seen at the clustered horizontal levels around 0.5939, 0.5930 and 0.5907, which protect the recent advance before deeper demand appears at the 20-day SMA near 0.5876 and the 100-day SMA at 0.5837. On the topside, a clear break above 0.5989 would open the door for further gains, although more distant resistance is only indicated far higher at 5,954, leaving the focus on how price reacts to the current cap just shy of the 0.6000 handle.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Iranian President Masoud Pezeshkian stated that “It would be better to end the war today, when we have power and dignity, and with the whole world acknowledging our victory,” according to a Bloomberg report on Friday.
Although he is the top elected leader, his role is limited to domestic economic policy.
The Middle East conflict seems far from ending in the short term, as US Treasury Secretary Scott Bessent is expected to escalate economic pressure on Iran.
Iranian officials, some closer to the Islamic Revolutionary Guard Corps (IRGC), suggest that Iran is winning the war and that they should continue the fight that began in late February.
Market’s reaction
Oil price dipped from session highs after Pezeshkian's remarks, but it recovered quickly.
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.
TD Securities’ Robert Both expects the Bank of Canada to remain cautious even if a tariff agreement is reached. The Bank wants more data on how lower tariffs affect exports and output, with key trade figures not available until November. TD forecasts the BoC staying on hold through 2026 and delivering its first rate hike in January despite a narrowing output gap.
BoC seen patient despite easing trade risks
"We look for the Bank of Canada to proceed cautiously even if this deal is finalized by Saturday."
"The Bank will want to see more data on the impact of lower tariffs, which won't be available until November."
"We continue to look for the Bank to stay on hold through 2026 before hiking in January."
"The Bank of Canada has been heavily focused on trade tensions as a dovish risk to its outlook, stating as recently as June that "significant new trade restrictions on Canada" could force it to cut rates again."
"Even if we can't rule out further spillovers from high oil prices, the backdrop of excess supply should allow the Bank of Canada to stay patient and see how exports respond."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- The Japanese Yen benefits from an acceleration in Japan’s underlying inflation in July, strengthening expectations of higher interest rates in Japan.
- Manufacturing activity in the Eurozone and Germany surprises to the upside in August, providing support to the Euro.
- Diverging signals on both sides of the pair keep EUR/JPY virtually unchanged around 185.70 on Friday.
EUR/JPY trades around 185.70 on Friday at the time of writing, virtually unchanged on the day. The Japanese Yen (JPY) gains some support from firmer Japanese inflation data, but the move is offset by resilience in the Euro (EUR) following better-than-expected activity indicators in the Eurozone.
In Japan, the core Consumer Price Index (CPI), which excludes fresh food, rises 1.8% YoY in July, following a 1.6% increase in June. This marks its fastest pace of growth since January. A measure excluding volatile components also points to persistent inflationary pressures, accelerating from the previous month.
These figures reinforce expectations that the Bank of Japan (BoJ) could continue normalizing its monetary policy. Firmer underlying inflation could give the central bank more room to raise interest rates, a prospect that supports the Japanese Yen and limits the upside in EUR/JPY.
However, the resilience of the Euro prevents the pair from declining significantly. In the Eurozone, the preliminary HCOB Manufacturing Purchasing Managers Index (PMI) rises to 52.8 in August from 51.9 previously, beating expectations of 51.8. The Services PMI remains unchanged at 51.7, slightly above the 51.5 forecast, while the Composite PMI improves to 52.1 from 52, also exceeding the market consensus of 51.7.
German data paint a more mixed picture, although the sharp improvement in the manufacturing sector stands out. Germany’s Manufacturing PMI jumps to 54.1 in August, its highest level in 51 months, from 52.2 previously and above the 52 expected. In contrast, the Services PMI falls to 48.5 from 49.8, while economists had expected a return to expansion territory at 50.1. Germany’s Composite PMI consequently eases to 51 from 51.3, missing expectations of 51.3.
EUR/JPY therefore remains caught between opposing forces on Friday. Growing expectations of further monetary policy normalization in Japan support the Japanese Yen, while the positive surprise from European manufacturing activity underpins the Euro, leaving the pair broadly balanced around 185.70.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.04% | -0.08% | -0.08% | -0.17% | -0.85% | -0.64% | 0.07% | |
| EUR | 0.04% | -0.04% | -0.06% | -0.16% | -0.82% | -0.58% | 0.11% | |
| GBP | 0.08% | 0.04% | -0.02% | -0.12% | -0.77% | -0.56% | 0.14% | |
| JPY | 0.08% | 0.06% | 0.02% | -0.10% | -0.78% | -0.58% | 0.14% | |
| CAD | 0.17% | 0.16% | 0.12% | 0.10% | -0.69% | -0.46% | 0.23% | |
| AUD | 0.85% | 0.82% | 0.77% | 0.78% | 0.69% | 0.21% | 0.92% | |
| NZD | 0.64% | 0.58% | 0.56% | 0.58% | 0.46% | -0.21% | 0.72% | |
| CHF | -0.07% | -0.11% | -0.14% | -0.14% | -0.23% | -0.92% | -0.72% |
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).
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
