Forex News
- Gold remains on the defensive as traders move to the sidelines ahead of the FOMC decision.
- A modest USD downtick supports the commodity, though the upside potential seems limited.
- Recovering oil prices revive inflation fears, boost Fed hike bets, and cap the precious metal.
Gold (XAU/USD) enters a bearish consolidation phase after touching an over one-week low during the Asian session on Wednesday, though it manages to hold above the $4,000 psychological mark. A softer tone surrounding the US Dollar (USD) offers some support to the precious metal. However, a fresh escalation of tensions between the US and Iran should limit the downside for the Greenback. Furthermore, traders might opt to wait for the outcome of a two-day FOMC meeting for more cues about the path of US interest rates, which will influence the USD demand and provide some meaningful impetus to the non-yielding yellow metal.
In the latest developments surrounding the Middle East crisis, Iran's Islamic Revolutionary Guard Corps (IRGC) launched a surprise attack and targeted US forces in the Middle East with multiple ballistic missiles late Tuesday. All Iranian missiles were successfully intercepted, the US Central Command (Centcom) said in a post on X, and added that US forces remain vigilant and at a high state of readiness. In a subsequent statement, Centcom said that the US and Saudi forces struck multiple terrorist logistics and weapons sites in eastern Iraq, retaliating against more than 30 drone attacks in the past three days by Iran-aligned terrorists.
Meanwhile, President Donald Trump once again warned that the US will return to strong military action against Iran and target key Iranian infrastructure if diplomatic efforts do not bring a rapid resolution to the crisis. This keeps geopolitical risk premium in play and should support the safe-haven USD. Adding to this, concerns about significant disruptions to global energy supplies trigger a sharp recovery in crude oil prices, reviving inflation fears and bolstering bets for at least one interest rate hike by the US central bank. Yemen’s Iran-aligned Houthis fired missiles at a Saudi oil tanker for violating the maritime navigation ban imposed on Saudi vessels.
This comes on top of the US-Iran standoff over the Strait of Hormuz and helps crude oil prices to stage a goodish recovery from an over two-week low, touched on Tuesday. The fundamental backdrop validates the near-term positive outlook for the USD, warranting some caution before positioning for any meaningful appreciation in the Gold price.
XAU/USD daily chart
Technical analysis: Gold’s bearish setup backs the case for further near-term depreciation
The recent range-bound price action since June 19 might be categorized as a bearish consolidation phase against the backdrop of a breakdown below a technically significant 200-day Simple Moving Average (SMA). Moreover, the wide gap between spot and this longer-term SMA suggests the broader trend remains under pressure despite some recent stabilization.
Meanwhile, the Relative Strength Index (RSI) hovers around 43 and keeps momentum in mildly negative territory. That said, the Moving Average Convergence Divergence (MACD) edges higher and hints at a tentative recovery attempt within a still-depressed structure. Hence, any attempted recovery might continue to face an immediate hurdle near the $4,050 level.
Further up, the top boundary of the trading range near $4,200 should act as a key barrier to beat. A daily close above this would be needed to ease the broader bearish bias and open the door to a more sustainable advance to the 200-day SMA at $4,493.65.
On the downside, the $4,000 mark, followed by the $3,965 region, or the lower end of the trading range, could offer some support to the commodity. Nevertheless, the XAU/USD pair remains vulnerable to further slippage unless buyers can build a base above the said support levels.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
Gold prices fell in India on Wednesday, according to data compiled by FXStreet.
The price for Gold stood at 12,389.67 Indian Rupees (INR) per gram, down compared with the INR 12,404.04 it cost on Tuesday.
The price for Gold decreased to INR 144,511.40 per tola from INR 144,678.20 per tola a day earlier.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 12,389.67 |
10 Grams | 123,897.30 |
Tola | 144,511.40 |
Troy Ounce | 385,359.30 |
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.)
- GBP/USD gains as the US Dollar declines amid high uncertainty for the Fed's upcoming rate decision.
- Middle East geopolitical tensions and persistent US inflation risks could provide underlying support for the Greenback.
- The Bank of England is widely expected to hold rates at 3.75% after June inflation slowed to 2.6%.
GBP/USD edges higher after remaining flat in the previous day, trading around 1.3300 during the Asian hours on Wednesday. The currency pair gains ground as the US Dollar (USD) struggles ahead of the Federal Reserve’s (Fed) upcoming policy decision.
While the central bank is widely expected to leave interest rates unchanged, traders are currently pricing in an unusually high 30.5% chance of an immediate rate hike, signaling notable uncertainty ahead of the announcement. Looking further ahead, markets are factoring in a 76.6% probability of a rate increase in September, reinforcing expectations that borrowing costs will remain elevated for longer.
Despite its current weakness, the Greenback may find support from renewed hostilities in the Middle East. Re-ignited geopolitical tensions are keeping investor focus firmly on potential inflationary risks and the broader interest rate outlook in the United States.
Meanwhile, investors are also eyeing the Bank of England's (BoE) upcoming policy decision later this week, where interest rates are widely anticipated to hold steady at 3.75%. This outlook is supported by recent inflation data showing annual consumer price growth slowed to a 15-month low of 2.6% in June, falling below the Bank of England's previous projections.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling 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, its currency will benefit 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.
- EUR/JPY could find primary resistance around the rising wedge top at 187.00.
- The 14-day Relative Strength Index around 60 maintains a bullish bias.
- The primary support lies at the nine-day EMA of 186.18.
EUR/JPY moves little after registering modest gains in the previous day, trading around 186.60 during the Asian hours on Wednesday. The currency cross is maintaining a bullish near-term tone as it holds above both the nine-period and 50-period Exponential Moving Averages (EMAs). The alignment of short- and medium-term EMAs below price suggests ongoing upside pressure.
Additionally, the 14-day Relative Strength Index (RSI) around 60 keeps a constructive bias without yet signaling overbought conditions. However, the daily chart technical analysis shows that the EUR/JPY cross is remaining within a rising wedge, indicating a strong bearish reversal risk.
The EUR/JPY cross may test the initial resistance at the upper boundary of the rising wedge around 187.00. A successful break above the wedge could support the currency cross to target the all-time high of 187.95, which was recorded on April 17.
On the downside, the primary support lies at the nine-day EMA of 186.18, followed by the lower boundary of the rising wedge around 185.60 and the 50-day EMA at 185.39. A break below this confluence support zone could cause a bearish emergence and put downward pressure on the EUR/JPY cross to navigate the region around the five-month low of 181.87, recorded on March 16, and the seven-month low of 180.81.
(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 weakest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | -0.06% | -0.10% | -0.09% | 0.39% | 0.12% | -0.18% | |
| EUR | 0.10% | 0.05% | 0.00% | 0.01% | 0.52% | 0.20% | -0.07% | |
| GBP | 0.06% | -0.05% | -0.02% | -0.03% | 0.46% | 0.15% | -0.12% | |
| JPY | 0.10% | 0.00% | 0.02% | 0.02% | 0.52% | 0.17% | -0.07% | |
| CAD | 0.09% | -0.01% | 0.03% | -0.02% | 0.49% | 0.17% | -0.09% | |
| AUD | -0.39% | -0.52% | -0.46% | -0.52% | -0.49% | -0.31% | -0.56% | |
| NZD | -0.12% | -0.20% | -0.15% | -0.17% | -0.17% | 0.31% | -0.26% | |
| CHF | 0.18% | 0.07% | 0.12% | 0.07% | 0.09% | 0.56% | 0.26% |
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).
- Silver price jumps to near $57.80 despite a sharp recovery in oil prices.
- The US CENTCOM launches attacks on Iraq, targeting Iran-backed groups.
- The Fed is expected to leave interest rates unchanged for the fifth time in a row.
Silver price (XAG/USD) trades 1.14% higher to near $57.80 during the Asian trading session on Wednesday. The white metal gains even as oil prices rebound strongly due to renewed conflicts between the United States (US) and Iran.
At press time, the WTI Oil price is up 3.65% to near $81.20, snapping a three-day losing streak.
The US Central Command (CENTCOM) reported late Tuesday that it intercepted all ballistic missiles launched by Iranian Islamic Revolutionary Guard Corps (IRGC) forces. In retaliation, CENTCOM reported carrying out precision strikes in Iraq, targeting Iran-backed groups planning attacks on US forces and Saudi oil facilities.
The Silver price has underperformed in the past months as higher oil prices boost inflation expectations, a scenario that forces global central banks to lean towards higher or steady interest rates.
Theoretically, higher interest rates by central banks bode poorly for non-yielding assets, such as Silver.
Meanwhile, investors await the Federal Reserve’s (Fed) monetary policy announcement at 18:00 GMT. According to the CME FedWatch tool, traders see a 69.5% chance that the Fed will leave interest rates unchanged in the range of 3.50%-3.75%. This will be the fifth straight policy meeting when the Fed will maintain the status quo.
Investors should not expect any remarks from the Fed regarding the monetary policy guidance, as Chairman Kevin Warsh explicitly said in the previous meeting that “so-called forward guidance is not well-suited in the current policy juncture”.
Silver technical analysis
XAG/USD trades higher at around $57.63 at press time, but is keeping a bearish near-term tone as it holds below the 20-day Exponential Moving Average (EMA), which is at roughly $58.93.
The fact that price remains capped by this short-term EMA suggests rallies are being sold into, while the Relative Strength Index (RSI) around 43 stays below the neutral 50 line, hinting that downside pressure still dominates even if conditions are not oversold.
On the topside, initial resistance is defined by the 20-day EMA near $58.93, and a daily close above this barrier would be needed to ease the current downside bias and open room for a further rebound towards $60.00. Looking down, the July 17 low at $54.77 is the key support zone.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
- EUR/USD climbs as the US Dollar weakens ahead of the Fed's anticipated interest rate hold.
- Traders price in an unusually high 30.5% chance of an immediate rate hike, signaling rare policy uncertainty.
- The ECB is expected to deliver a rate hike in September.
EUR/USD holds ground for the second successive day, trading around 1.1390 during the Asian hours on Wednesday. The US Dollar (USD) struggles against the Euro (EUR) as investors are closely monitoring the Federal Reserve’s (Fed) upcoming policy decision, where the central bank is widely expected to leave interest rates unchanged.
Traders are currently pricing in a 30.5% chance of an immediate rate hike, an unusually high level of uncertainty so close to a policy announcement. Looking further ahead, markets are also factoring in a 76.6% probability of a rate increase in September, reinforcing expectations that borrowing costs could remain elevated for longer.
The US Dollar (USD) may find support amid renewed hostilities in the Middle East, which have reignited geopolitical tensions, keeping investor focus firmly on inflationary risks and the broader interest rate outlook in the United States (US).
Geopolitical risk escalated sharply after the IRGC launched a surprise ballistic missile strike targeting a US military base in Jordan at approximately 5:45 PM ET. US Central Command reported that defense systems successfully intercepted all incoming missiles, preventing casualties and structural damage. Believed to be a direct countermeasure to recent US strikes against Iranian naval assets, the incident triggered immediate retaliation; CENTCOM subsequently executed precision airstrikes in Iraq aimed at neutralizing Iran-backed groups planning operations against US forces and Saudi energy infrastructure.
The European Central Bank (ECB) unanimously kept interest rates on hold at 2.25% on July 23, but strongly signaled a September rate hike. Leadership revealed that several Governing Council members pushed for an immediate increase, warning that sustained high energy prices risk driving up broader inflation through second-round effects.
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/CAD remains on the defensive for the second straight day amid a combination of factors.
- Rebounding oil prices underpin the Loonie and weigh on the pair amid subdued USD demand.
- The downside seems limited amid US-Iran tensions and ahead of the key FOMC rate decision.
The USD/CAD pair is seen consolidating around the 1.4100 mark during the Asian session as traders keenly await the outcome of a two-day FOMC policy meeting, due later this Wednesday. Investors will look for fresh cues about the US Federal Reserve's (Fed) future policy path, which will play a key role in influencing the near-term US Dollar (USD) price dynamics and provide a fresh impetus to the currency pair.
In the meantime, the USD remains on the defensive below a one-month top, touched on Tuesday, as bulls turn cautious heading into the key central bank event risk. Furthermore, a solid recovery in crude oil prices from an over two-week low underpins the commodity-linked Loonie and turns out to be another factor acting as a headwind for the USD/CAD pair. However, persistent geopolitical uncertainties should support the safe-haven Greenback and limit the downside for the currency pair.
In fact, Iran's Islamic Revolutionary Guard Corps (IRGC) launched multiple ballistic missiles at US forces in the Middle East on Tuesday. Separately, Central Command said the US military and Saudi Arabian forces conducted joint strikes against Iran-aligned terrorists in Iraq. Moreover, President Donald Trump issued a fresh warning that the US will return to strong military action, targeting key Iranian infrastructure, if diplomatic efforts do not bring a rapid resolution to the crisis in the Middle East.
This marks a fresh escalation of tensions in the Middle East and triggers a fresh leg up in crude oil prices, reviving inflation fears and bolstering bets for at least one interest rate hike by the Fed in 2026. This marks a significant divergence in comparison to the Bank of Canada's (BoC) dovish bias, which should cap the Canadian Dollar (CAD). Hence, it will be prudent to wait for strong follow-through selling before confirming that the recent USD/CAD recovery from a one-month low has run out of steam.
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
- DXY bulls remain on the sidelines ahead of the crucial FOMC decision later this Wednesday.
- Persistent geopolitical uncertainties continue to act as a tailwind for the safe-haven buck.
- Rebounding oil prices revive inflation fears and Fed rate hike bets, favoring bullish traders.
The United States Dollar Index (DXY), which tracks the Greenback against a basket of currencies, is seen consolidating below the 101.50 level during the Asian session as traders await the outcome of a two-day FOMC meeting, due later this Wednesday. The Index, however, retains a bullish undertone near an over one-month high, touched on Tuesday, and seems poised to appreciate further amid persistent geopolitical uncertainties.
Iran's Islamic Revolutionary Guard Corps (IRGC) launched a surprise attack and targeted US forces in the Middle East with multiple ballistic missiles late Tuesday. Furthermore, President Donald Trump once again warned that the US will return to strong military action against Iran if diplomatic efforts do not bring a rapid resolution to the crisis. This fuels concerns about a fresh escalation of tensions in the region and prompts traders to price in the geopolitical risk premium, which should act as a tailwind for the safe-haven US Dollar (USD).
Meanwhile, the latest developments trigger a sharp rally in crude oil prices, reviving inflation fears and raising prospects for an interest rate hike by the US Federal Reserve (Fed). This might further hold back traders from placing aggressive bearish bets on the DXY and warrants some caution before positioning for deeper losses. The upside, however, seems capped as investors opt to wait for the crucial FOMC policy decision, due later today. Investors will look for more cues about the Fed's future policy path, which should provide a fresh impetus to the USD.
Economists at DBS highlight that investors remain “highly cautious about the upcoming FOMC meeting (decision due 30 July 2am, SGT),” noting that the recent “pause in US-Iran hostilities did prompt a correction lower in crude oil prices” but has not materially eased policy concerns. According to DBS, the market is still “assigning 34% odds that the Fed would hike this week and close to 100% odds for the meeting in September,” underscoring persistent expectations that the Fed will resume tightening even as near-term geopolitical risk premia in oil have partially unwound.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.03% | 0.01% | -0.08% | -0.06% | 0.39% | 0.17% | -0.10% | |
| EUR | 0.03% | 0.05% | -0.06% | -0.03% | 0.44% | 0.19% | -0.06% | |
| GBP | -0.01% | -0.05% | -0.09% | -0.06% | 0.40% | 0.15% | -0.11% | |
| JPY | 0.08% | 0.06% | 0.09% | 0.03% | 0.50% | 0.22% | -0.02% | |
| CAD | 0.06% | 0.03% | 0.06% | -0.03% | 0.46% | 0.20% | -0.05% | |
| AUD | -0.39% | -0.44% | -0.40% | -0.50% | -0.46% | -0.24% | -0.49% | |
| NZD | -0.17% | -0.19% | -0.15% | -0.22% | -0.20% | 0.24% | -0.25% | |
| CHF | 0.10% | 0.06% | 0.11% | 0.02% | 0.05% | 0.49% | 0.25% |
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).
Australia’s Consumer Price Index (CPI) increased by 3.8% year-over-year (YoY) in June, compared to a 4% growth reported in May, the latest data published by the Australian Bureau of Statistics (ABS) showed on Wednesday.
The market forecast was a 4% print for the reported period.
The monthly Consumer Price Index dropped by -0.1% in June, compared to the previous reading of a 0.7% decrease, beating the estimated 0.2% increase.
The quarterly RBA Trimmed Mean CPI for June rose 0.8% and 3.6% on a monthly and an annual basis, respectively. Meanwhile, the Trimmed Mean CPI advanced 0.3% MoM in June. Annually, the Trimmed Mean CPI rose 3.6% YoY during the same period.
AUD/USD reaction to Australia's Consumer Price Index data
The Australian Dollar (AUD) sees fresh selling following Australia's CPI report. The AUD/USD pair is down 0.29% on the day to trade at 0.6954 at the press time.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.02% | 0.02% | -0.07% | -0.05% | 0.32% | 0.04% | -0.04% | |
| EUR | 0.02% | 0.04% | -0.04% | -0.03% | 0.36% | 0.05% | -0.02% | |
| GBP | -0.02% | -0.04% | -0.07% | -0.06% | 0.32% | 0.02% | -0.05% | |
| JPY | 0.07% | 0.04% | 0.07% | 0.02% | 0.40% | 0.07% | 0.02% | |
| CAD | 0.05% | 0.03% | 0.06% | -0.02% | 0.37% | 0.07% | 0.00% | |
| AUD | -0.32% | -0.36% | -0.32% | -0.40% | -0.37% | -0.29% | -0.35% | |
| NZD | -0.04% | -0.05% | -0.02% | -0.07% | -0.07% | 0.29% | -0.06% | |
| CHF | 0.04% | 0.02% | 0.05% | -0.02% | -0.01% | 0.35% | 0.06% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
This section below was published on July 28 at 22:30 GMT on Tuesday as a preview of Australia’s CPI inflation report.
- Australian Consumer Price Index seen steady at 4% YoY in June.
- The Trimmed Mean CPI will impact the next Reserve Bank of Australia interest rate decision.
- The Australian Dollar trades with a neutral stance against its American rival.
The Australian Bureau of Statistics (ABS) will publish the June Consumer Price Index (CPI) on Wednesday at 01:30 GMT. The report is expected to show that inflation rose 4% from a year earlier, matching the May reading. The monthly CPI is foreseen at 0.2% following the -0.7% print from May.
The ABS will also release the Trimmed Mean CPI, the Reserve Bank of Australia’s (RBA) favorite inflation gauge. The annual figure is expected to print at 3.7%, higher than the previous reading of 3.6%, while on a monthly basis the Trimmed Mean CPI is also forecast to remain unchanged at 0.4%.
Ahead of the announcement, the Australian Dollar (AUD) hovers around 0.6950 vs the US Dollar (USD), with the latter strengthening on demand for safety.
What to expect from Australia’s inflation rate data?
Inflation data is a critical factor in the RBA’s monetary policy decisions, and according to Governor Michele Bullock, “it is still too high.”
The RBA met in June, and the Board decided to leave the cash rate target unchanged at 4.35%, after hiking rates three times so far in 2026. The accompanying statement showed that policymakers acknowledged that disruption to global Oil supply is having an impact on inflation, and that the latter picked up “materially” in the second half of 2025 — that is, before the current Middle East war.
Geopolitical tensions escalated in mid-July and eased by the end of the month, yet the crisis remains. Transit through the Strait of Hormuz is limited after the United States (US) and Iran exchanged attacks over the last two weeks. While crossfire has paused, the critical sea strait is closed to most traffic. Oil prices are off their monthly peaks, but a barrel of West Texas Intermediate (WTI) trades at around $80, while the barrel of Brent changes hands at $84, maintaining speculative interest in cautious mode.
Confidence has also been eroded ahead of the Australian CPI amid a sharp decline in global stocks. Once again, concerns revolved around potential returns from massive AI investment.
No peace progress in the Middle East is the main inflationary factor these days, and there’s little central banks can do. The RBA understands a tighter monetary policy this year has helped slow consumption spending, but also that uncertainty about the outlook remains high, and that, even if the war ends in the near term, something quite unlikely, global supply issues will take some time to resolve, hence maintaining upward pressure on global energy prices and inflation.
Additionally, the US Federal Reserve (Fed) is scheduled to announce its decision on monetary policy later on Wednesday. The Fed is widely anticipated to keep interest rates on hold at 3.75%, although Chair Kevin Warsh is expected to retain a certain hawkish tone. Warsh has made a point against forward guidance, yet market players will still be looking for clues about what the central bank may do when it meets again in September.
How could the Consumer Price Index report affect AUD/USD?
Annual Australian CPI peaked at 4.6% YoY in March and eased toward 4% in May. Given that the war paused in June, most major economies reported lower-than-anticipated inflation in the month, and that should be the case in Australia.
A reading in line with expectations and the previous 4% should have no material impact on the AUD/USD pair. Anything above that level should boost speculation for additional rate hikes, resulting in a stronger Aussie, at least in the near-term.
On the contrary, a softer-than-anticipated outcome, and especially given AUD/USD's current bearish tone, should push the pair sharply lower in the near term, as the focus quickly returns to war-related headlines and the upcoming Fed announcement.
Valeria Bednarik, FXStreet Chief Analyst, notes: “From a technical point of view, the AUD/USD is neutral. For the last two weeks, the pair has been confined to a tight range, finding buyers around 0.6950 and quickly retreating on spikes beyond the 0.7000 figure. The daily chart reflects the ongoing absence of directional strength, as the pair barely holds above a mildly bullish 20-day Simple Moving Average (SMA) currently near the base of the aforementioned range. The 100-day SMA lies flat in the 0.7050 region, while the 200-day SMA grinds marginally higher around 0.6900. Technical indicators, in the meantime, turned marginally lower around their midlines, failing to provide clear directional clues.”
Bednarik adds: “The AUD/USD pair would need to clear the 0.7030 region to be able to extend its run toward the 0.7070 price zone. Once beyond the latter, next resistance lies at the 0.7100 figure. Support can be found at 0.6950 and 0.6900, with a break below the latter opening the door for a steeper decline.”
RBA FAQs
The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.
While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.
Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.
Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.
- AUD/JPY attracts heavy selling following the release of soft Australian consumer inflation figures.
- Intervention fears prompt some JPY unwinding and further contribute to the steep intraday slide.
- The wide interest rate gap between Japan and Australia holds back bears from placing fresh bets.
The AUD/JPY cross extends this week's retracement slide from the 114.65 zone, or its highest level since June 3, and attracts some follow-through selling for the second straight day. The intraday decline picks up pace following the release of soft Australian consumer inflation figures and drags spot prices to an over one-week low, around the 113.60 region, in the last hour.
Data published by the Australian Bureau of Statistics (ABS) showed the Consumer Price Index (CPI) increased by 3.8% year-over-year (YoY) in June, compared to a 4% growth reported in May and consensus estimates. Adding to this, the monthly print missed forecasts and fell for the second straight month, by 0.1% in June. The softer CPI report prompted traders to unwind expectations for a near-term Reserve Bank of Australia (RBA) rate hike and weighs heavily on the Australian Dollar (AUD).
The Japanese Yen (JPY), on the other hand, draws support from growing speculations that authorities will step in to prop up the domestic currency. This turns out to be another factor that exerts downward pressure on the AUD/JPY cross and contributes to the steep intraday decline. However, the persistently wide interest rate gap between Japan and other major economies, including Australia, holds back JPY bulls from placing aggressive bets and helps limit further losses for the currency pair.
Furthermore, economic risks stemming from the Middle East crisis warrant some caution before confirming that the AUD/JPY cross has topped out in the near-term and positioning for further losses. Investors might also opt to wait for the crucial Bank of Japan (BoJ) policy decision on Friday before placing fresh directional bets. This, in turn, suggests that any subsequent slide might still be seen as a buying opportunity and is more likely to remain limited amid mixed fundamental cues.
Economic Indicator
Consumer Price Index (YoY)
The Consumer Price Index (CPI), released by the Australian Bureau of Statistics on a monthly basis, measures the changes in the price of a comprehensive basket of goods and services acquired by household consumers. The indicator is the primary measure of headline inflation after a new methodology was applied to transition from quarterly to monthly readings, applying to data from April 2024 onwards. The YoY reading compares prices in the reference month to the same month a year earlier. A high reading is seen as bullish for the Australian Dollar (AUD), while a low reading is seen as bearish.
Read more.Last release: Wed Jul 29, 2026 01:30
Frequency: Monthly
Actual: 3.8%
Consensus: 4%
Previous: 4%
Source: Australian Bureau of Statistics
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