Forex News
- USD/IDR rises as the Rupiah declines after Indonesia granted legal immunity for state fund Danantara bond purchases.
- Markets await Indonesia's June inflation data after May figures hit 3.08%, nearing Bank Indonesia's target ceiling.
- The US Dollar gains amid expectations of sustained higher interest rates.
USD/IDR continues to gain ground for the second consecutive day, trading around 17,940 during the Asian hours on Tuesday. The currency pair rose as the Indonesian Rupiah (IDR) weakened over governance and transparency concerns. Investor confidence was shaken after the government introduced a controversial legislative provision granting blanket legal immunity for purchases of bonds issued by the state investment fund, Danantara.
Traders are awaiting Indonesia's key economic data due on Wednesday, including the Manufacturing Purchasing Managers’ Index (PMI), trade balance, and inflation. June inflation data is highly awaited after May headline figures hit 3.08%, nearing Bank Indonesia's (BI) 1.5%–3.5% target ceiling due to surging food and energy costs.
The USD/IDR pair holds gains as the US Dollar (USD) rises amid rising hawkish sentiment surrounding the Federal Reserve’s (Fed) policy trajectory. According to the CME FedWatch tool, traders are now pricing in a nearly 60% probability of a Fed interest rate hike by September.
Traders are looking forward to observing this week's key US labor market reports, particularly Thursday’s Nonfarm Payrolls (NFP) data, for definitive clues on the central bank's next moves. Forecasters currently expect June job growth to land at 114,000, with the Unemployment Rate holding flat at 4.3%.
The Greenback strengthens against the Indonesian Rupiah amid rising safe-haven demand, which could be attributed to persistent geopolitical friction in the Middle East, though diplomatic signals remain highly conflicted.
US President Donald Trump announced that the two nations were set to hold fresh peace talks on Tuesday in Doha, Qatar, following a weekend of regional hostilities. However, Tehran sharply contradicted this claim, stating that no negotiation meetings are scheduled with Washington at any level and emphasizing that Iran remains focused on implementing its existing memorandum of understanding rather than entering final agreement talks.
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.
- EUR/JPY weakens to near 184.85 in Tuesday’s early European session.
- Japan’s Katayama said the government was ready to take appropriate action against excessive currency moves.
- Traders reduce their bets on the ECB rate hikes this year.
The EUR/JPY cross loses ground to around 184.85 during the early European trading hours on Tuesday. The Japanese Yen (JPY) rebounds against the Euro (EUR) as traders on alert for possible intervention from Japanese authorities. Germany’s Retail Sales and inflation data will be published later in the day.
Japanese Finance Minister Satsuki Katayama on Tuesday reiterated the authorities stood ready to respond appropriately at any time. Meanwhile, Chief Cabinet Secretary Minoru Kihara said that the Japanese government will work to build an economy less vulnerable to foreign-exchange volatility while remaining prepared to intervene in currency markets if necessary. Kihara also declined to comment on the Japanese Yen’s current level.
"It's a question of when, not if, the Ministry of Finance (MOF) intervenes again to support the yen," said Carol Kong, currency strategist at Commonwealth Bank of Australia.
ECB President Christine Lagarde said in a speech opening her institution’s annual retreat on Monday that Europe is becoming less vulnerable to outside shocks thanks to a better financial framework and progress on the green transition. Lagarde emphasized that tensions subside amid a peace deal, which is “far from assured.” Policymakers must decide whether further monetary tightening is needed.
Markets have pared expectations for future ECB rate increases as energy prices retreat. Oxford Economics and Capital Economics expect the ECB won’t raise the interest rates further, though investors are still pricing one more quarter-point move, which would bring the deposit rate to 2.50%.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
Gold prices fell in India on Tuesday, according to data compiled by FXStreet.
The price for Gold stood at 12,156.82 Indian Rupees (INR) per gram, down compared with the INR 12,219.35 it cost on Monday.
The price for Gold decreased to INR 141,802.20 per tola from INR 142,524.10 per tola a day earlier.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 12,156.82 |
10 Grams | 121,566.90 |
Tola | 141,802.20 |
Troy Ounce | 378,146.70 |
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.)
- Gold attracts heavy selling pressure for the second straight day amid a broadly firmer USD.
- The US-Iran uncertainty revives inflation fears and bolsters Fed hike bets, boosting the buck.
- Traders look to the US data for some impetus ahead of Fed Chair Warsh and the US NFP.
Gold (XAU/USD) recovers slightly from its lowest level since November 2025, touched during the Asian session, albeit it sticks to a negative bias for the second straight day on Tuesday. Against the backdrop of renewed Mideast tensions, mixed signals on US-Iran talks assist the US Dollar (USD) to attract some dip-buyers and stall its recent pullback from the highest level since May 2025. Apart from this, elevated expectations for Federal Reserve (Fed) interest rate hikes lend additional support to the USD and exert some downward pressure on the bullion.
Media reports suggested that the US and Iran have agreed to "stand down" following an exchange of strikes in and around the Strait of Hormuz over the past few days, with both countries accusing each other of violating the ceasefire agreement. Adding to this, US President Donald Trump wrote on Truth Social that Iran had requested a meeting, and it will take place in Qatar's capital, Doha, on Tuesday. However, Deputy Iranian Foreign Minister Kazem Gharibabadi denied that there were plans for technical talks this week. This keeps geopolitical risk premiums in play and benefits the safe-haven USD.
Meanwhile, renewed US-Iran hostilities sparked fears of inflation, which, along with the Fed's more hawkish tilt, bolsters bets for higher interest rates. According to the CME Group's FedWatch Tool, traders are still pricing in around a 63% chance that the US central bank will raise borrowing costs in September and assigning over an 80% probability of a move by the end of this year. The outlook, in turn, is seen as another factor contributing to the bid tone surrounding the USD and driving flows away from the non-yielding Gold, which now seems to have found acceptance below the $4,000 psychological mark.
Furthermore, the Japanese Yen (JPY) plunged to a fresh four-decade low vs the USD, causing collateral damage in precious metal markets. Traders now look to Tuesday's US economic docket, featuring the Conference Board's Consumer Confidence Index and JOLTS Job Openings data. The focus, however, will be on Fed Chair Kevin Warsh's appearance on Thursday at the European Central Bank (ECB) Forum in Sintra. Apart from this, the popularly known Nonfarm Payrolls (NFP) report will offer cues about the Fed's policy path, which will drive the USD and influence the Gold price.
XAU/USD 4-hour chart
Gold bears turn cautious amid oversold RSI; downside potential intact below $4,000
Against the backdrop of the recent repeated failures near the 100-period Simple Moving Average (SMA) on the 4-hour chart, acceptance below the $4,000 mark could be seen as a fresh trigger for the XAU/USD bears. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator sits just below the zero line with a small negative reading, hinting at waning downside momentum rather than a clear recovery. However, the Relative Strength Index (RSI) near 34 flirts with oversold territory, suggesting that selling pressure could start to tire without yet signalling a confirmed bullish reversal.
Any meaningful recovery back above the $4,000 mark, however, is likely to confront an immediate hurdle near the $4,045 region, above which the Gold price could aim to reclaim the $4,100 mark. A further move up could attract fresh sellers and remain capped near the 100-period SMA at $4,180.34. A sustained break above this barrier would be needed to alleviate the current bearish bias and open the door to a more constructive recovery phase.
(The technical analysis of this story was written with the help of an AI tool.)
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.
- USD/CHF rises as the Swiss Franc weakens ahead of KOF data, despite forecasts predicting an increase to 98.2.
- The US Dollar gains amid expectations of sustained higher interest rates.
- Persistent Middle East friction drives safe-haven demand for the Greenback.
USD/CHF recovers its recent losses from the previous day, trading around 0.8090 during the Asian hours on Tuesday. Traders await the KOF Swiss Leading Indicator due later in the day, which is expected to inch up to 98.2 in May, from 98.0 prior.
The USD/CHF pair gains ground as the US Dollar advances amid rising hawkish sentiment surrounding the Federal Reserve’s (Fed) policy trajectory. According to the CME FedWatch tool, traders are now pricing in a nearly 60% probability of a Fed interest rate hike by September.
Traders are awaiting this week's key US labor market reports, particularly Thursday’s Nonfarm Payrolls (NFP) data, for definitive clues on the central bank's next moves. Forecasters currently expect June job growth to land at 114,000, with the Unemployment Rate holding flat at 4.3%.
The Greenback gains safe-haven support from persistent geopolitical friction in the Middle East, though diplomatic signals remain highly conflicted. US President Donald Trump announced that the two nations were set to hold fresh peace talks on Tuesday in Doha, Qatar, following a weekend of regional hostilities. However, Tehran sharply contradicted this claim, stating that no negotiation meetings are scheduled with Washington at any level and emphasizing that Iran remains focused on implementing its existing memorandum of understanding rather than entering final agreement talks.
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.
- EUR/USD meets with a fresh supply as Iran risks and hawkish Fed bets revive USD demand.
- Receding bets for a rate hike by the ECB undermine the Euro and contribute to the decline.
- The mixed technical setup warrants some caution before placing aggressive directional bets.
The EUR/USD pair attracts some sellers during the Asian session on Tuesday, snapping a three-day winning streak and stalling its recent recovery from the lowest level since May 2025 set last week. Spot prices slip below the 1.1400 mark amid a firmer US Dollar (USD) and seem vulnerable to weaken further.
Renewed US-Iran hostilities and Israeli strikes on Lebanon keep geopolitical risk premiums in play. This, along with elevated expectations of Federal Reserve (Fed) interest rate hikes, assists the safe-haven USD to regain positive traction following a three-day downfall. Adding to this, reduced bets for a rate hike by the European Central Bank (ECB) in 2026 exert some downward pressure on the EUR/USD pair.
From a technical perspective, spot prices maintain a bearish outlook below the 200-period Exponential Moving Average (EMA) on the 4-hour chart and the 1.1500 psychological mark. Moreover, momentum indicators suggest that the downside pressure is moderating but not yet strong enough to challenge overhead resistance. In fact, the Relative Strength Index (RSI) near 49.1 hints at neutral bias after recovering from oversold territory.
Adding to this, the Moving Average Convergence Divergence (MACD) is marginally positive, with the line above zero and a modestly positive profile. Hence, any subsequent decline below the 1.1380 immediate support is more likely to attract some buyers near the 1.1335 zone. The latter should act as a key pivotal point, which, if broken decisively, will be seen as a fresh trigger for bearish traders and pave the way for deeper losses.
On the topside, initial resistance is clearly defined by the 1.1500 psychological mark and the 200-period EMA at 1.1538, which acts as the primary cap on any recovery attempts. The EUR/USD pair would need to reclaim the said barriers to ease the broader bearish tone and shift the technical picture toward a more constructive outlook.
(The technical analysis of this story was written with the help of an AI tool.)
EUR/USD 4-hour chart
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 | 0.21% | 0.18% | 0.15% | 0.15% | 0.24% | 0.01% | 0.20% | |
| EUR | -0.21% | -0.03% | -0.09% | -0.10% | 0.03% | -0.21% | -0.02% | |
| GBP | -0.18% | 0.03% | -0.04% | -0.04% | 0.08% | -0.16% | 0.00% | |
| JPY | -0.15% | 0.09% | 0.04% | 0.00% | 0.10% | -0.11% | 0.05% | |
| CAD | -0.15% | 0.10% | 0.04% | -0.01% | 0.08% | -0.13% | 0.04% | |
| AUD | -0.24% | -0.03% | -0.08% | -0.10% | -0.08% | -0.20% | -0.04% | |
| NZD | -0.01% | 0.21% | 0.16% | 0.11% | 0.13% | 0.20% | 0.15% | |
| CHF | -0.20% | 0.02% | -0.00% | -0.05% | -0.04% | 0.04% | -0.15% |
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).
- US Dollar Index gains momentum to around 101.30 in Tuesday’s early European session.
- Growing chances of US rate rises and optimism about the American economy support the DXY.
- Traders brace for the upcoming US June jobs report, which is due on Thursday.
The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, currently trades near 101.30 during the early European trading hours on Tuesday. The DXY gathers strength and is heading for its biggest monthly gain in nearly a year on optimism over US economic growth and the prospect of Federal Reserve (Fed) interest rate hikes.
The Fed held its benchmark interest rate steady in a target range of 3.50% to 3.75% at its June policy meeting. The central bank's update also removed a statement hinting that it was leaning towards lowering interest rates in the future.
A more hawkish turn at the Fed’s June meeting under new Fed Chair Kevin Warsh has led traders to increase bets on rate hikes this year, boosting the US Dollar across the board. Fed funds futures have priced in nearly a 63% chance of a rate hike by September, according to the CME FedWatch tool.
The US jobs report for June will take center stage later on Thursday. Three consecutive months of stronger-than-expected Nonfarm Payrolls (NFP) gains have supported the Fed's hawkish shift.
Markets expect an increase of 110,000 jobs in June, and the Unemployment Rate is projected to hold steady at 4.3% during the same period. A turn in the labor market, however, could prompt a more dovish rethink of the monetary path, which would drag the DXY lower.
"The labor market appears to have accelerated," said Marc Chandler, chief market strategist at Bannockburn Global Forex. "The concerns that the doves had pointed to about labor markets slowing down seem to have passed."
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.
- NZD/USD edges lower as geopolitical risks and hawkish Fed bets help revive the USD demand.
- The better-than-expected official PMIs from China fail to provide any impetus to antipodeans.
- The lack of follow-through selling warrants caution before placing fresh bearish bets on the pair.
The NZD/USD pair attracts some sellers during the Asian session on Tuesday, though it lacks bearish conviction and remains confined in a familiar range held over the past week or so. Spot prices move little following the release of China's official PMIs and currently trade just below mid-0.5600s, down 0.05% for the day.
An official survey published by the National Bureau of Statistics (NBS) showed that business activity in China's manufacturing sector grew slightly above expectations in June. In fact, the official Manufacturing PMI rose from the 50.0 seen in May to 50.3, slightly above expectations of 50.1. Adding to this, the gauge for the non-manufacturing sector improved to 50.2 in June vs 50.1 in the previous month and forecast for a 49.9 print. The data, however, indicated that business activity barely remained in expansion territory on the back of sluggish domestic demand and weak consumer spending. This, in turn, fails to provide any impetus to antipodean currencies, including the New Zealand Dollar (NZD) and the NZD/USD pair.
The US Dollar (USD), on the other hand, draws some support from persistent geopolitical uncertainties and mixed signals on US-Iran talks. US President Donald Trump wrote on Truth Social that Iran had requested a meeting, and it will take place in Qatar's capital, Doha, on Tuesday. However, Deputy Iranian Foreign Minister Kazem Gharibabadi denied that there were plans for technical talks this week. Furthermore, fresh Israeli strikes on Lebanon keep geopolitical risk premiums in play, which, along with hawkish US Federal Reserve (Fed) bets, underpins the safe-haven USD and weighs on the NZD/USD pair.
According to the CME Group's FedWatch Tool, traders are still pricing in around 63% chance that the US central bank will raise borrowing costs in September and assigning over an 80% probability of a move by the end of this year. Adding to this, renewed US-Iran hostilities sparked inflationary fears, which, in turn, favor the USD bulls. However, the NZD/USD pair, so far, has held above its lowest level since November 2025, touched last week, warranting some caution before positioning for any further depreciating move.
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
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