Forex News
Societe Generale’s Kenneth Broux highlights that the Dollar is in breakout territory after DXY moved above 101.00, supported by a hawkish shift in Fed expectations. The FOMC’s higher dot plot and firm inflation projections have driven a bear‑flattening in Treasuries and delivered the biggest Dollar gain in three months, with SOFR futures now pricing a 25 bp hike by October.
Fed dots drive renewed Dollar strength
"Dollar in breakout territory after DXY scales 101.00."
"The upward adjustment of the dots – 9/18 members are pencilling in higher rates this year, 6 are forecasting two or more hikes - sparked the violent bear flattening sell off and the biggest gain for the dollar in three months."
"The 2SD move lifted 2y UST yields to 4.20%. The 3SD slump deflated EUR/USD below 1.15 for the first time since April."
"Lower oil prices failed to shield importers incl the euro and the Yen as rate differentials swung the tide in favour of the dollar."
"SOFR futures price in +25bp by the Fed in October."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Rabobank highlights that a 60‑day US–Iran memorandum of understanding has reduced immediate risks to the global economy by keeping the Strait of Hormuz open, though ship crossings remain limited. The bank notes that Iran may introduce maritime fees after the negotiating period, while President Trump opposes any tolls, leaving future Oil transit costs and geopolitical risk unresolved.
Hormuz deal cuts near term risk
"The US and Iran have signed the memorandum of understanding, and the 60-day deal is now in effect. Both sides are trying to show some good faith. Iran has said that the Strait of Hormuz is open, even though ship crossings have still been limited so far. Meanwhile, the US said it ended its own naval blockade, which is ahead of the 30-day deadline that both sides had agreed on."
"When talks do happen, the future status of the Strait of Hormuz may remain another contentious issue. The Guardian reports that Iran is planning to introducemaritime feesfor ships crossing the waterway, to cover the costs of managing the Strait. This fee would go into effect after the 60-day negotiating period. The memorandum of understanding only requires Iran to provide safe and free passage for 60 days, but President Trump has expressed his opposition to any toll for ships using the waterway."
"Nonetheless, the memorandum of understanding removes some of the immediate risks for the global economy and markets. Accordingly, the Bank of England held rates unchanged yesterday, which policymakers consider an “active hold.” Prior to the Iran war, the Bank and money markets had been looking for cuts this year, which means that not cutting already amounts to some degree of policy tightening."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- NZD/USD extends losses to 0.5725, approaching the year-to-date low of 0.5680.
- The US Dollar has been boosted by rising bets on Fed rate hikes later in the year.
- The New Zealand Dollar remains vulnerable while below 0.5800.
The New Zealand Dollar (NZD) is showing the worst performance among major currencies on Friday, extending its decline against the US Dollar (USD) to 0.5724 lows so far, with the year-to-date low of 0.5781 coming closer. The pair is on track for a 1.65% weekly decline, as Fed hiking bets have offset investors' enthusiasm about the US-Iran trade deal
The US Dollar has been boosted this week by the Federal Reserve’s hawkish-leaning stance and the new Chairman Kevin Warsh’s commitment to bring inflationary pressure to heel. Futures markets are pricing a 77% chance that the Fed will hike rates in October, from less than 40% one week before, and a nearly 90% chance of at least one rate hike before the end of the year.
In the geopolitical front, Oil tankers are sailing through the Strait of Hormuz, which is fuelling a moderate risk appètite on Friday. Investors, however, are pondering the soundness of the peace deal, as Israel’s attacks on Lebanon continue, and US Vice President JD Vance has delayed the talks with Iranian representatives scheduled for Friday in Switzerland.
Technical Analysis: Kiwi remains vulnerable while below 0.5800
The technical picture shows the NZD/USD extending a bearish near-term bias with momentum indicators in the 4-hour chart deep into bearish territory. The Relative Strength Index (14) is hovering near 33, just above oversold levels, with the Moving Average Convergence Divergence (MACD) lines stuck below zero.
Bears have found some support at 0.5724, but technical indicators suggest that rallies are likely to find sellers. Further down, the target is the mentioned 2026 low, near 0.5680. Below that level, there is no clear support until the November 2025 low, at the 0.5580 area
On the topside, recovery attempts might face resistance at the intra-day high of 0.5775. The pair should break Thursday's high in the 0.5800 area and the trendline resistance from late May highs, now around 0.5810, to ease downside pressure and look towards the June 15 high, at 0.5864.
(The technical analysis of this story was written with the help of an AI tool.)
Societe Generale’s Kenneth Broux notes that USD/JPY has resumed its advance after holding a multi‑month trendline near 157.40 and breaking out of consolidation. The pair is approaching the 2024 peak around 162, with key support at 159.65/159.10. Japanese officials continue to warn of decisive FX action even as the Bank of Japan signals further tightening ahead.
Yen pressured despite intervention risk
"USD/JPY has staged a steady advance after testing a multi-month ascending trendline (now near 157.40). The pair has broken above the upper boundary of its recent consolidation, underscoring prevalence of the upward momentum."
"The 2024 peak around 162 represents the first resistance. Defence of the recent pivot low at 159.65/159.10 is crucial for persistence in up move."
"The next objectives could be located at projections of 163.70/164.20 and 165.70."
"USD/JPY: 160.97 - 161.81 overnight range. Spot narrows gap to Jul-24 high of 161.95."
"BoJ Dep Gov Himino flags further tightening ahead in Diet testimony, April minutes hawkish. Katayama repeats warning of decisive FX action."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Gold prolonged its downtrend for the third straight day on Friday amid a bullish US Dollar.
- The Fed’s hawkish tilt continues to underpin the buck and weigh on the non-yielding bullion.
- US Vice President cancels trip to Switzerland for Iran talks, further benefiting the Greenback.
Gold (XAU/USD) recovers slightly from over a one-week low, touched earlier this Friday, though the upside potential seems limited in the face of a bearish fundamental backdrop. Against the backdrop of the US Federal Reserve's (Fed) hawkish tilt, the uncertainty surrounding the next round of US-Iran negotiations continues to push the US Dollar (USD) higher for the third straight day. In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, shot to a fresh high since May 2025 and should undermine demand for the commodity.
The US central bank decided to keep the benchmark interest rate unchanged in its current 3.5% to 3.75% target range at the end of the first meeting under the new Fed Chair, Kevin Warsh. However, the so-called dot plot indicated that nine of the Fed's 19 committed members believed that they would need to raise the policy rate this year if inflation remains sticky. Furthermore, Kevin Warsh’s comments during the post-meeting press conference focused strongly on price stability, suggesting that the Fed might not rush to cut interest rates even in the face of declining growth.
According to the CME Group's FedWatch Tool, traders are now pricing in a 70% chance that the US central bank will hike rates in September. This keeps US Treasury bond yields elevated and continues to support the buck. Meanwhile, the optimism led by an interim US-Iran peace deal fades as key issues between the two countries remain unresolved. Moreover, US Vice President JD Vance canceled his planned trip for talks with Iran in Switzerland, saying that the meeting wasn’t yet finalized. Adding to this, Israeli air strikes in Lebanon threaten to unravel the US-Iran deal.
Any signs of renewed escalation of tensions in the Middle East and the lack of progress in US-Iran negotiations could further boost the safe-haven USD. Meanwhile, the liquidity is likely to remain low amid a US bank holiday in observance of Juneteenth National Independence Day. Nevertheless, the Gold seems poised to register losses for the third straight week as the market focus remains glued to further developments surrounding the Middle East crisis.
XAU/USD daily chart
Gold might struggle to register any meaningful recovery amid bearish setup
From a technical perspective, this week's repeated failures to breakout through the 200-day Exponential Moving Average (EMA) and the subsequent slide favor the XAU/USD bears. Adding to this, the Relative Strength Index (RSI) hovers near 36, reflecting weak demand rather than outright oversold conditions. Furthermore, the Moving Average Convergence Divergence (MACD) indicator stays in negative territory with the line below its signal and a subdued histogram, which suggests ongoing downside pressure.
Meanwhile, the 200-day EMA at $4,358.53 is the first meaningful resistance, and bulls would need a daily close above this level to ease the current downside bias and hint at a more sustained recovery phase. Until then, the XAU/USD pair remains vulnerable to further declines, and further fresh selling is likely to be driven by momentum rather than by interaction with a specific technical floor on the daily chart.
(The technical analysis of this story was written with the help of an AI tool.)
Interest rates FAQs
Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.
Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money.
Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.
The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.
- AUD/USD bounces off a one-week low, though the upside potential seems limited.
- The Iran uncertainty and the hawkish Fed underpin the USD, capping spot prices.
- The bearish technical setup backs the case for a further near-term depreciation.
The AUD/USD pair recovers a few pips from over a one-week low, touched earlier this Friday, though it lacks follow-through and currently trades around the 0.7000 psychological mark.
The US Dollar (USD) rallies to a fresh high since May 2025 amid the uncertainty over the next round of US-Iran negotiations. Apart from this, the US Federal Reserve's (Fed) hawkish tilt lends additional support to the Greenback and turns out to be a key factor acting as a headwind for the AUD/USD pair.
That said, the Reserve Bank of Australia's (RBA) signal that additional rate hikes were possible if inflation persists helps limit the downside for the Australian Dollar (AUD). From a technical perspective, the AUD/USD pair has been showing resilience below the 61.8% Fibonacci retracement of the March-May upswing.
However, the recent breakdown below the 100-day Simple Moving Average (SMA) and the 50% retracement level favor bearish traders. Furthermore, the Moving Average Convergence Divergence (MACD) remains slightly negative and flat, reinforcing a weak tone rather than a momentum-driven selloff.
Adding to this, the Relative Strength Index (RSI) near 37 hints at growing downside pressure rather than outright oversold stress. This, in turn, suggests that the path of least resistance for the AUD/USD pair is to the downside, and any meaningful recovery attempt might still be seen as a selling opportunity.
That said, a clear break and acceptance below the 61.8% retracement around 0.7000 is needed to back the case for deeper losses to the 78.6% level near 0.6926, ahead of stronger structural support at the recent swing low around 0.6832. On the topside, initial resistance emerges at the 50.0% retracement at 0.7051.
The latter is followed by the 100-day SMA at 0.7085 and the 38.2% retracement around 0.7103. Only a sustained recovery through that cluster would ease bearish pressure and open the way toward the 23.6% retracement at 0.7167 and the cycle high near 0.7271.
(The technical analysis of this story was written with the help of an AI tool.)
AUD/USD daily chart
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.13% | 1.63% | 0.73% | 1.11% | 0.48% | 1.62% | 1.39% | |
| EUR | -1.13% | 0.47% | -0.37% | -0.02% | -0.66% | 0.48% | 0.25% | |
| GBP | -1.63% | -0.47% | -1.02% | -0.48% | -1.13% | 0.01% | -0.22% | |
| JPY | -0.73% | 0.37% | 1.02% | 0.37% | -0.26% | 0.92% | 0.64% | |
| CAD | -1.11% | 0.02% | 0.48% | -0.37% | -0.66% | 0.55% | 0.27% | |
| AUD | -0.48% | 0.66% | 1.13% | 0.26% | 0.66% | 1.15% | 0.90% | |
| NZD | -1.62% | -0.48% | -0.01% | -0.92% | -0.55% | -1.15% | -0.23% | |
| CHF | -1.39% | -0.25% | 0.22% | -0.64% | -0.27% | -0.90% | 0.23% |
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).
Here is what you need to know on Friday, June 19:
The US Dollar (USD) benefits from the risk-averse market atmosphere early Friday and builds on its weekly gains against its major rivals. In the second half of the day, April Retail Sales from Canada will be the only data featured in the economic calendar. Stock and bond markets in the United States (US) will remain closed in observance of the Juneteenth holiday. Hence, investors will pay close attention to headlines coming out of the Middle East and to comments from central bank officials.
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.11% | 1.58% | 0.73% | 1.10% | 0.47% | 1.57% | 1.34% | |
| EUR | -1.11% | 0.43% | -0.39% | -0.02% | -0.66% | 0.44% | 0.22% | |
| GBP | -1.58% | -0.43% | -0.98% | -0.45% | -1.09% | 0.01% | -0.22% | |
| JPY | -0.73% | 0.39% | 0.98% | 0.36% | -0.27% | 0.87% | 0.60% | |
| CAD | -1.10% | 0.02% | 0.45% | -0.36% | -0.66% | 0.51% | 0.24% | |
| AUD | -0.47% | 0.66% | 1.09% | 0.27% | 0.66% | 1.11% | 0.89% | |
| NZD | -1.57% | -0.44% | -0.01% | -0.87% | -0.51% | -1.11% | -0.23% | |
| CHF | -1.34% | -0.22% | 0.22% | -0.60% | -0.24% | -0.89% | 0.23% |
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).
The Swiss Foreign Ministry announced earlier in the day that the upcoming US-Iran talks will not take place as planned. There was no official explanation from the US side but Vice President JD Vance's trip was cancelled after Israel launched an attack in southern Lebanon. Iran’s semi-official Tasnim news agency reported that there was no confirmation that Iranian negotiators would travel for talks, explaining that they first wanted to see that the condition about a ceasefire in Lebanon in the interim agreement is implemented.
After posting strong gains for the second consecutive day on Thursday, the USD Index extended its rally and touched its highest level since May 2025 above 101.10 early Friday. At the time of press, the index was trading modestly higher on the day at around 100.90.
The Bank of England maintained its bank rate at 3.75% following the June meeting, as expected. Two members of the Monetary Policy Committee voted in favor of a 25 basis points (bps) rate hike. Still, GBP/USD remained under bearish pressure on Thursday and lost about 0.7%. The pair struggles to stage a rebound early Friday and trades near 1.3200. In the meantime, political developments in the UK put additional weight on Pound Sterling's shoulders. Reporting on the matter, "Labour mayor Andy Burnham cleared a path to ousting Prime Minister Keir Starmer on Friday after winning a parliamentary seat in northern England, a victory that could usher in a new bout of political instability in Britain," Reuters said.
EUR/USD trades at its lowest level since mid-March near 1.1450 in the European session on Friday.
Escrivá flags energy-driven inflation risks but plays down wage spiral fears
European Central Bank (ECB) policymaker José Luis Escrivá's 6.2/10 FXS Speechtracker score on Thursday stood notably above the 4.8/10 historic average, signaling a more attentive and mildly hawkish stance versus usual. Emphasis on energy costs spreading to services and transport, plus uncertainty around oil production recovery and oil prices, highlighted upside risks to Euro-area inflation and supported expectations that policy cannot turn decisively dovish yet. These remarks, however, failed to help the Euro gather strength.
The uncertainty surrounding the US-Iran talks weighs on Gold (XAU/USD) on Friday. After losing more than 1% on Thursday, XAU/USD stretches lower in the European morning and trades near $4,150.
The Japanese Yen continued to weaken against the USD on Thursday, with USD/JPY climbing to its highest level since July 2024 above 161.80. The pair corrects slightly lower but holds comfortably above 161.00 early Friday as investors remain on edge in anticipation of a possible intervention. Bank of Japan (BoJ) Deputy Governor Himino said on Friday that the Japanese central bank likely to keep hiking rates based on economic, price and financial trends. Himino noted that currency moves may impact inflation expectations, core inflation, so they will keep monitoring developments closely.
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.
(The story was corrected on June 19 at 08:14 GMT to note in the intro that the article is for June 19, not June 23.)
- USD/INR rises as the US Dollar strengthens on hawkish sentiment surrounding the Fed's policy outlook.
- The Indian Rupee may receive support from robust FCNR-B inflows, bank fixing-related selling, and aggressive dollar liquidation by exporters.
- Markets turn cautious as US-Iran talks collapse after US VP Vance cancels Swiss summit trip.
The Indian Rupee (INR) declines on Friday after registering modest gains against the US Dollar (USD) in the previous day. The USD/INR pair gains ground as the US Dollar rises on traders pricing in the hawkish sentiment surrounding the Federal Reserve (Fed) policy outlook. Traders will likely observe FX Reserves data released by the Reserve Bank of India, which presents changes in the value of official reserve assets reflecting purchases and sales (including swaps) of foreign exchange by the Central Bank, earnings on foreign securities, and transactions with official institutions overseas.
The newly appointed Federal Reserve (Fed) Chairman Kevin Warsh emphasized that "price stability" remains the Fed's ultimate guiding principle. The Federal Open Market Committee (FOMC) voted unanimously on Wednesday to hold its benchmark overnight borrowing rate steady at a range of 3.5%–3.75%. However, the decision carried a hawkish tone, with nearly half of the officials signaling that at least one rate hike could be required later this year.
Vice President JD Vance's postponed travel
Market caution prevailed Friday as US-Iran talks collapsed following a CNN report that US Vice President JD Vance canceled his planned trip to the Bürgenstock summit. A spokesperson for the Vice President noted that the logistics of these negotiations "have never been simple or predictable," adding that no departure is imminent until a concrete update is established.
Reports also came that the highly anticipated US-Iran talks at Bürgenstock, Switzerland, have been derailed. The Swiss Foreign Ministry confirmed the scheduled Friday meetings will not take place, while Iranian state-aligned media cited ongoing Israeli attacks in southern Lebanon as the catalyst for postponing their delegation's travel.
Solid FCNR-B flows and dollar selling by exporters
However, the USD/INR pair may maintain a downward bias as a shift in daily foreign flows offered fresh support to the Indian Rupee. Market analysts attribute the USD/INR’s downside largely to fixing-related dollar selling across private and foreign banks, along with the robust Foreign Currency Non-Resident Bank (FCNR-B) inflows.
Additionally, aggressive dollar liquidation by exporters further weighed on the pair, offsetting a stronger US Dollar (USD) and prompting the Reserve Bank of India (RBI) to step in intermittently to absorb excess liquidity.
Oil prices ease due to US-Iran initial agreement
The Indian Rupee may gain ground amid a sharp decline in crude oil prices following a diplomatic breakthrough between the US and Iran. According to media reports, the two nations have signed an initial agreement, initiating a 60-day negotiation window for a permanent peace deal. Additionally, the US military confirmed it has lifted its blockade on Iranian ports near the Strait of Hormuz, restoring vital energy shipping routes. While these developments are expected to lift risk sentiment and support emerging market currencies in the near term, traders remain cautious, noting that a full recovery in global shipping and energy volumes will likely take months.
Technical Analysis: USD/INR remains below 94.50, moving averages
USD/INR appreciates after registering nearly 0.5% losses in the previous day, trading around 94.40 at the time of writing. The technical analysis of the daily chart suggests that the spot price remains close to the descending triangle's bottom, indicating that the market is testing whether buyers still have the cash and the will to defend current levels.
The USD/INR pair holds a bearish near-term bias as spot remains below both the nine-period and 50-period Exponential Moving Averages (EMAs). The 14-day Relative Strength Index (RSI) hovers just above 40, suggesting subdued downside momentum but not yet signaling oversold conditions, leaving the pair vulnerable while it trades under this near-term moving-average barrier.
The initial resistance is aligned with the 50-period EMA at 94.72, followed closely by the nine-period EMA at 94.76, forming a tight cap that would need to be reclaimed to ease immediate selling pressure. On the downside, the immediate support lies at the descending triangle bottom around 94.30.
(The technical analysis of this story was written with the help of an AI tool.)
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 New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | INR | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.16% | 0.16% | -0.02% | 0.11% | 0.25% | 0.36% | -0.08% | |
| EUR | -0.16% | -0.00% | -0.15% | -0.05% | 0.10% | 0.19% | -0.16% | |
| GBP | -0.16% | 0.00% | -0.17% | -0.05% | 0.12% | 0.22% | -0.21% | |
| JPY | 0.02% | 0.15% | 0.17% | 0.10% | 0.28% | 0.36% | -0.01% | |
| CAD | -0.11% | 0.05% | 0.05% | -0.10% | 0.19% | 0.25% | -0.13% | |
| AUD | -0.25% | -0.10% | -0.12% | -0.28% | -0.19% | 0.08% | -0.30% | |
| NZD | -0.36% | -0.19% | -0.22% | -0.36% | -0.25% | -0.08% | -0.39% | |
| INR | 0.08% | 0.16% | 0.21% | 0.00% | 0.13% | 0.30% | 0.39% |
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).
Indian Rupee FAQs
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
- Silver stays subdued as inflation and interest rate fears are revived by mounting oil supply concerns.
- Traders adopt caution as US-Iran talks collapse after US VP Vance cancels Swiss summit trip.
- Non-yielding Silver faces headwinds as traders price in hawkish sentiment surrounding the Federal Reserve's policy outlook.
Silver price (XAG/USD) loses ground for the third successive day, trading around $64.70 per troy ounce during the European hours on Friday. Silver price remains under pressure as persistent concerns over inflation and high interest rates are revived by mounting oil supply anxieties.
Market sentiment turned cautious following a CNN report that US Vice President JD Vance canceled his scheduled trip to the Bürgenstock summit, a development that ultimately triggered the collapse of critical US-Iran negotiations.
A spokesperson for Vice President Vance downplayed the disruption, emphasizing that the logistics surrounding these complex negotiations "have never been simple or predictable." The official statement added that no alternative departure plans will be set in motion until a concrete update on the diplomatic situation is firmly established.
The Swiss Foreign Ministry confirmed that the meetings scheduled for Friday have been called off. Meanwhile, Iranian state-aligned media reported that the postponement of their delegation's travel was triggered by ongoing Israeli attacks in southern Lebanon.
Additionally, the non-yielding Silver faces challenges as the traders price in the hawkish sentiment surrounding the Federal Reserve (Fed) policy outlook. Higher borrowing costs increase the opportunity cost of holding non-interest-bearing assets like Silver, reducing their appeal.
The newly appointed Federal Reserve (Fed) Chairman Kevin Warsh emphasized during the post-meeting conference that "price stability" remains the Fed's ultimate guiding principle. Nearly half of the Federal Open Market Committee (FOMC) officials indicated that at least one more rate hike may be necessary later this year.
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.
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.
