Forex News
- EUR/USD rises above1.1460 as softer-than-expected US PPI data weighs on the US Dollar.
- Fed Chair Kevin Warsh welcomed the improving inflation trend but stressed that price data remain imperfect and inflation remains unsatisfactory.
- Spain’s HICP held at 3.6% YoY in June, supporting the Euro by limiting expectations of aggressive ECB easing.
EUR/USD trades higher near the 1.1450 area on Wednesday as the US Dollar (USD) weakens following softer-than-expected United States (US) Producer Price Index (PPI) data. The Euro (EUR) also finds some support after Spain’s Harmonized Index of Consumer Prices (HICP) showed inflation remained elevated in June.
US producer inflation surprised to the downside. Headline PPI fell 0.3% MoM in June, compared with expectations for a flat reading, while the annual rate slowed to 5.5% from 6.0%, below the 6.2% consensus. Core PPI, which excludes food and energy, rose 0.2% MoM, also missing the 0.4% forecast, while the yearly core measure came in at 4.7%, below expectations of 5.2%. The softer data added to expectations that US inflation pressure may be easing, dragging the Greenback lower.
Federal Reserve (Fed) Chair Kevin Warsh also struck a measured tone during his testimony before the US Senate Committee on Banking, Housing and Urban Affairs. Warsh said recent inflation data are “an imperfect gauge of underlying inflation” and added that any central bank is happy when data move in the right direction. He also noted that the labor market is in good shape and broadly in balance, although he said inflation still looks “less good,” suggesting the Fed is not ready to declare victory.
On the Euro side, Spain’s final HICP held at 3.6% YoY in June, unchanged from May, while the monthly reading rose 0.6%. The figures suggest inflation remains sticky in one of the Eurozone’s largest economies, which may help limit expectations for aggressive European Central Bank (ECB) easing.
Short-term technical analysis:
On the 4-hour chart, EUR/USD trades at 1.1451, maintaining a mildly bullish tone as it holds above both the 20-period Simple Moving Average (SMA) at 1.1416 and the 100-period SMA at 1.1408. The pair is testing a nearby pivot at 1.1451 while remaining just under the horizontal resistance barrier at 1.1462, with the Relative Strength Index (RSI) hovering near 59 and hinting at constructive but not yet overbought momentum.
On the downside, immediate support is located at the horizontal pivot around 1.1451, followed by successive structural floors at 1.1442 and 1.1431, before the 20-period SMA at 1.1416 and the 100-period SMA at 1.1408 provide deeper demand. On the topside, a break above the 1.1462 resistance would reinforce the bullish bias and open the way for further gains in the near term.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- Silver weakens despite a softer US Dollar as hawkish Fed expectations weigh on sentiment.
- Renewed Middle East tensions keep Oil prices elevated and inflation risks in focus.
- Technically, XAG/USD remains below key moving averages, with the $55.50-$56.00 support zone under pressure.
Silver (XAG/USD) trades on the back foot on Wednesday, struggling to capitalize on a weaker US Dollar (USD) as hawkish Federal Reserve (Fed) expectations keep bears in control. At the time of writing, XAG/USD trades around $57.55, down 1.90% on the day.
Both the US Consumer Price Index (CPI) and Producer Price Index (PPI) reports for June broadly missed market expectations. The softer inflation readings have reduced expectations of an imminent Fed interest rate hike, putting some pressure on the US Dollar.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades around 100.46, easing from an intraday high of 101.03.
However, the data did not materially change the Fed’s hawkish outlook. Inflation risks persist as Oil prices climb following renewed fighting in the Middle East, keeping the possibility of an interest rate hike later this year on the table.
Fed Governor Lisa Cook said on Wednesday that inflation expectations remain anchored, although this depends on maintaining an appropriate monetary policy stance. She warned that the Fed “can’t take its eye off the ball.”
Cook said there are reasons to believe disinflation will occur but noted that price pressures could persist due to tariffs, the Middle East conflict and strong investment in artificial intelligence.
Expectations that the Fed will keep interest rates elevated or even raise them remain a major headwind for Silver, as higher borrowing costs increase the opportunity cost of holding the non-yielding metal.
Technical Analysis
On the 4-hour chart, XAG/USD retains a bearish bias as the price remains below the 50-, 100-, and 200-period Simple Moving Averages (SMAs).
The Relative Strength Index (RSI) at 37 sits just above oversold territory, hinting at persistent downside pressure, while the Moving Average Convergence Divergence (MACD) indicator remains marginally negative, reinforcing a capped tone despite some recent stabilization.
On the topside, initial resistance appears at the 100-period SMA near $59.42, followed closely by the 50-period SMA at $59.57, which together form a nearby supply zone ahead of the more distant 200-period SMA at $64.18.
On the downside, buyers are attempting to build a base in the $55.50-$56.00 region. A break below this area could trigger a deeper corrective decline.
(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.
- DJIA tested below 52,500 after surrendering a 370-point afternoon rally.
- June wholesale prices unexpectedly fell 0.3% MoM and the New York Fed president called the inflation peak, yet futures still price roughly 60% odds of higher rates by the end of October.
- Semiconductor names shed as much as 11% while three of the index's technology heavyweights rose about 3% apiece; Thursday's Retail Sales decide whether the fade has legs.
The Dow Jones Industrial Average spent most of Wednesday rewarding the disinflation trade and the final two hours dismantling it. A surprise negative June wholesale inflation print at 12:30 GMT set off a grind that stretched 370 points to a session high of 52,830, and a late unwind then handed every one of them back. The index trades near 52,500, down around 0.12% on the day.
Disinflation arrives with an asterisk
The June Producer Price Index (PPI) fell 0.3% MoM against a consensus for a flat reading, pulling the annual rate down to 5.5% from 6.0% and undershooting the 6.2% forecast. The core measure rose a softer-than-expected 0.2% MoM, landing one day after Tuesday's cooler Consumer Price Index (CPI) release had already prompted traders to scale back near-term tightening bets. The New York Federal Reserve president supplied the rhetorical garnish, arguing there are encouraging reasons to believe inflation has peaked and should edge lower over the coming quarters.
The awkward detail sits in the annual columns, where headline wholesale inflation at 5.5% and core at 4.7% both run at more than double the Fed's 2% target; the core rate even accelerated from the prior month's 4.6% while beating forecasts. Research desks canvassed after the release argued that single soft prints do not retire hike risk when the level remains this far from mandate, and that the tape is overreacting to one number at a time.
Autumn hikes refuse to leave the tape
Rate futures tell the same story in cleaner numbers: pricing for a move at this month's meeting has faded since Tuesday's CPI, yet markets still assign roughly 60% odds that the policy rate sits a quarter point or half point higher by the conclusion of the October meeting. The Fed Chair's 14:00 GMT congressional testimony came and went without dislodging that pricing.
The real economy keeps arguing the hawks' side of the ledger, with the July Empire State Manufacturing Index printing 15.6 against an 8.8 consensus and a 5.7 prior. The Beige Book and a run of Fed speakers round out a crowded docket, which gives the committee every opportunity to keep its options open into this month's decision.
The average dodges the shrapnel and bleeds anyway
Semiconductors supplied the session's carnage, and the sector managed the impressive trick of gapping higher premarket on a guidance raise from Dutch lithography monopolist ASML before unwinding the entire bid. Micron (MU) trades down 9%, SanDisk (SNDK) down more than 11%, Lam Research (LRCX) off more than 6%, with Intel (INTC), Advanced Micro Devices (AMD) and Marvell (MRVL) between 5% and 7% lower; the benchmark semiconductor basket sheds 4%.
The Dow Jones Industrial Average sidesteps nearly all of that by construction, since none of the names on the casualty list holds a seat among its 30 constituents, and three that do, Apple (AAPL), Microsoft (MSFT) and Amazon (AMZN), trade up roughly 3% apiece. An index that gets that kind of sponsorship from its technology bench and still sits red near the session low is an index whose other 27 members spent the day getting sold; the breadth message is uglier than the headline change suggests.
Hormuz keeps the inflation call honest
Crude Oil complicates the peak-inflation arithmetic from the supply side, with West Texas Intermediate (WTI) holding above $78 per barrel and Brent above $83 after Central Command confirmed a further round of strikes on Iranian targets. Tehran's attacks on commercial shipping around the Strait of Hormuz have kept last month's peace framework functionally suspended, and the war premium in the barrel is now a July problem layered on top of June's friendlier data.
That sequencing matters for anyone extending today's soft PPI into a policy call, because the wholesale disinflation on the tape predates the latest escalation almost entirely. Energy passthrough with a lag is precisely the sort of supply shock the committee has flagged while holding rates, and it argues for treating the morning's rally as a trade rather than a regime change.
Thursday hands the microphone to the consumer
Thursday's 12:30 GMT slate is the week's real referendum, headlined by June Retail Sales with consensus at 0.2% MoM after May's 0.9% surge, the control group seen at 0.5% after 0.7%, and the ex-autos measure expected at -0.1%. Initial Jobless Claims are seen near 217K, and the Philadelphia Fed survey is expected at 13 after 10.3, neither of which suggests a labour market forcing the committee's hand.
Friday adds the preliminary July Michigan Consumer Sentiment Index, seen at 51 after 49.5, along with the one-year inflation expectations series that printed 4.6% last month. A soft consumer feeds the peak-inflation narrative while quietly denting the earnings math; a hot control group re-arms the October hike pricing within 24 hours of today's celebration. Either outcome lands on a tape that has already shown how it treats good news.
Dow Jones Industrial Average technical levels
Resistance: The 52,700 shelf that gave way during the afternoon slide is the first hurdle, ahead of the rejected session high at 52,830. Beyond that, the 53,000 handle guards the early-July record zone, with the daily Stochastic Relative Strength Index curling down out of the overbought band at 69.
Support: Wednesday's low near 52,440 is the immediate floor, and the 52,000 handle sits behind it, the level that absorbed last week's washout and capped the late-June consolidation. The rising 50-day Exponential Moving Average near 51,280 is the last structural backstop before the picture changes character.
Bias: Bearish. A 370-point rejection from 52,830 on the day the disinflation case landed its best headline in months leaves sellers holding the tape into Thursday's Retail Sales; below 52,700 the path of least resistance points at the 52,000 handle. Only a daily close back above 52,830 repairs the structure and reopens the record zone.
Dow Jones 5-minute chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
- The Japanese Yen struggles to extend modest gains despite a broadly weaker US Dollar.
- Softer US CPI and PPI data reduce expectations of a near-term Fed rate hike.
- Rising Oil prices, fiscal concerns and the wide US-Japan rate gap weigh on the Yen.
The Japanese Yen (JPY) holds modest gains against the US Dollar (USD) on Wednesday but struggles to extend its recovery despite a broadly weaker Greenback following softer-than-expected US inflation data. At the time of writing, USD/JPY trades around 162.14, down 0.07% on the day.
The US Producer Price Index (PPI) fell 0.3% in June after a 0.6% rise in May. The annual PPI rate slowed to 5.5% from 6.0%, below the 6.2% forecast. Core PPI rose 0.2% in June, missing the 0.4% forecast, while the annual core rate edged up to 4.7% from 4.6%, below expectations of 5.2%.
The data follow softer-than-expected US Consumer Price Index (CPI) figures released on Tuesday. Together, the weaker inflation readings have reduced expectations of a near-term Federal Reserve (Fed) interest rate hike, weighing on the US Dollar.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades around 100.70, easing from an intraday high of 101.03.
However, the recent slowdown in inflation could prove temporary as renewed fighting between the US and Iran pushes Crude Oil prices higher. New York Fed President John Williams also said on Wednesday that inflation is still too high and must return to the central bank’s 2% target on a sustained basis.
On the Japanese side, traders remain alert for possible intervention by Tokyo as the Yen stays pinned near 40-year lows. Hopes that Japan’s Government Pension Investment Fund (GPIF) could shift more money into domestic assets have also provided little lasting support after Reuters reported there are no immediate plans to revise its asset allocation targets.
Rising Oil prices add to the pressure because Japan relies heavily on imported energy. Concerns over the country’s heavy public debt and the government’s expansionary fiscal plans also weigh on the Yen.
Prime Minister Sanae Takaichi said on Wednesday that stronger domestic investment and improved international competitiveness would help raise potential growth and maintain confidence in the Yen. Still, the wide US-Japan interest rate gap keeps the broader USD/JPY bias tilted to the upside.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.13% | -0.76% | -0.06% | -0.08% | -0.32% | -0.42% | -0.32% | |
| EUR | 0.13% | -0.68% | 0.06% | 0.05% | -0.24% | -0.34% | -0.20% | |
| GBP | 0.76% | 0.68% | 0.72% | 0.72% | 0.42% | 0.34% | 0.48% | |
| JPY | 0.06% | -0.06% | -0.72% | -0.00% | -0.25% | -0.36% | -0.26% | |
| CAD | 0.08% | -0.05% | -0.72% | 0.00% | -0.24% | -0.40% | -0.25% | |
| AUD | 0.32% | 0.24% | -0.42% | 0.25% | 0.24% | -0.12% | -0.01% | |
| NZD | 0.42% | 0.34% | -0.34% | 0.36% | 0.40% | 0.12% | 0.14% | |
| CHF | 0.32% | 0.20% | -0.48% | 0.26% | 0.25% | 0.01% | -0.14% |
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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
Federal Reserve (Fed) Chair Kevin Warsh said on Wednesday that current inflation pressure will not be permanent, while acknowledging that the latest inflation measures remain unsatisfactory. Warsh made the remarks while testifying at the Semiannual Monetary Policy Report before the US Senate Committee on Banking, Housing and Urban Affairs.
Key takeaways:
Inflation will not be permanent.
Monetary policy has contributed to inflation.
The labor market remains in good shape.
It is unclear whether previous interest rate cuts were responsible for the labor market’s resilience.
Warsh is not satisfied with any of the current inflation measures.
The Federal Reserve is expected to receive taskforce briefings in early September.
The labor market appears to be broadly balanced.
There is no fixed limit to how quickly the US economy can grow.
Inflation, which forms part of the Fed’s dual mandate, remains less encouraging.
The labor market is undergoing significant structural change.”
Warsh highlights AI as long-term jobs and wage driver
Fed Chair Warsh’s testimony scores 5.4/10 on the FXS Speechtracker, notably softer relative to the historical average of 7/10, signaling a more nuanced and less forceful tone. By calling recent inflation data an “imperfect gauge of underlying inflation” and stressing that whether AI proves inflationary is “up to the Fed,” Warsh reinforces the Fed’s policy primacy, which tempers immediate hawkish implications for the US Dollar.
The emphasis on AI as a long-term job and wage creator, coupled with acknowledgment of near-term disruption and the “puzzle” of translating productivity into wages, points to a cautious, medium-term constructive view on growth rather than imminent policy tightening.
The FXS Fed Sentiment Index for Warsh's comments was unchanged, moving 0.00 points to a still-elevated level of 126.13, confirming that the broader policy backdrop remains firmly in hawkish territory despite the more moderate speech tone captured by the FXS Speechtracker. The lack of index movement suggests that Warsh’s remarks on AI, wages, and inflation data did not materially shift market perceptions of the Fed’s stance, leaving the US Dollar supported by the prevailing hawkish baseline.
- US PPI cools more than expected, pressuring Dollar broadly.
- Oil rebound keeps inflation risks alive despite June disinflation.
- Burnham transition and EU hopes support Sterling sentiment.
The Pound Sterling rises by some 0.60% against the US Dollar after the latest Producer Price Index (PPI) in the US showed prices edging lower, driven by the dip in energy prices since late May. At the time of writing, the GBP/USD trades at 1.3460 after bouncing off a daily low of 1.3370.
GBP/USD rises as softer US prices trim Fed hike bets
The US Bureau of Labour Statistics (BLS) reported that the PPI in June fell from 6% to 5.5% YoY, below estimates of a 6.2% increase. Excluding volatile items, the so-called Core PPI also slowed from 4.6% to 4.7% YoY, beneath forecasts of 5.2%.
The US-Iran signing the Memorandum of Understanding (MoU), weighed on energy prices as Western Texas Intermediate (WTI) dipped from around $97 early in June to $68 by the end of the last month, for a 30% plunge.
However, the escalation of the Middle East conflict. could trigger a leg up in inflation, as WTI has risen nearly 15% to $80 since reaching the $68 barrier by the end of June.
In the meantime, the Fed Chair Kevin Warsh is crossing the wires. HE said the surge in prices is also driven by AI, adding that he can’t guarantee there won't be short-term disruptions due to its influence.
Earlier, the New York Fed President John Williams said that there’s no clear direction for the path of interest rates, adding that economic growth is solid, as well as the labor market. Williams commented that the Middle East conflict poses “significant risks” that so far the US economy has absorbed” fairly well.
Across the pond, uncertainty and tensions over UK politics eased, a tailwind for Sterling, which continues to climb towards 1.3500. Speculation that Britain could close ties with the European Union is another reason behind the GBP/USD rise.
Andy Burnham is expected to be announced as Labour leader on Friday and named prime minister on July 20, shifting focus to his finance minister choice amid the nation's shaky public finances.
Regarding interest rates, money markets had priced in 36 basis points (bps) of tightening by the Bank of England (BoE), towards the end of the year. For the July 30 meeting, the odds for holding rats are 87%, according to Prime Terminal data.
GBP/USD Price Forecast: Technical outlook
In the daily chart, GBP/USD trades at 1.3487, maintaining a bullish near-term bias as spot holds above the cluster of simple moving averages (SMA) around 1.3385 and the rising trend-line base near 1.3159. Price is now pressing the downward resistance trend line at 1.3492, while the Relative Strength Index (14) at 63 suggests firm but not yet overbought momentum, reinforced by a still-elevated FXS Fed Sentiment Index, which hints at supportive macro backdrop for sterling in the short term.
On the topside, immediate resistance is located at the descending trend-line break level around 1.3492, where a clear daily close above would open the way for a continuation of the advance. On the downside, initial support is seen at the latest price floor near 1.3487, followed by the grouped daily SMAs around 1.3385, with the broader bullish structure anchored by the upward trend-line origin near 1.3159 as deeper support.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling Price This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.26% | -0.72% | 0.21% | -0.76% | -0.77% | -1.31% | -0.11% | |
| EUR | 0.26% | -0.46% | 0.52% | -0.51% | -0.55% | -1.06% | 0.15% | |
| GBP | 0.72% | 0.46% | 0.94% | -0.05% | -0.09% | -0.61% | 0.66% | |
| JPY | -0.21% | -0.52% | -0.94% | -1.05% | -0.99% | -1.57% | -0.37% | |
| CAD | 0.76% | 0.51% | 0.05% | 1.05% | 0.07% | -0.52% | 0.70% | |
| AUD | 0.77% | 0.55% | 0.09% | 0.99% | -0.07% | -0.51% | 0.62% | |
| NZD | 1.31% | 1.06% | 0.61% | 1.57% | 0.52% | 0.51% | 1.27% | |
| CHF | 0.11% | -0.15% | -0.66% | 0.37% | -0.70% | -0.62% | -1.27% |
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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
The Bank of Canada (BoC) left its policy rate unchanged at 2.25% on Wednesday, as widely anticipated. Governor Tiff Macklem leaned hawkish in the press conference that followed the announcement, as policymakers seem confident about growth and inflation perspectives. Macklem noted that the biggest risks are conflicts in the Middle East and the trade relationship with the US, while repeating decisions will be made one at a time.
BoC Macklem press conference highlights
Economic growth looks to have resumed in Canada.
The economy is projected to grow by 1.8% in both 2027 and 2028.
Longer-term inflation expectations remain well anchored.
Biggest risks are conflicts with the Middle East and the trade relationship with the US.
We will not let higher Oil prices become persistent inflation.
Inflation in Canada is poised to ease gradually, provided global Oil prices decline from elevated levels.
Q2 is looking pretty solid, will be assessing how sustainable the pickup is.
Some businesses like aluminium, are finding new markets.
Higher oil prices are adding to Oil and gas investment.
Exports adjusting to US tariffs and growing.
Signs that the economy is expanding are clearer.
The Canadian dollar weakness has not been a major factor in rate decisions.
If oil prices go higher and remain higher, there may well still be a need for consecutive hikes. This is not our base case.
We're going to take our decisions one at a time."
This section below was published at 13:45 GMT to cover the Bank of Canada's policy announcements and the initial market reaction.
BoC Monetary Policy Report key takeaways
After a year of weakness, Canada’s economy is showing signs of improvement.
Growth is expected to pick up, and inflation will ease gradually from its recent peak.
Uncertainty is still high.
The Canadian economy has been adjusting to US tariffs.
Middle East war-driven inflation’s spillovers to other goods and services remain contained.
Growth in the second quarter is anticipated to be solid at 2.5%.
Inflation is expected to ease to about 2.5% in the second half of 2026 and reach the 2% target by early 2027."
Market reaction
The Canadian Dollar (CAD) barely reacted to the anticipated outcome, and the USD/CAD pair hovers around 1.4050.
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Japanese Yen.
| CAD | EUR | GBP | JPY | USD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| CAD | -0.06% | -0.31% | 0.01% | -0.04% | -0.26% | -0.33% | -0.06% | |
| EUR | 0.06% | -0.27% | 0.04% | 0.05% | -0.24% | -0.25% | -0.00% | |
| GBP | 0.31% | 0.27% | 0.28% | 0.31% | 0.02% | -0.00% | 0.26% | |
| JPY | -0.01% | -0.04% | -0.28% | 0.00% | -0.25% | -0.27% | -0.05% | |
| USD | 0.04% | -0.05% | -0.31% | -0.01% | -0.25% | -0.26% | -0.05% | |
| AUD | 0.26% | 0.24% | -0.02% | 0.25% | 0.25% | -0.05% | 0.19% | |
| NZD | 0.33% | 0.25% | 0.00% | 0.27% | 0.26% | 0.05% | 0.26% | |
| CHF | 0.06% | 0.00% | -0.26% | 0.05% | 0.05% | -0.19% | -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 Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
This section below was published as a preview of the Bank of Canada's (BoC) monetary policy announcements at 09:00 GMT.
- The Bank of Canada is expected to keep its interest rate at 2.25%.
- The Canadian Dollar extends its recovery vs the US Dollar.
- Markets pencil in just over 15 bps of BoC tightening by year-end.
The Bank of Canada (BoC) is widely expected to keep its policy rate unchanged at 2.25% on Wednesday. This would be the sixth consecutive event with the central bank keeping its hand steady.
The BoC left its policy rate unchanged at 2.25% last month, as widely anticipated. The statement and Governor Tiff Macklem's press conference reinforced a patient approach, as policymakers continue to balance lingering inflation risks against an economy that remains in excess supply.
The central bank expects inflation to hover around 3% in the near term before gradually easing back toward its 2% target. In addition, policymakers also reiterated that they are largely looking through the impact of the Middle East conflict on headline inflation, noting limited evidence that higher energy prices are feeding through more broadly into consumer prices.
While the board stressed it would not allow higher energy costs to become a source of persistent inflation, it gave little indication that a policy response is imminent. Additionally, rate setters also pointed to a likely rebound in growth during Q2, although they cautioned that economic activity remains weak and uncertainty surrounding US trade policy persists.
During his press conference, Governor Macklem emphasised that any future policy move will depend on economic conditions rather than on a predetermined timeline. He noted that core inflation has edged lower, reiterated that economic weakness continues to weigh on prices and argued that little has changed since the previous meeting, with incoming data broadly evolving as expected.
Inflation, however, remains the key watch point after the headline CPI rose by 3.2% in the year to May, above the previous month’s print of 2.8%. In the same direction, the BoC’s core inflation ticked higher to 2.2% from a year earlier. The bank’s preferred measures — CPI-Common, Trimmed and Median — came in mixed. But at 2.7%, 2% and 2.1%, respectively, they still remain above target.
When will the BoC release its monetary policy decision, and how could it affect USD/CAD?
The Bank of Canada will announce its policy decision on Wednesday at 13:45 GMT, followed by a press conference with Governor Tiff Macklem at 14:30 GMT.
Markets anticipate the central bank maintaining its current stance, with a projected tightening of nearly 17 basis points by the end of 2026.
Pablo Piovano, Senior Analyst at FXStreet, points out that further gains in USD/CAD now appear limited by the 1.4250 zone, forcing the pair to recede and revisit the area of multi-week troughs near 1.4050.
“In case the selling pressure gathers traction, the pair’s next relevant support is expected at the provisional 55-day Simple Moving Average (SMA) near 1.3930, while the loss of this region exposes a move toward the critical 200-day SMA around 1.3850, closely followed by the interim 100-day SMA. A deeper and sustained retracement from here should see the next contention at the May floor at 1.3549 (May 1)," Piovano adds.
On the upside, Piovano sees the next hurdle at the YTD peak of 1.4248 (June 24 and 25). The break above the latter could prompt the pair to attempt a move toward the April 2025 ceiling at 1.4414 (April 1).
“Momentum favours extra losses,” he adds, noting that the Relative Strength Index (RSI) is receding further and is revisiting the 44 region, while the Average Directional Index (ADX), just over 43, suggests the underlying trend remains pretty solid.
Economic Indicator
BoC Interest Rate Decision
The Bank of Canada (BoC) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoC believes inflation will be above target (hawkish), it will raise interest rates in order to bring it down. This is bullish for the CAD since higher interest rates attract greater inflows of foreign capital. Likewise, if the BoC sees inflation falling below target (dovish) it will lower interest rates in order to give the Canadian economy a boost in the hope inflation will rise back up. This is bearish for CAD since it detracts from foreign capital flowing into the country.
Read more.Next release: Wed Jul 15, 2026 13:45
Frequency: Irregular
Consensus: 2.25%
Previous: 2.25%
Source: Bank of Canada
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.
- Gold reverses intraday losses as soft US PPI data weighs on the US Dollar and Treasury yields.
- Softer US CPI and PPI data cool near-term Fed rate hike bets, but rising Oil prices keep inflation risks alive.
- Technically, XAU/USD keeps a bearish bias below its key moving averages, with sellers eyeing a sustained break below $4,000.
Gold (XAU/USD) steadies on Wednesday, erasing intraday losses after softer-than-expected US Producer Price Index (PPI) data push the US Dollar (USD) and US Treasury yields lower.
At the time of writing, XAU/USD trades around $4,060, up 0.15% on the day, rebounding from an intraday low of $4,017.
The headline PPI fell 0.3% MoM in June, below the forecast of 0%, after rising 0.6% in May. On an annual basis, producer inflation slowed to 5.5% from 6.0%, also undershooting the 6.2% forecast.
Core PPI, which excludes food and energy, rose 0.2% MoM, below expectations for a 0.4% increase but above the previous 0.1% gain. The annual core rate edged up to 4.7% from 4.6%, but it remained below the 5.2% forecast.
The latest figures follow weaker-than-expected US Consumer Price Index (CPI) data released on Tuesday. The softer inflation readings have reduced expectations of an immediate Federal Reserve (Fed) interest rate hike, lifting the non-yielding metal.
Still, the metal lacks strong upside momentum as inflation risks persist, with Oil prices creeping higher again following renewed fighting in the Middle East. This keeps the possibility of a Fed interest rate hike later this year on the table.
In an interview with Fox News on Tuesday, US President Donald Trump warned that military strikes against Iran would intensify unless Tehran resumed negotiations. "Next week comes the bridges. We're going to knock out all their power plants. We're going to knock out all their bridges unless they get to the table and negotiate," Trump said.
New York Fed President John Williams said on Wednesday that with inflation still running high, it is imperative to return it to the 2% target on a sustained basis. Williams added that the current policy stance is well-positioned to achieve that goal.
Williams expects headline inflation to ease to around 3.25% by the end of this year, move closer to the Fed’s target in 2027 and reach 2% in 2028.
Meanwhile, Fed Chair Kevin Warsh reiterated the central bank’s commitment to bringing inflation back to its target during his congressional testimony on Tuesday, saying “no tolerance for persistently elevated inflation.”
Technical analysis: XAU/USD keeps bearish bias with $4,000 support in focus
On the daily chart, XAU/USD retains a bearish near-term bias as the price holds well below the 50-day, 100-day and 200-day Simple Moving Averages (SMAs). The clustering of these longer-term SMAs above spot suggests upside attempts are likely to be capped for now.
The Relative Strength Index (RSI) around 40 stays in neutral-to-soft territory, hinting at limited bullish momentum despite a pause in the recent slide. The Average Directional Index (ADX) at 38.37 points to a still-established trend backdrop.
On the topside, initial resistance emerges at the horizontal level of $4,200, ahead of the 50-day SMA near $4,319 and another barrier at $4,400, with the 200-day SMA at $4,495 and the 100-day SMA at $4,559 marking a broader supply zone higher up.
On the downside, immediate support is seen at the psychological $4,000 handle, and a sustained break below this floor would likely open the way for a deeper bearish extension in line with the prevailing trend structure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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 Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | -0.11% | 0.06% | 0.06% | -0.14% | -0.09% | 0.23% | |
| EUR | -0.06% | -0.22% | 0.00% | -0.01% | -0.25% | -0.21% | 0.16% | |
| GBP | 0.11% | 0.22% | 0.20% | 0.20% | -0.04% | 0.01% | 0.37% | |
| JPY | -0.06% | 0.00% | -0.20% | -0.01% | -0.22% | -0.17% | 0.15% | |
| CAD | -0.06% | 0.00% | -0.20% | 0.00% | -0.21% | -0.21% | 0.17% | |
| AUD | 0.14% | 0.25% | 0.04% | 0.22% | 0.21% | 0.03% | 0.36% | |
| NZD | 0.09% | 0.21% | -0.01% | 0.17% | 0.21% | -0.03% | 0.36% | |
| CHF | -0.23% | -0.16% | -0.37% | -0.15% | -0.17% | -0.36% | -0.36% |
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).
Federal Reserve (Fed) Chair Kevin Warsh said on Wednesday that recent inflation figures provide an imperfect measure of underlying inflation. Warsh made the remarks while testifying on the Semiannual Monetary Policy Report before the US Senate Committee on Banking, Housing and Urban Affairs.
Key takeaways:
Any new leader should seek advice from the best minds available.
Recent inflation data are an imperfect gauge of underlying inflation.
The latest price figures remain imperfect measures of persistent inflation pressures.
Any central bank welcomes data moving in the right direction.
Whether Artificial Intelligence (AI) proves inflationary will depend on the Federal Reserve’s policy response.
Wages have increased at a reasonable pace.
The timing of stronger wage gains from productivity improvements remains a “puzzle".
In the near term, AI investment is positive for employment.
AI is expected to become a long-term job creator.
Over time, AI should support wages and employment.
In the transition period, AI is likely to cause disruption.
Warsh cannot guarantee that AI will cause no short-term disruption or provide reassurance about its immediate effect on jobs."
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