Forex News
MUFG’s Derek Halpenny notes that optimism over a potential US–Iran peace deal initially pushed the Dollar lower alongside a sharp drop in Brent crude, but subsequent US strikes have revived uncertainty. He highlights that US yields and a more inflation-focused Federal Reserve stance should keep supporting the Dollar, while EUR/USD and high beta currencies like SEK and AUD remain vulnerable to setbacks in peace negotiations and geopolitical risks.
Yield support versus geopolitical swings
"However, strikes by the US in the region overnight has undermined this optimism and created elevated uncertainty."
"Marco Rubio has played down the US attacks stating that the talks would “take a few days” while President Trump posted that the talks were “proceeding nicely”."
"That would suggest, especially after the US strikes, that there is a risk of a further unwind of the move in markets yesterday."
"US yields look set to continue to provide support for the dollar with Fed officials more aligned with focusing on inflation risks."
"Fed Governor Waller’s speech last week underlined the shift with a signal of a potential rate hike if “inflation does not abate soon”."
"We do not believe a rate hike is coming this year and indeed if a credible peace deal is achieved a rate cut this year is still feasible."
"But until both sides formally announce a deal, investors will likely trade cautiously given the inflationary pressures that are building."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Citing a source close to Tehran's negotiation team, Iran's Tasnim news agency reported on Tuesday that Iran insists $24 billion of frozen Iranian funds must be released in a potential Memorandum of Understanding (MOU) with the United States (US).
According to the report, Iran wants half of that amount be made reachable by the beginning of the MOU announcement.
The agency further noted that Iran's top negotiator, Mohammad Baqr Qalibaf, had travelled to Qatar to reach agreement on a mechanism to implement this demand.
Market reaction
This headline failed to trigger a noticeable market reaction. At the time of press, the US Dollar Index was up 0.05% on the day at 99.05.
Deutsche Bank’s Jim Reid and team note that Brent Oil has fallen sharply as hopes build for a deal to end the Iran war, with prices dropping back below $100. The bank links recent Oil weakness to reduced stagflation fears and lower inflation expectations.
Iran conflict headlines steer Oil prices
"Since the weekend, the real hope is that the days may also be numbered for the war in Iran as well, with momentum building since the start of the weekend that a deal could be in the works. Brent, which ended last week at $103.54/bbl, is this morning trading at $97.87/bbl, around -5.48% lower than Friday’s close."
"However, Brent had got as low as $96.02 late yesterday before news overnight that US and Israeli jets conducted fresh strikes in Southern Iran, hitting missile launch sites and mine-laying boats."
"Recapping last week now, more for those who were off yesterday. Markets put in a strong performance overall, as hopes mounted for some kind of US-Iran deal. So that raised investor expectations that the Strait of Hormuz might reopen in the weeks ahead, which helped to bring down oil prices."
"Indeed, Brent crude fell -5.24% last week to $103.54/bbl, whilst WTI fell -8.37% to $96.60/bbl."
"That decline in oil prices meant investor fears eased about a stagflationary shock to the global economy, supporting bonds and equities on both sides of the Atlantic."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Silver prices (XAG/USD) fell on Tuesday, according to FXStreet data. Silver trades at $76.06 per troy ounce, down 2.56% from the $78.06 it cost on Monday.
Silver prices have increased by 7.01% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 76.06 |
1 Gram | 2.45 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 59.47 on Tuesday, up from 58.53 on Monday.
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.
(An automation tool was used in creating this post.)
Societe Generale’s Kenneth Broux highlights that EUR/GBP is trading within a Head and Shoulders pattern, implying potential downside if key levels give way. A sustained break below 0.8610 is seen as crucial for confirming a deeper decline, with 0.8730/0.8740 acting as near-term resistance and 0.8535 as the next downside objective within a broader descending channel.
Head and Shoulders signals downside risk
"EUR/GBP has evolved within a Head and Shoulders pattern, which points towards potential downside."
"However, a break below the neckline at 0.8610 will be crucial for confirmation."
"If EUR/GBP establishes below 0.8610, the downtrend may extend."
"Recent pivot high around 0.8730/0.8740 remains a key resistance in the short-term."
"The next objective could be located at projection of 0.8535, which is also the lower limit of a multi-month descending channel."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/CAD struggles to gain any meaningful traction amid a combination of diverging forces.
- Geopolitical risks revive USD demand, while recovering Crude Oil prices underpin the Loonie.
- A move beyond the 1.3810-1.3815 confluence is needed to back the case for further gains.
The USD/CAD pair extends its sideways consolidative price move for the second straight day on Tuesday and holds steady near the 1.3800 mark through the first half of the European session. Mixed signals over a potential US-Iran peace deal revive demand for the safe-haven US Dollar (USD), acting as a tailwind for the currency pair. However, a goodish recovery in Crude Oil prices underpin the commodity-linked Loonie and cap spot prices.
From a technical perspective, the USD/CAD pair hovers just below the 1.3810-1.3815 confluence – comprising the 50% Fibonacci retracement level of the November 2025-January 2026 downfall and the 200-day Simple Moving Average (SMA). This tight overhead resistance suggests upside attempts remain vulnerable while those levels cap on a closing basis, despite improving momentum indicators. In fact, the Relative Strength Index sits around 63, and the Moving Average Convergence Divergence (MACD) holds marginally above zero with a modestly positive line.
This hints at constructive but contained bullish pressure, making it prudent to wait for a sustained breakout through the said confluence hurdle before positioning for an extension of the recent move up from the monthly swing low. In the meantime, a clear breakout through the 1.3810-1.3815 area would expose the 61.8% retracement at 1.3885, followed by 1.3995 and the cycle high region near 1.4136.
On the downside, initial support emerges at the 38.2% Fibonacci retracement around 1.3730, ahead of the 23.6% level at 1.3634. A deeper slide toward the structural floor near 1.3479 will likely signal a more pronounced bearish reversal of the recent advance.
(The technical analysis of this story was written with the help of an AI tool.)
USD/CAD daily chart
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.
- EUR/CAD falls as higher crude oil prices strengthen the commodity-linked Canadian Dollar.
- WTI rises due to supply concerns following Monday's US self-defense strikes in southern Iran.
- The Euro may rise due to hawkish sentiment surrounding the European Central Bank's monetary policy outlook.
EUR/CAD depreciates after four days of losses, trading around 1.6060 during the European hours on Tuesday. The currency cross loses ground as the commodity-linked Canadian Dollar (CAD) remains firm amid higher crude oil prices. It is important to note that Canada is one of the world's largest producers and exporters of crude oil, with its energy sector making up a massive portion of its economy.
West Texas Intermediate (WTI) oil price gains ground after four days of losses, trading around $92.50 per barrel at the time of writing. Crude oil prices advance on renewed supply concerns after the United States (US) forces conducted self-defense strikes in southern Iran on Monday.
A US Central Command spokesperson said that the strikes targeted missile launch sites and Iranian vessels attempting to deploy mines. While the US military emphasized its commitment to protecting its forces and maintained that it is still exercising restraint during the ceasefire, US President Donald Trump stated that negotiations toward a deal to end the conflict and reopen the Strait of Hormuz were proceeding nicely.
The EUR/CAD cross struggles as the risk-sensitive Euro (EUR) faces challenges amid rising safe-haven demand. However, the downside of the Euro could be restrained amid hawkish sentiment surrounding the European Central Bank’s (ECB) policy outlook. Traders will take more cues from the preliminary reading of Germany’s inflation data, which is due later on Friday.
ECB board member Isabel Schnabel said on Tuesday that the central bank should raise interest rates in June, even if ongoing peace talks with Iran yield a deal, as the conflict has been far longer than projected and high energy prices are spilling into the broader economy.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.08% | 0.21% | 0.19% | 0.00% | 0.15% | 0.49% | 0.23% | |
| EUR | -0.08% | 0.16% | 0.11% | -0.06% | 0.10% | 0.44% | 0.15% | |
| GBP | -0.21% | -0.16% | -0.04% | -0.21% | -0.05% | 0.27% | 0.00% | |
| JPY | -0.19% | -0.11% | 0.04% | -0.18% | -0.01% | 0.29% | 0.06% | |
| CAD | -0.01% | 0.06% | 0.21% | 0.18% | 0.17% | 0.50% | 0.24% | |
| AUD | -0.15% | -0.10% | 0.05% | 0.01% | -0.17% | 0.32% | 0.06% | |
| NZD | -0.49% | -0.44% | -0.27% | -0.29% | -0.50% | -0.32% | -0.27% | |
| CHF | -0.23% | -0.15% | -0.00% | -0.06% | -0.24% | -0.06% | 0.27% |
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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
DBS Group Research economist Radhika Rao notes that the Indian Rupee has appreciated from near 97.00 to the mid-95.00 area on hopes of easing West Asia tensions, lower Oil prices, and central bank support. She highlights RBI Governor Malhotra’s comments on Rupee undervaluation, a record RBI dividend to the FY27 Budget, and limited fiscal slippage risks.
Rupee supported by policy and flows
"Hopes of a resolution to the West Asia tensions leading to lower oil prices, along with central bank intervention and expectations of a rate hike, have supported rupee’s appreciation over the past few sessions, from near 97.00 low to mid-95.00 on Monday, up a cumulative ~1.5%."
"RBI Governor Malhotra’s observation that the rupee appeared undervalued signalled a notable shift from the traditionally restrained approach toward commenting on currency valuation."
"Add to this, the inflation rationale has also gained credibility amid successive pump price increases (~7% over the past two weeks), a pickup in food, impact of prevailing heatwave conditions and rising business inflation expectations, all of which point to mounting underlying price pressures."
"In the absence of a clear risk of headline inflation spilling over into the core and signs of unanchored inflationary expectations, the central bank is likely to view the energy shock as a supply-side price catalyst and defer tightening policy at the upcoming meeting."
"An argument can, nonetheless, be made on the need to tighten policy in 2HCY26 if the conflict continues, to attract rate sensitive flows."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Dow Jones futures appreciate despite increased risk aversion following the US self-defense strikes in southern Iran.
- Trump stated that negotiations to end the conflict and reopen the Strait of Hormuz are "proceeding nicely.”
- The CME FedWatch tool shows markets pricing a 41% chance of a 25-basis-point Fed rate hike by year-end.
Dow Jones futures advance 0.53% above 50,900 during European hours ahead of the US regular opening on Tuesday. Meanwhile, the S&P 500 rise 0.54% toward 7,550, and the Nasdaq 100 futures gain 0.73% above 29,750.
US stock futures rise despite market caution after the United States (US) forces conducted self-defense strikes in southern Iran on Monday, targeting missile launch sites and Iranian vessels attempting to deploy mines. While the US military emphasized its commitment to protecting its forces, it maintained that it was still exercising restraint during the ceasefire.
US President Donald Trump cautioned that a collapse in talks could trigger fresh military attacks, even as a Pakistani mediator reportedly informed China that an agreement was close. However, traders track diplomatic progress on a potential peace agreement between the United States (US) and Iran. Bloomberg reported on Monday that President Trump stated negotiations toward a deal to end the conflict and reopen the Strait of Hormuz were "proceeding nicely.”
Traders may adopt caution due to fears of an energy-driven inflation shock, strengthened expectations that the Federal Reserve (Fed) may tighten monetary policy. According to the CME FedWatch tool, market participants are now pricing in a nearly 41.0% probability that the Fed will implement a 25-basis-point interest rate increase by the end of the year. Market attention is now turning toward the upcoming PCE inflation data for clearer signals on the Fed’s future policy path.
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 Indian Rupee hits a roadblock after a four-day rally against the US Dollar.
- US forces launched “self-defense strikes” on Iranian vessels for deploying mines.
- India’s FM Sitharaman assures she will take suggestions regarding higher capital gains taxes.
The Indian Rupee’s (INR) rally against the US Dollar (USD) hits a pause after a four-day winning streak on Tuesday. The USD/INR pair rebounds to near 95.45 as the recovery move in oil prices amid fears that the United States (US)-Iran negotiations could face a setback, following Washington’s attacks on Iranian missile sites, has prompted caution among market participants.
As of writing, the WTI Oil price trades 1.5% higher to near $91.00. Currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, face pressure if oil prices rise.
US forces confirmed that strikes against Iran were "defensive"
On Monday, the US Central Command said that it conducted strikes in southern Iran, which were aimed at missile launch sites and Iranian vessels aiming to deploy mines, while clarifying that the nature of the strikes was “defensive” and not meant to end the ceasefire with Tehran.
Meanwhile, US President Donald Trump continues to express confidence that negotiations with Iran towards a permanent resolution are going very well. Trump said on Monday that negotiations toward a deal with Iran to end their conflict and reopen the Strait of Hormuz were "proceeding nicely, Bloomberg reported.
In the past few days, the Indian Rupee gained significantly on hopes of an early breakthrough in the US-Iran negotiations, which led to a sharp decline in oil prices.
India's FM Sitharaman assures to look after Capital Gains Tax
Speaking to reporters on the sidelines of the TEXPROCIL Export Awards Event on Monday, India’s Finance Minister (FM) Nirmala Sitharaman said that the centre will take suggestions from investors regarding higher Short-Term Capital Gains (STCG) and Long-Term Capital Gains (LTCG) taxes. "On this specific issue, and on any issue, we are always ready and willing to listen to the people. We will certainly take their inputs,” Sitharaman said, ANI reported.
Market experts believe that higher LTCG and STCG taxes charged by the Indian government in comparison with other nations make India a less attractive investment avenue for foreign investors.
FIIs turned out net buyers on Monday
Foreign Institutional Investors (FIIs) turned out to be net buyers in the Indian stock market on Monday after remaining net sellers in all the last four trading days. However, the amount invested by overseas investors was very low against the average selling seen during the May 19-22 period. On Monday, FIIs bought shares worth Rs. 821.75 crore, significantly lower than the four-day average selling of Rs. 2,596.63 crore.
Technical Analysis: USD/INR attracts bids near 20-day EMA
USD/INR trades marginally higher at around 95.45 in India's afternoon trading hours on Tuesday. The near-term tone of the pair is uncertain as it wobbles around the 20-day exponential moving average (EMA), which is at 95.37.
The Relative Strength Index (RSI) cools down to 54 after failing to hold overbought levels, indicating the conclusion of the positive momentum; however, the bullish bias remains intact.
Looking down, the pair could slide to 95.00 if it fails to hold the 20-day EMA. As long as USD/INR trades above this moving average, dips are likely to find buyers, keeping the near-term bias tilted to the upside. On the upside, the pair would attempt to return to the all-time high around 97.00 if it manages to recover above the May 22 high at 96.37.
(The technical analysis of this story was written with the help of an AI tool.)
Indian economy FAQs
The Indian economy has averaged a growth rate of 6.13% between 2006 and 2023, which makes it one of the fastest growing in the world. India’s high growth has attracted a lot of foreign investment. This includes Foreign Direct Investment (FDI) into physical projects and Foreign Indirect Investment (FII) by foreign funds into Indian financial markets. The greater the level of investment, the higher the demand for the Rupee (INR). Fluctuations in Dollar-demand from Indian importers also impact INR.
India has to import a great deal of its Oil and gasoline so the price of Oil can have a direct impact on the Rupee. Oil is mostly traded in US Dollars (USD) on international markets so if the price of Oil rises, aggregate demand for USD increases and Indian importers have to sell more Rupees to meet that demand, which is depreciative for the Rupee.
Inflation has a complex effect on the Rupee. Ultimately it indicates an increase in money supply which reduces the Rupee’s overall value. Yet if it rises above the Reserve Bank of India’s (RBI) 4% target, the RBI will raise interest rates to bring it down by reducing credit. Higher interest rates, especially real rates (the difference between interest rates and inflation) strengthen the Rupee. They make India a more profitable place for international investors to park their money. A fall in inflation can be supportive of the Rupee. At the same time lower interest rates can have a depreciatory effect on the Rupee.
India has run a trade deficit for most of its recent history, indicating its imports outweigh its exports. Since the majority of international trade takes place in US Dollars, there are times – due to seasonal demand or order glut – where the high volume of imports leads to significant US Dollar- demand. During these periods the Rupee can weaken as it is heavily sold to meet the demand for Dollars. When markets experience increased volatility, the demand for US Dollars can also shoot up with a similarly negative effect on the Rupee.
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