Forex News
- Silver declines as Middle East tensions boost oil prices, intensifying concerns over inflation and higher interest rates.
- The IDF struck Iranian military targets following a missile salvo on Israel, defying President Trump's criticism of Beirut strikes.
- Strong US jobs data weighed on Silver by boosting expectations of a Fed interest rate hike this year.
Silver price (XAG/USD) remains subdued for the second successive day, trading around $67.70 per troy ounce during the Asian hours on Monday. The non-yielding white metal declines as renewed tensions in the Middle East drive oil prices higher and fuel concerns about inflation and interest rates.
The BBC reported on Monday that the Israel Defense Forces (IDF) reportedly struck military targets in Iran following an Iranian missile salvo aimed at northern Israel. This escalation occurred despite US President Donald Trump's criticism of previous Israeli strikes in Beirut and his active push for a diplomatic resolution between Prime Minister Netanyahu and Tehran.
Earlier, Iran launched multiple rounds of missiles toward Israel, warning against further military action in Lebanon and threatening a fragile ceasefire amidst stalled peace negotiations. Although Israel's military reported that all incoming missiles were successfully intercepted with no casualties, the escalation severely rattled energy markets.
Meanwhile, stronger-than-expected US employment data weighed on precious metals, including Silver, by reinforcing expectations that the Federal Reserve (Fed) could raise interest rates later this year. US Nonfarm Payrolls (NFP) increased by 172,000 jobs in May, compared to 179,000 (revised from 115,000) in the previous reading, and the Unemployment Rate held at 4.3% during the same period.
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.
- USD/CAD attracts some follow-through buying, though bulls seem hesitant amid rallying Oil prices.
- Friday’s upbeat Canadian jobs report also underpins the Loonie and contributes to capping the pair.
- Geopolitical uncertainties and Fed rate hike bets favor USD bulls, backing the case for further gains.
The USD/CAD pair touched a fresh high since late March during the Asian session on Monday and looks to build on the strength further beyond mid-1.3900s. However, a goodish pickup in Crude Oil prices, along with Friday's upbeat Canadian jobs report, underpins the commodity-linked Loonie and might cap any further gains amid a subdued US Dollar (USD) price action.
WTI Crude Oil prices climb around 4.50% as Iran's missile attack on Israel’s Ramat David air base on Sunday night threatened a fragile ceasefire and tempered hopes for a deal to end a three-month-old conflict. Moreover, Statistics Canada reported on Friday that the economy added 87,800 jobs in May and the unemployment rate fell to 6.6%, which further offers support to the Canadian Dollar (CAD) and warrants caution for the USD/CAD bulls.
Meanwhile, the USD pause for a breather following Friday's upbeat US Nonfarm Payrolls (NFP) report-inspired blowout rally to a two-month high and contributed to capping the currency pair. In fact, the economy added 172K jobs in May, compared to 85K estimated and the previous month's upwardly revised reading of 179K. Moreover, the Unemployment Rate held steady at 4.3%, offsetting the expected slowdown in Average Hourly Earnings.
Traders were quick to react and are now pricing in over a 70% chance that the US Federal Reserve (Fed) will hike interest rates by the end of this year. Apart from this, persistent geopolitical uncertainties should act as a tailwind for the safe-haven USD. In the latest developments, the Israeli air force hit military targets in western and central Iran in retaliation for the latter's ballistic missile attack on Israel’s Ramat David air base on Sunday night.
This, in turn, suggests that the path of least resistance for the USD is to the upside and backs the case for an extension of the USD/CAD pair's recent well-established uptrend witnessed over the past month or so. Moving ahead, there isn't any relevant market-moving economic data due for release on Monday, either from the US or Canada, leaving the USD/CAD pair at the mercy of Oil price dynamics and incoming geopolitical headlines.
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.
The Israel Defense Forces (IDF) said that it struck military targets in western and central Iran, hours after Iran fired a salvo of missiles at northern Israel, the BBC reported on Monday.
Iranian state television reported the sound of explosions being heard in Isfahan, Tabriz and Tehran, without immediately elaborating. Earlier Sunday, US President Donald Trump urged his Israeli counterpart not to retaliate for the Iranian strikes, according to several outlets.
Meanwhile, the US State Department told its citizens currently in Jordan to seek shelter due to missiles in the airspace over the country.
Market reaction
Crude oil prices attract some buyers following this headline. At the time of writing, the West Texas Intermediate (WTI) is up 3.22% on the day at $91.45.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
- NZD/USD rises as a weaker US Dollar reflects easing risk aversion after Trump urged Israel-Iran diplomacy over retaliation.
- Renewed Israeli strikes on Lebanon breached the truce, deepening geopolitical tensions and delaying the restart of Strait of Hormuz oil flows.
- The New Zealand Dollar gains support as traders anticipate the Reserve Bank of New Zealand raising interest rates in July.
NZD/USD gains ground after registering over 1% losses in the previous day, trading around 0.5810 during the Asian hours on Monday. The pair appreciates as the US Dollar (USD) edges lower on easing risk aversion after US President Donald Trump criticized Israel's strikes on Beirut. Trump stated he would urge Prime Minister Benjamin Netanyahu to avoid retaliatory action against Iran, while simultaneously calling on Tehran to resume diplomatic negotiations.
The geopolitical friction deepened on Sunday when Israel launched renewed strikes on Lebanon despite their current truce, eroding broader hopes for an end to the regional war and delaying the anticipated restart of crude flows through the critical Strait of Hormuz.
Iran, in response, launched multiple rounds of missiles toward Israel, warning against further military action in Lebanon and threatening a fragile ceasefire amidst stalled peace negotiations. Although Israel's military reported that all incoming missiles were successfully intercepted with no casualties, the escalation severely rattled energy markets.
However, the Greenback may regain its ground as Friday’s data showed that the US economy posted a third straight month of strong job gains in May. US Nonfarm Payrolls (NFP) increased by 172,000 jobs in May, compared to 179,000 (revised from 115,000) in the previous reading, and the Unemployment Rate held at 4.3% during the same period.
The New Zealand Dollar (NZD) receives support as traders price in the prospects of higher interest rates from the Reserve Bank of New Zealand. Markets continue to price in a July rate hike, with the Official Cash Rate (OCR) seen peaking around 3.50% late next year. Traders will likely observe China's inflation and trade balance figures, as well as New Zealand business PMI data later this week.
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
- EUR/USD edges higher to near 1.1535 in Monday’s early Asian session.
- Trump said he will tell Netanyahu not to strike back at Iran.
- ECB is expected to raise interest rates amid the impact of the Iran war.
The EUR/USD pair gains momentum to around 1.1535 during the early Asian trading hours on Monday. Nonetheless, persistent geopolitical tension might cap the upside for the Euro (EUR) against the US dollar (USD). Germany’s Factory Orders and Eurozone Sentix Investor Confidence reports are due later on Monday.
US President Donald Trump said on Sunday that Israel should not retaliate against Iran following its missile barrage, arguing that further action would "blow up" a deal between the three sides. "We don't need another one," Trump told Axios after the Iranian attack before saying he planned to call Israeli Prime Minister Benjamin Netanyahu.
Iranian officials stated it would launch further attacks if Israel continues its offensive in Lebanon, where a deadly Israeli strike hit Beirut on Sunday amid fighting with Iran-backed Hezbollah. Any signs of escalating tensions in the Middle East could boost the Greenback as a safe-haven currency and act as a headwind for the major pair.
Across the pond, the hawkish stance of the European Central Bank (ECB) could provide some support to the shared currency. The European Central Bank (ECB) is likely to raise its deposit rate to 2.25% at its upcoming June policy meeting, with another increase likely in September, a Reuters poll of economists showed.
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
On Monday, the People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead at 6.8198 compared to Friday's fix of 6.8157.
PBOC FAQs
The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.
The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.
Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.
Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.
- GBP/USD bounces off the three-week low touched during the Asian session on Monday.
- The USD bulls pause for a breather following Friday’s upbeat NFP-inspired blowout rally.
- The fundamental backdrop favors the USD bulls and should cap the upside for spot prices.
The GBP/USD pair recovers slightly from a three-week low, touched during the Asian session on Monday, and climbs closer to mid-1.3300s in the last hour. However, the underlying strong bullish sentiment surrounding the US Dollar (USD) warrants some caution before positioning for any further appreciating move.
The USD Index (DXY), which tracks the Greenback against a basket of currencies, shot to a two-week high on Friday in reaction to the upbeat US Nonfarm Payrolls (NFP) report, which reaffirmed hawkish US Federal Reserve (Fed) expectations. The closely-watched employment details showed that the economy added 172K jobs in May, compared to 85K expected and the previous month's upwardly revised reading of 179K. Additional details revealed that the Unemployment Rate held steady at 4.3%, as anticipated, offsetting the widely expected slowdown in Average Hourly Earnings growth to the 3.4% YoY rate from 3.6% in April.
This comes on top of concerns that the war-driven rise in energy prices would fuel inflation and lift bets for an eventual rate hike by the Fed. According to the CME Group's FedWatch Tool, traders are currently pricing in over a 70% chance that the US central bank will raise borrowing costs by at least 25 basis points (bps) in 2026. This, along with geopolitical uncertainties, should continue to act as a tailwind for the safe-haven Greenback. Furthermore, the UK political turmoil, amid a challenge to Prime Minister Keir Starmer's leadership, could undermine the British Pound (GBP) and contribute to keeping a lid on the GBP/USD pair.
Traders might also opt to wait for further development surrounding the Middle East crisis. US President Trump called Israeli Prime Minister Benjamin Netanyahu to tell him not to attack Iran in response to three waves of ballistic missiles at Israel’s Ramat David air base on Sunday night. Trump further told Axios that they are very close to a final deal with Iran and that he does not want it to blow up because of what’s happening now. However, the US and Iran remain at odds over several key issues, including Tehran's nuclear program and the critical Strait of Hormuz. This keeps geopolitical risks in play and favors the USD bulls.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- WTI price rises after Iran's missile strikes on Israel threatened a fragile ceasefire and disrupted Middle East energy supplies.
- Israel's Sunday strikes on Lebanon damaged peace hopes and delayed vital oil flows through the Strait of Hormuz.
- OPEC+ approved a July production quota increase of 188,000 barrels per day during its Sunday meeting.
West Texas Intermediate (WTI) oil price edges lower after opening at a bullish gap, remaining in the positive territory and trading around $90.50 per barrel during the Asian hours on Monday. Crude oil prices surged after Iran launched multiple rounds of missiles toward Israel, warning against further military action in Lebanon and threatening a fragile ceasefire amidst stalled peace negotiations.
Although Israel's military reported that all incoming missiles were successfully intercepted with no casualties, the escalation severely rattled energy markets. The geopolitical friction deepened on Sunday when Israel launched renewed strikes on Lebanon despite their current truce, eroding broader hopes for an end to the regional war and delaying the anticipated restart of crude flows through the critical Strait of Hormuz.
In response to the escalating crisis, US President Donald Trump criticized Israel's strikes on Beirut. Trump stated he would urge Prime Minister Benjamin Netanyahu to avoid retaliatory action against Iran, while simultaneously calling on Tehran to resume diplomatic negotiations. However, the protracted conflict and the ongoing near-closure of the Strait of Hormuz have effectively cut off vital energy supplies from the Persian Gulf, keeping oil prices elevated. This spike erased most of the market losses from Friday, which had dropped on mounting hopes of a de-escalation in the US-Iran conflict.
Amidst these persistent supply risks, OPEC+, the Organization of the Petroleum Exporting Countries and its allies, approved another increase in July oil production quotas by 188,000 barrels per day (bpd) during their Sunday meeting. Despite the higher targets, market analysts expect the decision to have very little impact on global supply. Most OPEC+ members are currently unable to meet their existing output targets due to the Hormuz shipping closure, while Russia's production capacity remains heavily eroded by recent infrastructure attacks.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed on Sunday to increase production by 188,000 barrels per day (bpd) in July despite the continued closure of the Strait of Hormuz.
This is the same as the June hike, which was adjusted down from a monthly rise of 206,000 bpd in May and April to take into account the United Arab Emirates (UAE) exit.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is up 2.35% on the day at $90.65.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
- USD/JPY steadies above 160.00, keeping traders highly alert to potential intervention by Japanese authorities.
- Japan’s Q1 GDP grew 0.5% QoQ, beating expectations and accelerating from Q4 for its strongest expansion since early 2025.
- Iran launching multiple missile waves at northern Israel intensified market anxiety.
USD/JPY moves little after registering modest gains in the previous day, trading around 160.30 during the Asian hours on Monday. With the currency pair holding firm above the critical 160.00 threshold, market participants remain highly alert to potential government intervention. However, trading remained stable following the release of Japan’s first-quarter Gross Domestic Product (GDP) data for 2026.
Japan’s GDP figures highlighted a resilient economic performance, with the economy expanding by 0.5% quarter-on-quarter (QoQ). This matched the preliminary flash data, beat market estimates of 0.3%, and accelerated from the 0.2% growth recorded in the previous quarter, marking the country's strongest quarterly expansion since early 2025.
On an annualized basis, Japan’s economy grew by 1.8% in Q1 2026. While this fell slightly short of the initial 2.1% preliminary estimate, it comfortably outperformed the 1.3% forecast expected by analysts. It also represented a significant acceleration from the downwardly revised 0.7% expansion seen in Q4, delivering the strongest annualized growth rate in four quarters. Further reinforcing this economic momentum, separate data revealed that Japanese bank lending rose by 5.7% year-on-year in May 2026, beating the 5.6% consensus and marking the fastest pace of credit growth since March 2021.
This cluster of strong economic indicators has fueled widespread expectations for monetary tightening. Analysts at Deutsche Bank recently emphasized that accelerating wage growth and robust household spending are firmly supporting the case for the Bank of Japan (BoJ) to raise rates. With both real and nominal wages currently climbing at their fastest rates since 2024, futures markets are now pricing in a high probability of a rate hike at the upcoming June meeting.
Amid escalating tensions in the Middle East over the weekend, the USD/JPY pair remains steady. Market anxiety intensified after Iran launched multiple waves of missiles at northern Israel, a major breach of the fragile April ceasefire following an uncoordinated Israeli airstrike on a Hezbollah position in Beirut. Iranian officials have warned that any subsequent military action from Israel against Lebanon or Iran will be met with a "crushing and comprehensive" response.
Seeking to contain the fallout, US President Donald Trump announced that he is urgently intervening, calling Israeli Prime Minister Benjamin Netanyahu to explicitly request that Israel hold off on a retaliatory strike. The White House is deeply concerned that a major counterattack could completely derail delicate, ongoing negotiations between the sides, which President Trump maintains are on the verge of producing a final agreement with Tehran.
Economic Indicator
Gross Domestic Product (QoQ)
The Gross Domestic Product (GDP), released by Japan’s Cabinet Office on a quarterly basis, is a measure of the total value of all goods and services produced in Japan during a given period. The GDP is considered as the main measure of Japan’s economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.
Read more.Last release: Sun Jun 07, 2026 23:50
Frequency: Quarterly
Actual: 0.5%
Consensus: 0.3%
Previous: 0.5%
Source: Japanese Cabinet Office
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