Forex News
- NZD/USD is lower near 0.5870 as the US Dollar gains against every major currency.
- Oil's jump offers the Kiwi no support, with Gold and Silver also falling on the same headlines.
- Chinese trade figures overnight and US Nonfarm Payrolls on Friday are the next drivers.
NZD/USD trades lower near the 0.5900 level at the time of writing, with no New Zealand catalyst behind the move. The US Dollar Index (DXY) is up 0.26% near the 100.00 level, and the Kiwi is simply on the wrong side of it.
Oil is up 3% at $77.30 per barrel after reports that vessels linked to the United States (US), Israel, and other countries Tehran considers hostile would be barred from the Strait of Hormuz under the proposed agreement. But Gold is down 0.09%, and Silver is off 0.84% on the same news.
China is the more direct problem, and it reports overnight. Exports are expected to have grown 22.2% in the year to July, down from 27%, with imports slowing to 27.9% from 36% and the trade surplus narrowing to $107 billion from $125.62 billion. Those are still strong figures, but a slowdown in New Zealand's largest export market matters more to the Kiwi than anything on the domestic calendar this week.
US Nonfarm Payrolls follow on Friday, with the consensus at 80K after June's 57K and average hourly earnings seen up 0.3% on the month. A firm wage print would extend the Greenback's recovery and leave the kiwi squeezed from both directions.
Short-term technical analysis:
On the 4-hour chart, NZD/USD trades at 0.5869, with the near-term tone capped as the pair sits under the 20-period Simple Moving Average (SMA) at 0.5876 while holding above the 100-period SMA at 0.5835. The horizontal band of levels just overhead between 0.5872 and 0.5882 reinforces this immediate supply zone, keeping upside attempts in check, while the Relative Strength Index (RSI) around 51 suggests neutral-to-firm momentum that is yet to translate into a clear bullish breakout.
On the topside, initial resistance is clustered at 0.5872 and 0.5876, followed by 0.5882, with more substantial barriers seen at 0.5907 and 0.5930 before 0.5965. On the downside, immediate support is located at 0.5860, ahead of the 100-period SMA at 0.5835, which acts as a deeper structural floor for any corrective slide.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Here is what you need to know for Friday, August 7:
The US Dollar (USD) posted gains against every major currency on Thursday, with the US Dollar Index (DXY) up 0.26% near the 100.00 level as Oil rallied 3% on the reported Strait of Hormuz vessel ban, while Gold and Silver declined.
The Greenback was supported by positive labor market data, with Initial Jobless Claims missing forecasts at 199K and Challenger Job Cuts at 33.429K in July, its lowest print in the last two years. With Nonfarm Payrolls a day away, the path of least resistance was to trim risk, and that meant buying US Dollars.
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 | 0.29% | 0.14% | 0.46% | 0.04% | 0.39% | 0.32% | 0.67% | |
| EUR | -0.29% | -0.15% | 0.18% | -0.25% | 0.09% | 0.04% | 0.37% | |
| GBP | -0.14% | 0.15% | 0.32% | -0.08% | 0.23% | 0.18% | 0.53% | |
| JPY | -0.46% | -0.18% | -0.32% | -0.42% | -0.09% | -0.12% | 0.22% | |
| CAD | -0.04% | 0.25% | 0.08% | 0.42% | 0.33% | 0.30% | 0.64% | |
| AUD | -0.39% | -0.09% | -0.23% | 0.09% | -0.33% | -0.04% | 0.29% | |
| NZD | -0.32% | -0.04% | -0.18% | 0.12% | -0.30% | 0.04% | 0.36% | |
| CHF | -0.67% | -0.37% | -0.53% | -0.22% | -0.64% | -0.29% | -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).
The commodity picture points the same way. West Texas Intermediate (WTI) Oil is up 3% at $77 per barrel after reports that vessels linked to the United States (US), Israel, and other countries Tehran considers hostile would be barred from the Strait of Hormuz under the proposed agreement. Gold is down 0.09% at $4,243 after briefly recovering the $4,300 level, and Silver is off 0.84% at $62.
EUR/USD falls around 0.27% to trade near the 1.1500 landmark, handing back most of the recovery that carried the pair toward the top of its recent range earlier in the week.
GBP/USD eases around 0.11% to near 1.3450, with Cable still stuck in the range it has held all week without domestic catalysts.
USD/JPY rises around 0.39% to near the 158.40 region, one of the biggest movers of the session, extending its recovery from the lows reached after last week's intervention.
AUD/USD drops around 0.36% to near 0.7030, with the Aussie getting no lift from crude and facing Chinese trade figures overnight.
On Friday, China opens the session with July trade figures, while Europe brings German Industrial Production, forecast at 0.1% MoM in June after 0.9%, alongside the German Trade Balance, seen at €17.4 billion from €19.1 billion.
In the US, the Nonfarm Payrolls report is the main event. The consensus is 80K after June's 57K, with the Unemployment Rate steady at 4.2% and Average Hourly Earnings up 0.3% MoM and 3.5% YoY. Wages are the number to watch. Federal Reserve (Fed) Governor Lisa Cook said on Wednesday she was open to the idea that rates may need to rise to deal with inflation she called too high, so a firm earnings print would do more for the Dollar than a strong headline.
Canada will release jobs data, with the Net Change in Employment expected at 15K after 18.2K and the Unemployment Rate holding at 6.5%.
UOB Global Economics & Markets Research, led by economists Enrico Tanuwidjaja and Sathit Talaengsatya, analyzes Thailand’s July CPI undershoot driven by lower fuel prices while core inflation edges higher. They emphasize that inflation remains supply-led, with upstream PPI still elevated, and maintain forecasts for headline CPI at 2.8% in 2026 and 1.4% in 2027 alongside a steady BOT policy rate at 1.00% through end-2027.
Supply-led CPI and policy outlook
"Jul headline CPI eased to +1.95% y/y and -0.73% m/m, from +2.42% y/y and - 0.34% m/m in Jun, undershooting the +2.55% Reuters consensus and the BOT’s earlier monthly reference path. Core CPI nevertheless firmed to +1.34% y/y and +0.08% m/m, signaling continued, albeit contained, indirect cost pass-through."
"The BOT’s Jun baseline projects headline inflation at 2.8% in 2026 and 1.4% in 2027, and core inflation at 1.5% and 1.4%, respectively, as supply pressures and unfavorable base effects fade next year."
"We maintain our headline CPI forecasts at 2.8% in 2026 and 1.4% in 2027 and expect the BoT to hold its policy rate at 1.00% through end-2027. The principal swing factors remain oil, THB, and the current account—not a domestic demand-led tightening cycle."
"A prolonged hold therefore offers the best balance between maintaining price stability and avoiding an unnecessary tightening of already-fragile financial conditions."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
ING economists Deepali Bhargava and Lynn Song flag renewed policy uncertainty for the Indonesian Rupiah (IDR) after the surprise resignation of Bank Indonesia’s (BI) governor, just as sentiment toward Indonesian assets was improving. Foreign participation in local bonds had started to recover on recent rate decisions and FX-stabilisation measures. They warn that questions over central bank independence and monetary policy direction point to further IDR weakness.
Governor exit clouds IDR outlook
"A surprise resignation from Bank Indonesia's governor introduces fresh policy uncertainty at a time when investor sentiment toward Indonesian assets was improving."
"While Acting Governor Damayanti should provide near-term continuity, markets will be closely watching the appointment of a permanent successor for signs of any shift in priorities."
"The resignation also comes at a less-than-ideal moment for the Indonesian rupiah."
"Foreign participation in Indonesia's local bond market had begun to recover following recent rate decisions alongside targeted measures to stabilise the rupiah."
"The resignation has inevitably raised questions about the independence of Bank Indonesia and the future direction of monetary policy. We continue to expect IDR to weaken amid policy uncertainty and weaker external balances."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Societe Generale strategist Kiyong Seong turns tactically constructive on USD/KRW, arguing that recent Won strength has been driven by late-stage flow factors rather than fundamentals. Seong favors building long USD/KRW positions with a 1,470 target over coming months, highlighting fading ADR and shipbuilder hedge flows and the potential return of Korean retail investors to US equities as key drivers.
Won strength seen as flow driven
"USD/KRW has been unusually volatile and has displayed atypical relationships with traditional market drivers in recent quarters, reflecting the dominant influence of flow dynamics rather than macro fundamentals."
"For now, the flow-related factors that have been pushing USD/KRW lower (i.e., SK Hynix ADR Flows, Shipbuilders’ FX hedge flows) remain dominant."
"However, we believe these forces may be entering a late-stage phase, increasing the risk of a reversal."
"In our view, these unusual dynamics are likely to persist for now."
"We turn tactically constructive on USD/KRW and favour building long positions, targeting 1,470 over the coming months."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Scotiabank’s team notes the Pound is fractionally weaker versus the Dollar, with fundamentals less supportive as yield spreads soften. However, sentiment is improving as markets fade earlier political concerns following PM Burnham’s arrival and stronger-than-expected construction PMI. Short-term technicals remain bullish, with expectations for medium-term gains above 1.3550 and a near-term trading band between 1.3420 and 1.3520.
Pound supported by improving sentiment
"The pound is showing fractional weakness into Thursday’s NA session with a 0.1% decline from Wednesday’s close. Data releases have been limited to third-tier construction PMI figures (44.7 vs. 40.0 exp. and 38.4 prev.), revealing an unexpectedly strong recovery in an index that remains firmly in contractionary territory."
"Fundamentals appear to be somewhat less supportive for the GBP, as we note the renewed softening in yield spreads."
"Sentiment continues to improve however, as market participants continue to fade politically-motivated concerns following the recent political transition and arrival of PM Burnham. The new PM’s commitment to fiscal responsibility appears to be much stronger than expected."
"Bullish—the RSI’s latest recovery has been somewhat more muted relative to the EUR, with current levels in the upper 50s offering a slightly less intense read on momentum."
"The local trend is bullish, given the sequence of rising lows from late June. We anticipate medium-term gains above the mid-July high around 1.3550 and look to a near-term range bound between 1.3420 and 1.3520."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The Bank of Mexico (Banxico) held rates unchanged at 6.50% for the third consecutive meeting on Thursday in a unanimous decision, as expected by most analysts, after ending its easing cycle in May.
In the monetary policy statement, the Governing Board said the balance of risks on inflation is tilted to the upside, and that "looking ahead, the Governing Board estimates that it will be appropriate to maintain the reference rate at its current level."
The Mexican institution expects inflation to converge to its 3% target, plus or minus 1%, in the last quarter of 2027. For 2026, Banxico’s projection for headline and core inflation is 3.5%. Regarding economic activity, the central bank stated that “economic slack is expected to continue throughout the forecast horizon and significant downward risks to economic activity persist.”
Key highlights:
BOARD UNANIMOUSLY VOTE TO HOLD INTEREST RATE AT 6.50%
BANXICO FORECASTS Q4 2026 HEADLINE INFLATION AT 3.5% VERSUS PREVIOUS FORECAST OF 3.5%
BANXICO FORECASTS Q4 2027 HEADLINE INFLATION AT 3.0% VERSUS PREVIOUS FORECAST OF 3.0%
BANXICO FORECASTS Q4 2026 CORE INFLATION AT 3.5% VERSUS PREVIOUS FORECAST OF 3.5%
BANXICO FORECASTS Q4 2027 CORE INFLATION AT 3.0% VERSUS PREVIOUS FORECAST OF 3.0%
BANXICO: HEADLINE INFLATION IS PROJECTED TO CONVERGE TO TARGET IN Q4 OF 2027
BANXICO: BALANCE OF RISKS FOR THE TRAJECTORY OF INFLATION WITHIN THE FORECAST HORIZON REMAINS BIASED TO THE UPSIDE
BANXICO: LOOKING AHEAD, THE BOARD ESTIMATES IT WILL BE APPROPRIATE TO MAINTAIN THE RATE AT ITS CURRENT LEVEL
BANXICO: INFLATION OUTLOOK, BOTH HEADLINE AND CORE INFLATION ARE STILL EXPECTED TO DECLINE THROUGHOUT THE FORECAST HORIZON, ALBEIT MORE GRADUALLY THAN
PREVIOUSLY ANTICIPATED
BANXICO: MEXICO ECONOMIC SLACK IS EXPECTED TO CONTINUE THROUGHOUT THE FORECAST HORIZON AND SIGNIFICANT DOWNWARD RISKS TO ECONOMIC ACTIVITY PERSIST
Banxico’s forecast for inflation
Banxico FAQs
The Bank of Mexico, also known as Banxico, is the country’s central bank. Its mission is to preserve the value of Mexico’s currency, the Mexican Peso (MXN), and to set the monetary policy. To this end, its main objective is to maintain low and stable inflation within target levels – at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%.
The main tool of the Banxico to guide monetary policy is by setting interest rates. When inflation is above target, the bank will attempt to tame it by raising rates, making it more expensive for households and businesses to borrow money and thus cooling the economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN. The rate differential with the USD, or how the Banxico is expected to set interest rates compared with the US Federal Reserve (Fed), is a key factor.
Banxico meets eight times a year, and its monetary policy is greatly influenced by decisions of the US Federal Reserve (Fed). Therefore, the central bank’s decision-making committee usually gathers a week after the Fed. In doing so, Banxico reacts and sometimes anticipates monetary policy measures set by the Federal Reserve. For example, after the Covid-19 pandemic, before the Fed raised rates, Banxico did it first in an attempt to diminish the chances of a substantial depreciation of the Mexican Peso (MXN) and to prevent capital outflows that could destabilize the country.
- USD/JPY clears 200-day SMA as Dollar rebounds after intervention.
- RSI exits oversold territory, but bearish momentum still dominates.
- Close below 158.06 exposes 157.18 and 155.23 support.
The USD/JPY advances by some 0.41%, clearing the 200-day Simple Moving Average (SMA) at 158.06, as the Greenback recovers some ground following two days of intervention in the FX markets by US and Japanese authorities. At the time of writing, the pair trades at 158.39, after hitting a low of the day (LOD) of 157.56.
USD/JPY Price Forecast: Technical outlook
The overall trend remains downwards, despite the ongoing recovery that pushed the USD/JPY spot prices above the 200-day SMA. The Relative Strength Index (RSI) remains bearish, even though the index exited oversold territory near 20.
With that said, the path of least resistance favours further Yen strength, but a daily close above the 200-day SMA opens the door to challenge higher prices. In that scenario, the next resistance is the 159.00 mark, ahead of a test of the 100-day SMA at the 160.00 psychological level. If cleared, the next area of interest becomes the 50-day SMA at 161.21.
On the other hand, if USD/JPY ends Thursday’s session below the 200-day SMA, it opens the door for another leg down. The next support would be the August 4 daily low of 157.18, before plunging to challenge the August 3 swing low of 155.23. Beneath this area is the 155.00 figure, followed by the February 23 cycle low of 153.99.
USD/JPY Price Chart – Daily
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
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