Forex News

• The Japanese Yen edges up against its peers amid fears of Japan’s intervention.
• Japan’s Katayama said that the government will respond appropriately to currency moves at any time as needed.
• Investors await key US data and Fed Warsh’s speech.

The Japanese Yen (JPY) trades slightly higher against a majority of its currency peers, but edges lower to near 162.66 against the US Dollar (USD) during the European trading session on Wednesday. The Japanese currency ticks higher amid fears that the Japanese administration could intervene to support the domestic currency.

On Tuesday, Japan’s Finance Minister (FM) Satsuki Katayama said that her government “will respond appropriately to currency moves at any time as needed”. However, Katayama declined to comment on specific FX levels.

Meanwhile, the absence of dovish comments in the scheduled press conference by newly appointed Bank of Japan (BoJ) board member Ayano Sato on Tuesday has also supported the Japanese Yen. On Tuesday, Sato didn’t deliver any remarks regarding the interest rate outlook, but stated that “firms are more actively raising wages and prices so impact of weak the Japanese Yen on inflation may be bigger than in past”. Sato added, “Monetary policy should focus on inflation, while fiscal policy should focus on addressing impact on households, firms.”

In the European trade, the US Dollar trades higher due to rising United States (US) Treasury Yields. At press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.2% higher to near 101.36.

In Wednesday’s session, investors will focus on the US ADP Employment Change and the ISM Manufacturing PMI data for June, and Federal Reserve (Fed) Chair Kevin Warsh’s speech during the North American session.

Commerzbank’s Tatha Ghose interprets Czech National Bank (CNB) deputy governor Eva Zamrazilova’s remarks as signalling that June’s 25 bp hike was a one-off fine-tuning move rather than the start of a new tightening cycle. With the board feeling it has caught up and likely to pause, markets may still price a residual chance of another hike, providing marginal support for the Czech koruna.

Zamrazilova hints at cautious CNB pause

"CNB deputy governor Eva Zamrazilova’s latest remarks to the budget committee portrayed a picture that the 25bp rate hike of 18 June was conceived as ‘fine-tuning’, not a pivot into a new tightening cycle."

"This suggests that the board now feels it has “caught up” for the moment and can afford to wait for more information, rather than pre-committing to a sequence of hikes."

"Zamrazilova’s remarks strongly point towards a pause in August, with some debate potentially re-opening in September after new projections have been published."

"But, the CNB board appears to be making room for a more dovish assessment. Our own experience suggests that Zamrazilova’s messaging is unlikely to be isolated or uncoordinated. We would not be surprised if governor Ales Michl and many other board members expressed similar views, going forward."

"For markets, CNB’s still cautionary language means that the prospect of one more 25bp rate hike later in the year may linger on in the pricing (even if this never comes to fruition). And, this will be supportive for the koruna, at the margin."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• Dow Jones futures fall as stalling US-Iran peace talks fuel investor caution.
• US envoys Kushner and Witkoff met Qatari mediators, but Iran refused direct talks.
• The CME FedWatch tool shows fed funds futures are pricing in a nearly 67% chance of a September rate hike.

The Dow Jones futures decline 0.34% to trade near 52,500, while S&P 500 futures gain 0.35%, trading near 7,520. Meanwhile, Nasdaq 100 futures rise 0.48% to trade near 30,380 during European trading hours on Wednesday.

US stock futures are facing downward pressure as traders adopt a cautious stance, weighed down by stalling diplomatic efforts and mounting expectations of a hawkish Federal Reserve (Fed). Hopes for a swift resolution to the US-Iran Doha peace talks dimmed significantly after US negotiators Jared Kushner and Steve Witkoff arrived in Qatar to meet with mediators. Tehran’s subsequent announcement that it will not meet directly with the US envoys has cast a cloud over the negotiations, keeping geopolitical risk premiums alive and well across global markets.

Adding to the uneasy sentiment are rising odds of a more aggressive monetary policy outlook from the Federal Reserve. According to the CME FedWatch Tool, fed funds futures are now pricing in a nearly 67% chance of an interest rate hike by September.

Investors are keeping a close eye on the macro front on Wednesday, with Fed Chair Kevin Warsh scheduled to speak at the European Central Bank (ECB) Forum in Sintra, alongside the release of the ADP private employment report and the ISM Manufacturing PMI. These events will serve as a prelude to Thursday’s critical Nonfarm Payrolls (NFP) figures.

This pre-market caution follows a strong regular US session on Tuesday, where Wall Street posted solid gains fueled by a surge in technology stocks. The Dow Jones Industrial Average ticked up 0.26%, while the broader S&P 500 rose 0.79%, and the tech-heavy Nasdaq Composite jumped 1.52%. The rally was spearheaded by chipmakers and AI-related companies, with standout performances from SanDisk, which surged 10.9%, AMD advancing 7.7%, Marvell Technology climbing 7.3%, Intel gaining 6%, and Nvidia booking a 2.6% increase.

ING’s commodities team reports that industrial metals, led by Copper, gained as markets monitored US-Iran talks and shipping risks, while Aluminium stayed under pressure. They highlight unwinding geopolitical premia, sharply reduced speculative net longs in Aluminium, Copper and Zinc, and a stronger Dollar on expectations of higher-for-longer US rates as key headwinds for the broader metals complex.

Copper supported as aluminium lags

"Industrial metals moved higher on Tuesday as investors monitored renewed US-Iran talks and the outlook for US monetary policy. Copper climbed back above $13,300/t, supported by easing concerns over disruptions to shipping through the Strait of Hormuz."

"Aluminium remained under pressure, however, as the fading geopolitical risk premium continued to unwind. The metal is on track for its steepest monthly decline since 2008, reversing much of the earlier rally driven by fears of supply disruptions in the Middle East."

"Positioning turned less supportive. LME aluminium speculative net longs fell for a third straight week to 68,814 lots in the week ending 26 June. This is the lowest since May 2021, as short positions rose sharply amid easing concerns over the Strait of Hormuz."

"Copper net longs also declined for a fourth consecutive week to 48,735 lots, while zinc net longs fell for a third week to 28,222 lots, the lowest since October 2025."

"Metals markets are increasingly focused on the Federal Reserve. Expectations that US rates could remain higher for longer are supporting the dollar, creating a headwind for commodities."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• Gold remains under some selling pressure for the third straight day on Wednesday.
• The Iran uncertainty and Fed hike bets support the USD, weighing on the commodity.
• Traders now look to Fed Chair Warsh's speech and the US data for a fresh impetus.

Gold (XAU/USD) maintains its offered tone for the third straight day and trades below the $4,000 psychological mark through the first half of the European session on Wednesday.

Nevertheless, the precious metal remains well within striking distance of its lowest level since November 2025, set on Tuesday. Moreover, a bullish US Dollar (USD), bolstered by uncertainty over US-Iran talks and Federal Reserve (Fed) rate-hike bets, suggests that the path of least resistance for the bullion remains to the downside.

US negotiators Jared Kushner and Steve Witkoff arrived in Qatar on Tuesday for talks about the implementation of an initial deal to end the war in Iran. Tehran, however, has denied any planned meeting with US envoys, clouding the prospects for a lasting peace agreement between the two countries and keeping the geopolitical risk premium in play. Furthermore, tensions over the critical Strait of Hormuz revive fears of inflation, which, along with a still resilient US labor market, endorse hawkish Fed expectations and act as a tailwind for the safe-haven Greenback.

The US Job Openings and Labor Turnover Survey (JOLTS) showed on Tuesday that job openings edged up to 7.594 million, or a two-year high in May. Adding to this, the Conference Board’s US Consumer Confidence Index rose to 91.2 in June from 90.6 in May. Furthermore, Cleveland Fed President ​Beth Hammack said that it remains possible that she’ll advocate for higher interest rates if inflation pressures don’t moderate. According to the CME Group's FedWatch Tool, traders are assigning over an 80% chance of a Fed rate hike move by the end of this year.

The outlook favors the USD bulls, which, in turn, validates the near-term negative outlook for the Gold price. Traders, however, might refrain from placing aggressive bets and opt to move to the sidelines ahead of Fed Chair Kevin Warsh's appearance at the European Central Bank (ECB) Forum in Sintra. Apart from this, Wednesday's US economic docket – featuring the ADP report on private-sector employment and the ISM Manufacturing PMI – should provide some impetus to the Greenback and the XAU/USD pair later during the North American session.

The market focus will then shift to the release of the US monthly jobs data – popularly known as the Nonfarm Payrolls (NFP) report on Thursday. Nevertheless, the aforementioned fundamental backdrop suggests that the path of least resistance for Gold remains to the downside. Hence, any attempted recovery is more likely to be sold into and remain capped.

XAU/USD 4-hour chart

Gold remains vulnerable near YTD low amid bearish technical setup

From a technical perspective, the precious metal holds well below the 100-period Simple Moving Average (SMA) on the 4-hour chart and keeps a bearish near-term tone. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator hovers just below the signal line in negative territory, and the Relative Strength Index (RSI) slips toward the 40 line. Momentum indicators together hint that upside attempts are likely to remain limited for now.

On the topside, immediate resistance is defined by the 100-period SMA at $4,161.80, and a sustained break above this barrier would be needed to ease the current downside bias. On the downside, the $3,943-$3,942 area, or the year-to-date low, could act as an initial pivot. A clear drop under this area would expose further weakness in the broader consolidation.

(The technical analysis of this story was written with the help of an AI tool.)

BNY’s Geoff Yu argues that the US Dollar remains undervalued in real effective terms despite recent gains in USD/JPY, EUR/USD and USD/CAD. He notes that Eurozone growth and inflation have softened while U.S. price dynamics strengthen, supporting further appreciation in the Dollar’s REER. Yu highlights risks from demand-driven inflation and warns that a stronger real Dollar could tighten global financial conditions.

Dollar valuations and real effective gains

"The resilient JOLTS report reinforces our view that this week’s labor market data should continue to support higher U.S. yields and a stronger dollar. After the recent moves in USDJPY, EURUSD and USDCAD, valuation concerns are bound to resurface. We think those concerns are premature."

"By historical standards, the dollar is nowhere near the extremes seen during previous episodes of U.S. exceptionalism."

"As this divergence widens, the dollar’s REER has further room to appreciate."

"We continue to expect further gains in the dollar’s REER. The main risk is a sharp acceleration in demand-driven inflation – particularly wages – which would force a more aggressive Fed response and weigh on broader risk sentiment."

"On the other, a materially stronger USD REER tightens global financial conditions by forcing central banks to respond to imported inflation while raising the cost of already-scarce dollar funding."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• XAG/USD drifts below $58.00 and nears YTD lows in the area of 55.60.
• Precious metals struggle on Wednesday amid a sharp rise in US Treasury yields.
• US Job Openings beat expectations on Tuesday, adding to the case for Fed rate hikes.

Silver (XAG/USD) is trading lower on Wednesday, with the US Dollar buoyed by strong US macroeconomic data and higher US Treasury yields. The XAG/USD pair has retreated below $58.00 after failing to consolidate above the $60.00 area on Tuesday, and is drawing closer to the year-to-date (YTD) lows, near $55.60 hit in June.

Precious metals are struggling on Wednesday, following a jump in US Treasury yields. The yield of the benchmark US 10-year note has risen nine basis points to levels near 4.7%, with no clear reason other than month- and quarter-end portfolio adjustments. Treasury yields have an inverse correlation with the precious metals.

In the macroeconomic domain, recent data has continued feeding the narrative of US economic exceptionalism. Job Openings rose unexpectedly in May to their highest levels in two years, confirming the recovery of the US labour market. With investors ramping up bets on Federal Reserve (Fed) tightening, all eyes are on the US central bank’s chairman, Kevin Warsh, who is scheduled to speak at a central bankers’ meeting later on the day.

Technical Analysis: Looking for direction below $60.00

XAG/USD trades at $57.54, maintaining the broader bearish bias intact, although recent price action reveals a hesitant market. Momentum has improved, with the four-hour Relative Strength Index (14) lifting toward the 40 area and the Moving Average Convergence Divergence (MACD) turning modestly positive above zero, yet this merely hints at a corrective bounce rather than a trend shift.

Bears remain contained above Tuesday's low, in the $56.60 area so far, yet with the mentioned seven-month low at $55.71 at a short distance. A clear break of this level would bring the October and mid-November 2025 highs, at 54.86 and 54.39, into focus.

Upside attempts remain capped in the area between the 23.6% Fibonacci retracement at $59.45 and the $60.00 psychological area. Further up, the support area around $63.50, which held bears on June 19 and 21, is coincident with the 50% Fibonacci retracement and makes for the next potential target.

(The technical analysis of this story was written with the help of an AI tool.)

The British Pound (GBP) is showing resilience against a backdrop of local political shifts and brewing fiscal questions. Back by steady economic growth and an attractive carry profile that continues to draw foreign inflows into UK Gilts, Sterling appears to have shrugged off domestic political noise. 

While the Bank of England (BoE) maintains a cautious, restrictive posture despite ongoing disinflation, market participants are focusing on incoming political leadership and upcoming budget execution. Meanwhile, technical indicators suggest a modest near-term upward rebound, though broader dynamics point to a cap on extended gains.

Gilt inflows and steady BoE policy anchor the British Pound

Foreign exchange strategists at OCBC emphasize that the fundamental pillars supporting the British Pound remain intact. Despite a shifting political landscape – highlighted by prime ministerial candidate Andy Burnham’s pledges toward re-industrialisation and devolution – the currency is insulated by structural advantages. 

The combination of supportive yield differentials and a central bank that is slow to ease monetary policy means that investors are prioritizing structural factors over near-term political headlines.

The GBP has proven resilient to local political developments and associated fiscal risks. Carry support from foreign inflows into gilts should be in place for longer, as the BoE remains reluctant to ease policy amid resilient growth – even with ongoing disinflation.

Short-term momentum picks up but faces heavy overhead resistance

UOB highlights a subtle positive shift in short-term momentum for GBP/USD. While the pair has managed to reverse its previous downward bias over a multi-week horizon, technical structures indicate that the currency is approaching major overhead ceilings that will likely contain a rally.

We revised our view from negative to positive yesterday (...) We indicated that ‘there has been a build-up in momentum, but while GBP could rebound further, it is currently unclear whether any advance can reach 1.3355.’

Banks anticipate a range-bound trajectory for the Pound

The banks project a steady yet capped near-term trajectory for the British Pound, expecting the currency to consolidate its recent resilience. OCBC maintains a structurally neutral outlook, predicting a flat, range-bound path for crosses like EUR/GBP until concrete fiscal clarity emerges from the Autumn Budget. UOB expects the GBP/USD pair to experience a modest, technically driven rebound in the coming weeks, concluding that while minor tests of the 1.3275 level are likely, the broader advance will remain constrained below 1.3355 as long as critical support at 1.3180 holds.

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• USD Index gains some positive traction amid geopolitical uncertainty and Fed rate-hike bets.
• The recent breakout above the 100.50 barrier favors bulls and backs the case for further gains.
• Any corrective pullback is likely to find decent support and be bought into near the 100.58 pivot.

The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, attracts fresh buyers on Wednesday amid uncertainty over Middle East diplomacy and elevated expectations of US Federal Reserve (Fed) rate hikes. The Index sticks to modest intraday gains around the 101.35 region through the first half of the European session as traders await Fed Chair  Kevin Warsh's speech for fresh policy cues and some meaningful impetus.

Looking at the broader picture, the recent breakout through the 100.50 horizontal barrier on the daily chart was seen as a fresh trigger for the US Dollar (USD) bulls. Meanwhile, the Relative Strength Index at 67.38 stays in bullish territory, though it remains close to overbought conditions. However, the positive Moving Average Convergence Divergence (MACD) reading around 0.04 suggests that buyers retain control, even if upside progress could slow as momentum becomes stretched.

DXY daily chart

On the 4-hour chart, the DXY seems to have formed a short-term base around the 101.00 round figure and retains a short-term bullish bias above the 100-period Simple Moving Average (SMA) near 100.59. The latter should act as an immediate pivot for near-term direction. As long as the index defends these levels on a closing basis, dips are likely to be absorbed by buyers, with the path of least resistance pointing to further stabilization and potential grinding gains in the short term.

DXY 4-hour chart

A sustained break back below the pivot, however, would hint at the onset of a corrective pullback within the broader constructive setup as depicted by still-supportive momentum indicators. On the upside, immediate resistance is pegged around the 101.80 zone or the highest since May 2025, touched last week, ahead of the 102.00 mark. Some follow-through buying will reaffirm the bullish outlook and pave the way for an extension of the uptrend from the May swing low, near the 97.62 area.

(The technical analysis of this story was written with the help of an AI tool.)