Forex News

Rabobank's Senior FX Strategist Jane Foley notes that EUR/USD recently fell below its prior 1‑month forecast of 1.15, prompting a reassessment of projections. RaboResearch has shifted its 1‑ to 12‑month forecast table moderately in favour of the Dollar but says its broader view is largely unchanged and expects EUR/USD to trade in choppy ranges around 1.14–1.15 in H2 and return to 1.16 over 12 months.

Rangebound profile with mild USD tilt

"Last month EUR/USD pushed below our previous 1 month forecast of 1.15, which forced us to re-evaluate our outlook."

"While we have adjusted our 1 month to 12 month forecast table this week moderately in favour of the USD, our overall outlook is not much changed from the end of last year."

"We maintain the view that EUR/USD will struggle to regain the directional uptrend that was in evidence for much of last year and that choppy ranges are more likely for the currency pair in the coming months."

"That said, in contrast to current market pricing, RaboResearch expects the Fed to hold rates steady through to the end of this year."

"We expect a choppy range centred around 1.14 to 1.15 in H2 this year and a return to 1.16 in 12 months as hawkish Fed views in the market abate."

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

• Gold price fails to extend its three-day winning streak as the US Dollar rebounds.
• The Fed is highly anticipated to deliver at least one interest rate hike this year.
• Fed Chair Warsh said at the ECB forum that inflation remains too high.

Gold price (XAU/USD) is down 0.8% to near $4,140 during the European trading session on Monday. The precious metal faces selling pressure as the three-day rally hits a pause after failing to extend above $4,202.

Bullions come under pressure as the US Dollar (USD) bounces back after a negative week. At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.22% higher to near 101.10.

Technically, a higher US Dollar makes the Gold price an unfavorable risk-reward bet for investors.

Last week, the US Dollar fell sharply after traders slightly trimmed the Federal Reserve’s (Fed) hawkish interest rate expectations, following the release of the United States (US) Nonfarm Payrolls (NFP) data for June. The US NFP report showed that the economy created 57K fresh jobs, significantly lower than estimates of 110K.

According to the CME FedWatch tool, the odds of the Fed delivering at least one interest rate hike by the end of September are 53.2%, down from 59.4% seen a week ago.

However, traders are still increasingly confident that there will be an interest rate hike by the Fed this year.

Higher interest rates by the Fed diminish the appeal of non-yielding assets, such as Gold.

Also, the latest remarks from Fed Chairman Kevin Warsh at the European Central Bank (ECB) Forum in Sintra show that officials are more concerned about inflation than the labor market. Warsh said at the Forum that inflation remains “too high”, and stressed to bring price stability.

Gold technical analysis

XAU/USD trades lower at around $4,143.46, maintaining a bearish near-term bias as it holds beneath both the 20-day Exponential Moving Average (EMA) at roughly $4,171 and the 50-day EMA near $4,344. The dual cluster of overhead EMAs suggests rallies are likely to be capped while price remains lodged below these trend gauges, with the Relative Strength Index (RSI) hovering just under the 50 line and hinting at subdued bullish momentum during any corrective bounces.

On the topside, initial resistance emerges at the 20-day EMA around $4,171, with a stronger barrier at the 50-day EMA near $4,344, where sellers could look to reassert control if the metal extends a recovery. On the downside, the Gold price could resume its downside journey if it fails to hold the June low of $3,941.76. A break below $3,941.76 would expose the Gold price to $3,900, followed by the September 25 low near $3,722.

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

Societe Generale notes that Sterling has been the strongest G10 currency since the Makerfield by-election, helped by a still-sizeable but reduced speculative short base. The bank highlights further room for gains, especially on EUR/GBP and GBP/JPY crosses, supported by M&A flows in GBP/USD and a recent upgrade of UK assets to overweight by a US bank, alongside Societe Generale’s own overweight stance on UK stocks.

Sterling outperforms with room to run

"In the UK, notwithstanding concerns over the Labour party tacking left under Andy Burnham, sterling is the best performer in G10 by a distance (1%) since the by-election in Makerfield on 18 June."

"The short speculative base of 35.5% of OI (as of late June) has been trimmed back but in theory leaves further room for the currency to catch up, perhaps more so on cross basis (EUR/GBP, GBP/JPY?) than outright vs the dollar."

"There was further M&A support for GBP/USD over the weekend after Castlelake submitted a cash bid of £5.2bn to purchase EasyJet."

"We took note on Friday of the bullish note and portfolio ratings upgrade for sterling assets from market-weight to overweight by a US bank. Our own Asset Allocation team is overweight UK stocks based on superior dividend returns."

"The Labour leadership contest kicks off on Thursday and nominations close on 16 July. Without a challenger, Andy Burnham would be formally appointed PM on 20 July."

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

• USD/CHF breaks above 0.8050 and aims for a previous support area around 0.8065.
• A cautious market mood and weak Swiss employment figures are weighing on the Swissie on Monday.
• The daily chart shows a potential morning star formation in progress, a bullish sign.

The Swiss Franc (CHF) pares recent gains against the US Dollar (USD) on Monday, as fresh frictions in the Middle East are dampening investors’ appetite for risk in an otherwise calm market session. The USD/CHF pair’s rebound from two-and-a-half-week lows near 0.8000 has extended beyond 0.8050, aiming for the 0.8070 area.

Comments from Iranian authorities reiterating their willingness to control the Strait of Hormuz and collect fees from vessels crossing the critical waterway cast a shadow over the fragile ceasefire, as the US rejects that option. Beyond that, fresh hostilities in Lebanon and reciprocal threats between Iran and Israel add pressure on the peace process.

In Switzerland, an unexpected increase in the Unemployment Rate, which hit a nearly five-year high at 3.1% in June, from 3% in May, added weight to the Swissie. Later in the day in the US, the ISM Services PMI is expected to show a moderate slowdown, yet remain at levels consistent with healthy activity. At a later time, Federal Reserve Governor Christopher Waller is expected to meet the press.

Technical Analysis: A Morning Start candlestick formation is in progress

USD/CHF trades at 0.8054, with recent price action suggesting that the pair is in an A-B-C corrective reversal, following a 5-wave (Elliot Wave) bullish cycle. In that sense, a daily close above the June 26 and 30 lows in the 0.8065 area would confirm a Morning Star candle formation, a bullish sign suggesting that the bearish correction might have concluded.

Momentum indicators in the daily chart are mixed. The Relative Strength Index (14) around 57 hints at constructive but not overextended momentum, while the Moving Average Convergence Divergence (MACD) turning slightly negative suggests upside may be slowing rather than reversing.

On the topside, a confirmation above the mentioned 0.8065 shifts the focus towards the area between 0.8120 and 0.8140 (June 24, 26, and July 1 highs), ahead of the August 2025 high, at 0.8170.

On the downside, the 0.8000 psychological area held bears last week. A bearish reaction below here would expose the key support area where mid-June lows meet the 200-day SMA, around 0.7915, and the 61.8% Fibonacci retracement of the May-June rally, at the 0.7900 area.

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

• The New Zealand Dollar weakens after global commodity prices declined in June.
• Diverging views fuel uncertainty ahead of the Reserve Bank of New Zealand's July policy decision.
• The US Dollar strengthens as markets continue to price in multiple Federal Reserve rate hikes this year.

NZD/USD trades around 0.5680 at the time of writing, down 0.50% on the day as the New Zealand Dollar (NZD) remains under pressure against a stronger US Dollar (USD). The Kiwi is weighed down by a 1% decline in the ANZ Commodity Price index in June, reflecting the impact of easing Middle East tensions and lower Oil prices on New Zealand's export commodities.

Investors are now focused on the upcoming Reserve Bank of New Zealand (RBNZ) policy decision. The New Zealand Institute of Economic Research (NZIER) shadow board remains almost evenly split on the outcome of the July meeting, highlighting significant short-term uncertainty that could increase volatility in the New Zealand Dollar. Despite these near-term differences, NZIER economists broadly agree that the Official Cash Rate (OCR) should rise to a range of 3% to 3.25% over the next twelve months.

ANZ shares a similar view and expects the RBNZ to raise the OCR by 25 basis points to 2.5% next week. The bank believes that persistent inflation risks and the weakness of the domestic currency justify further policy tightening despite the recent decline in Oil prices.

BNY also maintains a hawkish outlook, expecting the RBNZ to deliver a 25-basis-point rate hike to 2.5%, supported by stronger Gross Domestic Product (GDP) growth, a resilient labor market and inflation remaining near the upper end of the central bank's target range. According to BNY, markets will primarily focus on the RBNZ's forward guidance and whether it retains a hawkish bias, keeping expectations for the OCR on track to reach around 3% by early 2027.

Meanwhile, the US Dollar is gaining support as markets continue to price in multiple Federal Reserve (Fed) rate hikes by the end of the year. Investors are now awaiting Wednesday's release of the Fed's June Meeting Minutes, as well as the Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI), due later in the day, for fresh clues on the future path of US monetary policy. Comments from Iran's ambassador to China regarding potential new transit fees through the Strait of Hormuz are also contributing to a cautious market mood.

MUFG’s Lee Hardman notes that the Japanese Yen (JPY) has weakened again, pushing USD/JPY back above 162.00 and coinciding with further selling at the long end of the JGB curve. Hardman argues that the Bank of Japan (BoJ) is behind the curve, with inflation expected to accelerate and fiscal concerns mounting. MUFG now projects the policy rate at 1.50% by January 2027, with the next hike in September.

BoJ tightening expectations and fiscal risks

"The yen has re-weakened at the start of this week resulting in USD/JPY rising back above 162.00 after hitting a low of 160.49 on Friday. There had been speculation at the end of last week that Japan could intervene again to support the yen during the US holiday when trading conditions were less liquid, but no action has been taken contributing to the yen giving back some its recent gains."

"The ongoing steepening of the Japanese yield curve stands in contrast to flatter curves in the US, UK and Germany. The combination of the weaker yen and rising long-term JGB yields reflects some renewed fiscal concerns in Japan, and concerns that the BoJ remains behind the curve in tightening monetary policy."

"Inflation in Japan is expected to accelerate through the 2H of this year and into next year. It will keep pressure on the BoJ to normalize monetary policy further."

"We currently believe that the Japanese rate market is underpriced for further BoJ tightening. The BoJ’s recent communication has more clearly flagged upside risks to inflation including the faster pace of rising costs passing through to higher prices."

"We now expect the policy rate to reach 1.50% by January 2027 with the next hike in September. There are currently only around 6bps of hikes priced in by September leaving room for short-term yields to keep moving higher."

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

• The Indian Rupee weakens as the US Dollar bounces back.
• Lower oil prices will likely limit the Indian Rupee’s downside.
• FIIs turned out to be net buyers on Friday.

The Indian Rupee (INR) trades lower against the US Dollar (USD) at the start of the week. The USD/INR pair rises to near 95.42 as the US Dollar edges higher after a negative week, with investors awaiting the Federal Open Market Committee (FOMC) Minutes of the June monetary policy meeting, which will be released on Wednesday.

At the time of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.15% higher to near 101.03. Some buying interest has been reflected in the USD Index after sliding to near 100.55 last week.

Investors will pay close attention to the FOMC minutes as Federal Reserve (Fed) Chair Kevin Warsh didn’t deliver any forward-looking remarks on the monetary policy. In the policy meeting, the Fed left interest rates unchanged in the range of 3.50%-3.75%, as expected, and the dot plot showed that nine of 19 policymakers advocated an interest rate hike by the year-end.

Lower oil prices to support Indian Rupee

Oil prices remaining lower due to the normalization of traffic near the Strait of Hormuz, a critical chokepoint for almost 20% of the global energy supply, are expected to offer support to the Indian Rupee.

Lower oil prices bode well for currencies from economies, such as India, that rely heavily on oil imports to meet their energy needs.

In the opening session, the MCX Crude Oil contract expiring on July 20 trades 0.2% lower to near 6,550, close to its multi-month low of 6,426 posted on Thursday.

Analysts at Citi expect that oil prices could decline further as fundamentals are rapidly reasserting themselves, with Hormuz disruptions fading and shipping flows normalizing. The investment banking firm sees Brent Crude Oil sliding further to $60 by the year-end, which is currently near $71.50.

FIIs turned out to be net buyers on Friday

On Friday, Foreign Institutional Investors (FIIs) turned out to be net buyers in the Indian stock market after remaining sellers in the previous four trading days. The amount of investment by overseas investors in the Indian equity market was Rs. 1,355.33 crore. The sentiment of foreign investors toward Indian equities appears to be improving ahead of the start of the earnings season of the first quarter of Financial Year (FY) 2026-27.

India’s tech giant Tata Consultancy Services (TCS) will be the first company out of the Nifty50 basket to report its quarterly earnings, which are scheduled for Thursday.

Meanwhile, a Reuters report has shown that India's market regulator Securities and Executive Board of India (SEBI) aims to cut collateral requirements for borrowing stocks. The market regulator is also aiming to make it easier for investors to short stocks by nearly doubling the number of shares eligible for lending and borrowing.

Technical Analysis: USD/INR aims to resume advance and revisit all-time high near 97.10

USD/INR is higher at around 95.42, holding a bullish bias as it sits above the 20-period exponential moving average (EMA) at roughly 94.97 and the breakout of the Descending Triangle pattern.

The Relative Strength Index (RSI) hovers just above the neutral 50 mark near 54, hinting that upside momentum is positive but not overstretched as the pair consolidates after reclaiming these structural levels.

On the downside, immediate support is seen at the 20-period EMA around 94.97, reinforced by the reclaimed trend-line break zone near 94.83, where buyers would be expected to defend the short-term upbias. Below 94.83, the May 7 low at 94.03 will be the key support zone. On the topside, the next notable resistance comes in near the origin of the prevailing downward trend line around 97.11, and a daily close above that barrier would push the pair into uncharted territory.

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

ING’s Frantisek Taborsky notes weaker US data and a softer Dollar helped Central and Eastern European (CEE) currencies, but focus now shifts to local inflation and central banks. He expects slightly softer-than-forecast inflation in Hungary and the Czech Republic, a dovish National Bank of Poland (NBP), and warns that lower inflation and dovish tones could pressure CEE FX near term, while keeping a medium-term bullish view on Czech Koruna (CZK) and Hungarian Forint (HUF) and bearish on Polish Zloty (PLN).

Local inflation and dovish central banks

"Weaker US labour data and a softer dollar gave CEE currencies some breathing room last week, shifting this week’s focus back to local drivers. June inflation figures for Hungary and the Czech Republic are due tomorrow. After the downside surprise in Polish inflation last week and the sharp fall in fuel prices, markets are positioned for soft prints."

"In Hungary, we expect headline inflation to edge up from 1.8% to 1.9%, below the National Bank of Hungary’s 2.0% forecast. In the Czech Republic, inflation should fall further from 2.1% to 1.9%, below the Czech National Bank’s 2.1% projection. Both readings should send a dovish signal to markets."

"A similar message is likely from the National Bank of Poland, which is expected to leave rates unchanged at 3.75% on Wednesday and publish a new forecast. While the projection should show higher inflation than in March, when the impact of the US-Iran conflict was not included, the press conference is likely to sound dovish after two consecutive downside inflation surprises."

"A softer dollar supported a rally in CEE FX last week, and positive sentiment should carry into this week. However, lower inflation prints in Hungary and the Czech Republic, together with a dovish tone in Poland, could weigh on local FX."

"In the short term, CEE FX may face some pressure, but the medium-term bias remains unchanged: bullish CZK and HUF, bearish PLN."

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

Silver prices (XAG/USD) fell on Monday, according to FXStreet data. Silver trades at $62.02 per troy ounce, down 0.64% from the $62.42 it cost on Friday.

Silver prices have decreased by 12.75% since the beginning of the year.

The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 66.80 on Monday, down from 66.89 on Friday.

(An automation tool was used in creating this post.)

BNY’s Geoff Yu argues that European disinflation is allowing focus to shift from emergency inflation control toward growth and fiscal credibility. Yu notes that falling inflation in Poland and Hungary’s fiscal discipline have improved sentiment, but warns that fiscal consolidation must keep pace with easier financial conditions. The NATO Summit is seen refocusing markets on Europe’s defense funding trade-offs.

Disinflation shifts focus to budgets

"June's preliminary inflation prints across Europe show a clear sequential slowdown, driven by the extended ceasefire and lower commodity prices. We expect inflation expectations to continue falling."

"The constraint, however, is no longer energy or supply shocks, but the risk that financial conditions loosen faster than fiscal consolidation. Poland’s full-year fiscal deficit is still expected at 6.8% of GDP, while 37% of this year’s borrowing program remains outstanding."

"Fiscal credibility is now essential for governments seeking to reduce borrowing costs toward pre-war levels, if that’s still achievable. Higher Fed expectations and tighter ECB policy are already exporting tighter financial conditions across Europe, leaving far less monetary policy space."

"Preliminary June inflation releases continue this week, with soft prints expected across the region. Hungarian CPI is forecast at just 1.8% y/y, below target and below expected Czech inflation (2.1% y/y), despite the Czech Republic never experiencing a comparable fiscal impulse."

"The NATO Summit in Ankara is the key political event, with Trump expected to press European allies to shoulder a greater share of defense spending despite increasingly constrained public finances. Recent developments in Europe’s defense sector have weighed on performance, while structural challenges elsewhere in the economy persist."

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