Forex News
During the Asian trade on Monday, the Israeli military stated a missile had been launched from Yemen towards Israeli territory, which has been intercepted by its aerial defense systems, The Guardian reported. Air raid sirens sound in Tel Aviv, following the attack from Yemen. The retaliatory attacks from Yemen, whose military force, the Houthis, are backed by Iran, reflect that conflicts in the Middle East have started again.
Earlier in the day, 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.
Later, the Israeli military also identifies a misslile attack from Iran, which has also been intercepted by its aerial defense systems.
Market reaction
No major action seen in the US Dollar (USD) following headlines from Israel; however, the US Dollar Index (DXY) trades firmly near 100.00 as of writing, the highest level seen in two months.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
- EUR/JPY may retest the symmetrical triangle's lower support boundary near 184.40.
- The 14-day Relative Strength Index at 45.66 remains below the midline, signaling that bullish momentum is fading.
- The initial barrier lies at the 50-day EMA of 185.05.
EUR/JPY gains ground after registering over 0.5% in the previous day, trading around 184.90 during the Asian hours on Monday. The EUR/JPY cross is holding beneath both the 50-day and nine-day Exponential Moving Averages (EMAs), which keeps the near-term bias tilted to the downside despite the broader uptrend.
The 14-day Relative Strength Index (RSI) at 45.66 stays below the midline, hinting at fading bullish momentum and reinforcing the idea that recent bounces are likely to struggle while price remains capped under this short-term EMA cluster.
The technical analysis of the daily chart suggests the EUR/JPY cross is positioned near the lower boundary of the symmetrical triangle pattern around 184.40. The triangle suggests a period of consolidation, though a break below it would reinforce the bearish bias and put downward pressure on the currency cross to navigate the region around the three-month low of 181.87, recorded on March 16, followed by the nearly six-month low of 180.81, reached on February 12.
On the upside, the primary barrier lies at the 50-day EMA of 185.05, followed by the nine-day EMA at 185.28 and the upper boundary of the symmetrical triangle around 186.30. Further advances would expose the all-time high of 187.95, recorded on April 17.
(The technical analysis of this story was written with the help of an AI tool.)
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.04% | 0.04% | 0.05% | 0.07% | -0.04% | -0.10% | 0.20% | |
| EUR | 0.04% | 0.06% | 0.07% | 0.10% | -0.02% | -0.06% | 0.22% | |
| GBP | -0.04% | -0.06% | 0.00% | 0.03% | -0.12% | -0.14% | 0.14% | |
| JPY | -0.05% | -0.07% | 0.00% | 0.00% | -0.12% | -0.14% | 0.12% | |
| CAD | -0.07% | -0.10% | -0.03% | -0.00% | -0.12% | -0.16% | 0.11% | |
| AUD | 0.04% | 0.02% | 0.12% | 0.12% | 0.12% | -0.03% | 0.25% | |
| NZD | 0.10% | 0.06% | 0.14% | 0.14% | 0.16% | 0.03% | 0.26% | |
| CHF | -0.20% | -0.22% | -0.14% | -0.12% | -0.11% | -0.25% | -0.26% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
- AUD/USD struggles to capitalize on its modest bounce from a nearly two-month low set on Monday.
- Geopolitical risks and Fed rate hike bets continue to underpin the USD, capping gains for spot prices.
- The technical setup seems tilted in favor of bears and backs the case for a further depreciating move.
The AUD/USD pair attracts some buyers after touching a nearly two-month low, around the 0.7025-0.7020 area during the Asian session on Monday, though it lacks follow-through. Spot prices currently trade near mid-0.7000s, nearly unchanged for the day, and remain vulnerable amid the underlying bullish sentiment surrounding the US Dollar (USD).
The Israel Defense Forces (IDF) said that it struck military targets in western and central Iran, hours after the latter fired a salvo of missiles at Israel’s Ramat David air base on Sunday night. The development threatens a fragile ceasefire and tempers hopes for a deal to end a three-month-old Iran war, pushing Crude Oil prices higher. This, in turn, revives inflationary concerns, which, along with Friday's upbeat US Nonfarm Payrolls (NFP) report, bolsters the case for an interest rate hike by the US Federal Reserve (Fed) in 2026 and favors the USD bulls. Furthermore, diminishing odds of a near-term rate hike by the Reserve Bank of Australia (RBA) cap the upside for the AUD/USD pair.
From a technical perspective, spot prices keep a bearish near-term bias following Friday's breakdown below the 100-day Simple Moving Average (SMA). Moreover, the currency pair is trading below the 50% Fibonacci retracement level of the March-May rally, validating the near-term negative outlook. Meanwhile, the Relative Strength Index (RSI) is near 38, and a negative Moving Average Convergence Divergence (MACD) histogram suggests persistent downside pressure rather than a decisive reversal. Hence, any subsequent move up would face a hurdle at the 100-day SMA around 0.7074, with additional barriers at the 38.2% and the 23.6% levels at 0.7108 and 0.7173, respectively.
On the downside, initial support is located at the 61.8% Fibo. retracement at 0.7003, ahead of a deeper cushion at the 78.6% level near 0.6928 and the prior swing low region around 0.6833.
(The technical analysis of this story was written with the help of an AI tool.)
AUD/USD daily chart
US Dollar Price Last 30 days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 30 days. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.72% | 1.69% | 2.18% | 2.06% | 2.34% | 2.48% | 2.21% | |
| EUR | -1.72% | -0.05% | 0.46% | 0.36% | 0.54% | 0.74% | 0.50% | |
| GBP | -1.69% | 0.05% | 0.53% | 0.39% | 0.67% | 0.83% | 0.55% | |
| JPY | -2.18% | -0.46% | -0.53% | -0.14% | -0.00% | 0.24% | 0.07% | |
| CAD | -2.06% | -0.36% | -0.39% | 0.14% | 0.09% | 0.38% | 0.16% | |
| AUD | -2.34% | -0.54% | -0.67% | 0.00% | -0.09% | 0.25% | -0.03% | |
| NZD | -2.48% | -0.74% | -0.83% | -0.24% | -0.38% | -0.25% | -0.34% | |
| CHF | -2.21% | -0.50% | -0.55% | -0.07% | -0.16% | 0.03% | 0.34% |
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).
- US Dollar Index trades flat around 100.10 in Monday’s Asian session.
- Israel said it struck Iran after taking missile fire.
- Traders ramp up bets on a Fed rate hike this year after a stronger US jobs report.
The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, currently trades near 100.10 during the Asian trading hours on Monday. The DXY holds steady near a monthly high amid escalating tensions in the Middle East and rising bets of a Federal Reserve (Fed) rate hike.
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.
US President Donald Trump said on Sunday he would tell Israeli Prime Minister Benjamin Netanyahu not to strike back after Iran fired a salvo of missiles at Israeli targets in retaliation for an attack on the outskirts of Beirut, per Axios. Rising tensions in the Middle East could boost the safe-haven flows, supporting the US Dollar against its rivals in the near term.
The US economy posted a third straight month of strong job gains in May. The US Nonfarm Payrolls (NFP) rose by 172K in May, versus the 179K increase (revised from 115K), according to the Bureau of Labor Statistics on Friday. This figure came in stronger than the market expectation of 85K. Additionally, the Unemployment Rate remained unchanged at 4.3% in May, in line with the market consensus.
Markets are now pricing in more than 70% probability that the Fed will raise rates in December, sharply up from a 45% probability a week ago, according to the CME FedWatch tool.
"The U.S. payrolls report released... paints a picture of a U.S. labour market that is strengthening despite the ongoing energy price shock," said Jonas Goltermann, chief markets economist at Capital Economics.
"That combination makes policy tightening by the Fed later this year increasingly probable... we now expect the FOMC to deliver two 25-basis-point rate hikes later this year, in response to the energy supply shock and the re-acceleration of the U.S. labour market,” Goltermann added.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
- 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.
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
