Forex News
BNY’s Geoff Yu notes that crowded exposure to Latin American (LatAm) bonds is unwinding as higher U.S. yields drive a domestic repricing of real-rate risks. The bank sees flows rotating toward regional equities and maintains a constructive tactical view on Latin American carry. Peru, Mexico and United States-Mexico-Canada Agreement (USMCA)-related developments are highlighted as key policy and political drivers for regional assets.
Bond outflows, equity and carry appeal
"Our longstanding concern about over-crowded exposure to Latin American bonds is beginning to materialize. End-June flows marked the first time in two months that the monthly smoothed flow score turned negative."
"Combined with stretched FX positioning, higher U.S. yields leave Latin America's yield-sensitive bond markets vulnerable to further adjustment."
"That does not imply broad capital outflows from the region. Instead, our data point to rotation rather than retrenchment, with equity flows approaching net purchase territory after a particularly weak May."
"Given the structurally lower FX hedge ratios associated with equity inflows, this rotation does not undermine our constructive tactical view on Latin American carry, where regional currencies remain our preferred expression."
"Forward look: Peru’s central bank is expected to leave rates unchanged this week, although inflation remains above target and a hawkish bias is likely until the Fed signals a clearer shift in direction."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Silver snaps a four-day winning streak as a firmer US Dollar caps gains.
- Weaker-than-expected US jobs data eases expectations of a near-term Fed rate hike, supporting Silver's near-term outlook.
- The technical backdrop remains bearish as the metal remains capped below major moving averages.
Silver (XAG/USD) pauses a four-day winning streak on Monday as buyers take a breather following last week's 5.55% rally. A firmer US Dollar (USD) is also capping the precious metal's upside. At the time of writing, XAG/USD is trading around $61.75, easing from its intraday high of $63.28, the highest level since June 23.
The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies is trading around 101.12, up 0.22% on the day.
Despite Monday's modest pullback, Silver's near-term outlook remains supported by easing expectations of a near-term Federal Reserve (Fed) interest rate hike following weaker-than-expected US Nonfarm Payrolls (NFP) data released on Thursday.
However, the technical picture tells a different story, as Silver remains capped below both its short- and long-term moving averages.
Technical analysis:
In the daily chart, XAG/USD remains in a bearish near-term bias as price holds below the 21-day Simple Moving Average (SMA) at $63.45 and the broader 200-day SMA at $70.06, underscoring a market that is still capped by medium- and long-term trend resistance.
The Relative Strength Index (RSI) has recovered from oversold levels but remains around 42, while the Moving Average Convergence Divergence (MACD) has turned slightly positive, suggesting the rebound may be temporary within the broader downtrend.
On the topside, initial resistance emerges at the 21-day SMA near $63.45, with a more meaningful barrier at the $70 horizontal level, reinforced by the 200-day SMA at $70.06 and the 50-day SMA at $71.05 clustering just above.
Further up, the 100-day SMA around $74.81 precedes additional caps at $80 and $90. On the downside, the next notable support is the horizontal floor near $55.00, where buyers could attempt to stabilize the decline if bearish pressure resumes.
In the weekly chart, XAG/USD holds a clear bullish structural bias as price remains well above the 100-week and 200-week Simple Moving Averages (SMAs) at roughly $48.34 and $36.24, respectively, underscoring a firmly supported medium-term uptrend.
Momentum, however, looks subdued: the RSI hovers near 43, while the Moving Average Convergence Divergence (MACD) remains negative, which together hint that upside traction is waning despite the broader bullish backdrop.
On the topside, initial resistance emerges at the 50-week SMA near $64.35, with a stronger barrier higher up at the 21-week SMA around $73.93, levels that would need to be reclaimed to revive a more aggressive bullish phase.
On the downside, immediate support is seen at the 100-week SMA at $48.34, ahead of the deeper structural floor at the 200-week SMA near $36.24, where the broader bullish trend would be expected to attract buyers on a more pronounced correction.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
- The Canadian Dollar remains under pressure against the US Dollar despite support from rising Oil prices.
- Markets continue to favor the Greenback as investors expect multiple Federal Reserve rate hikes this year.
- Scotiabank says the Canadian Dollar remains weighed down by trade uncertainty, even as its undervaluation has narrowed.
USD/CAD extends its advance for a second consecutive day and trades around 1.4230 at the time of writing on Monday, up 0.20% on the day. Despite higher Oil prices, which would normally support the commodity-linked Canadian Dollar (CAD), the Loonie remains under pressure against the US Dollar (USD) as investors continue to favor the Greenback.
Shipping traffic through the Strait of Hormuz is gradually returning to normal after disruptions over the weekend, while the Organization of the Petroleum Exporting Countries and its allies (OPEC+) approved a 188K-barrel-per-day production increase for next month, led by Saudi Arabia and Russia. The decision is viewed as a sign of confidence in regional stability, although it has also revived concerns about a potential global supply surplus.
The US Dollar continues to strengthen as markets expect further monetary tightening from the Federal Reserve (Fed). According to the CME FedWatch tool, investors are pricing in a 76.9% chance of additional interest rate hikes by the end of the year. Market participants are now awaiting the release of the Fed's June meeting minutes on Wednesday for further guidance on the outlook for monetary policy.
Meanwhile, the US ISM Services Purchasing Managers Index (PMI) eased slightly to 54 in June from 54.5 previously, matching market expectations. The survey showed weaker New Orders and softer Prices Paid, while the Employment Index improved, suggesting the US services sector continues to expand at a solid pace.
According to Scotiabank, the Canadian Dollar retains a soft bias despite narrower short-term yield spreads between Canada and the United States (USD). The bank notes that confirmation of the non-renewal of the United States-Mexico-Canada Agreement (USMCA) extends trade uncertainty for Canadian exporters. Analysts also expect the Bank of Canada's (BoC) Business Outlook Survey to reflect this cautious environment. While the Canadian Dollar remains fundamentally undervalued, Scotiabank believes that this undervaluation has narrowed steadily, limiting the currency's upside potential in the near term.
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.17% | -0.01% | 0.60% | 0.24% | 0.08% | 0.49% | 0.46% | |
| EUR | -0.17% | -0.18% | 0.43% | 0.07% | -0.07% | 0.33% | 0.27% | |
| GBP | 0.01% | 0.18% | 0.61% | 0.23% | 0.06% | 0.52% | 0.48% | |
| JPY | -0.60% | -0.43% | -0.61% | -0.38% | -0.52% | -0.14% | -0.10% | |
| CAD | -0.24% | -0.07% | -0.23% | 0.38% | -0.17% | 0.26% | 0.24% | |
| AUD | -0.08% | 0.07% | -0.06% | 0.52% | 0.17% | 0.43% | 0.40% | |
| NZD | -0.49% | -0.33% | -0.52% | 0.14% | -0.26% | -0.43% | -0.04% | |
| CHF | -0.46% | -0.27% | -0.48% | 0.10% | -0.24% | -0.40% | 0.04% |
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 Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
Scotiabank strategists Shaun Osborne and Eric Theoret note EUR/USD around 1.1418 trading softer against the US Dollar, though mid-pack within G10. Euro area Producer Price Index (PPI) and retail sales were in line with expectations, while German factory orders surprised higher. Short-term rates have stabilized and the curve normalized, with markets expecting no European Central Bank (ECB) move on July 23 and a 50% chance of a September hike.
Euro soft as curve normalizes
"The EUR is soft, down 0.2% vs. the USD and a mid-performer among the G10 in an environment of broad-based USD strength."
"The short-term rates market has shown signs of stabilization over the past week or so, and the rise in implied yields on medium-term contracts has allowed the curve to normalize following an inversion that has been observed through most of the period since mid-March."
"The next ECB decision is scheduled for July 23 and markets are expecting no policy change while pricing in a 50% chance of a 25bpt hike for September 10."
"Bearish/neutral – the recovery in the RSI is notable, climbing from a late June sub-30 (deeply oversold) low to the low 40s with a gentle drift back toward the neutral threshold at 50. The medium-term trend remains largely neutral, with a flat range from mid-2025 roughly bound between 1.1300 and 1.2100. We see near-term support at 1.1380 and resistance above 1.1480."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The Australian Dollar (AUD) is confronting a notable shift in market momentum as fresh domestic data points to cooling inflation. While the currency recently experienced a sharp surge, a consecutive monthly decline in a key consumer price gauge suggests that a broader disinflationary trend is becoming firmly established. This macro shift has thrown a wrench into hawkish market expectations for additional interest rate hikes by the Reserve Bank of Australia (RBA), prompting major financial institutions to project a period of consolidation and downside vulnerability for the AUD/USD currency cross.
Established disinflation chips away at hawkish RBA bets
Macro strategists at BNY highlight that price pressures in Australia are easing, led by a drop in global fuel costs. The Melbourne Institute inflation gauge fell for a second consecutive month in June, with both headline and underlying trimmed mean figures pulling back significantly. This suggests that the central bank may abandon its hawkish-leaning policy stance.
The snapshot points to broader easing in both headline and underlying price pressure, suggesting disinflation is becoming more established. That could force the RBA to shift away from its neutral stance, with market pricing of 35bp of tightening by year-end now looking increasingly vulnerable if softer inflation momentum persists.
Technical fatigue sets in for the Australian Dollar after recent gains
The strategy team at UOB observes that the Australian Dollar's previous bullish momentum has effectively run out of steam. Following a sharp multi-day rally, the AUD/USD pair has entered a minor holding pattern, with technical indicators flagging an early accumulation of downward bias that will likely cap near-term recovery efforts.
Despite the relatively quiet price action, there has been a tentative build-up in downward momentum. Today, the bias for AUD is tilted to the downside, but given the lacklustre momentum, any decline is likely limited to a test of 0.6910.
Banks anticipate downward-biased near-term trajectory for the Australian Dollar
The banks anticipate a cooling near-term trajectory for the Australian Dollar, indicating that its recent upward run has likely run its course. BNY indicates that if the softer domestic inflation momentum continues to chip away at the 35 basis points of priced-in RBA tightening, the currency's yield advantage will quickly erode.
Mirroring this cautious macro view, UOB projects an initial multi-week consolidation phase where the AUD/USD pair remains bound between 0.6870 and 0.6980, but remains structurally bearish over a longer one-to-three-month horizon, warning that a technical breakdown could eventually drag the asset down to major downside targets at 0.6835 and 0.6707.
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
TD Securities projects US output growth to move sideways in 2026, slightly below trend, with Real Gross Domestic Product (GDP) at 2.0% Q4/Q4 and unemployment around 4.3%. The Iran conflict and an oil shock pose stagflationary risks, while AI and high-income consumers support demand. Core Consumer Price Index (CPI) is seen peaking near 3.0% year-on-year in Q4 2026, with disinflation resuming in 2027.
Sideways growth with stagflation risks
"We expect output growth to move sideways this year, reflecting the lingering impact of the oil shock. The Iran conflict presents stagflationary risks, which we expect will keep the Fed on hold for the entire year. AI and high-income consumers have supported underlying growth."
"GDP growth will likely remain slightly below trend in 2026, ending with 2.0% Q4/Q4. Stable growth should result in a still-low unemployment rate of 4.3% by Q4 2026. The labor market has signaled stabilization, and while we expect that to continue, rising input costs from the oil shock create further uncertainty that could weigh on hiring. We assign 25% odds to a US recession over the next year."
"With supply chains stressed, we do not see substantial disinflation as feasible this year. We expect core CPI inflation to peak at 3.0% y/y in Q4 2026, ending the year higher than it started. The numbers are similarly high in core PCE terms. Most of the impact of higher oil prices will filter into headline inflation. We look for gradual disinflation to resume in 2027."
"The outlook will be fluid amid uncertainty around developments in Iran and the Trump administration's execution of new trade, fiscal, regulatory, and immigration policies. New developments in financial markets and further escalation of geopolitical conflicts remain key risks for our economic projections over the forecast horizon."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Commerzbank’s Dr. Marco Wagner notes that German manufacturing orders rose 1.9% in May, or 1.0% excluding large orders, pointing to an upward trend. He argues this supports a moderate recovery in German industry and a slight recovery in the broader German economy after a likely small Q2 decline. For 2026, Commerzbank maintains a 0.6% growth forecast.
Orders signal modest industrial upturn
"Business is gradually picking up again in terms of new orders. These rose by a surprisingly strong 1.9% in May; even excluding large orders, which are prone to fluctuations, the increase was 1%. Based on this upward trend in orders, we expect a recovery in German industry, even if it is likely to be moderate."
"Seasonally and calendar-adjusted order intake in the manufacturing sector rose by 1.9% in May compared with April. Economists surveyed in advance had expected an increase of just over 1%. Excluding large orders, which typically fluctuate widely, the increase was 1.0%."
"Overall, today’s figures offer hope for a moderate recovery in German industry, which—after a long period of stagnation—had recently been further battered by the war in Iran."
"These are certainly all positive developments for German industry. However, we do not expect a strong recovery."
"All in all, we expect a slight recovery for the German economy after it likely recorded a small decline in the second quarter. For 2026 as a whole, we continue to expect growth of 0.6%."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- ISM Services PMI recedes to 54 in June, matching consensus.
- The US Dollar trades with decent gains on Monday.
Economic activity in the US service sector lost some momentum in June, with the ISM Services PMI easing to 54.0 from 54.5 in the previous month, matching analysts' expectations.
Further poll results found that the Prices Paid Index, a crucial barometer of inflation, cooled to 67.7 from 71.3, while the Employment Index rose to 51.2 from 47.9, indicating a modest improvement in labour market conditions in the service sector. Finally, the New Orders Index weakened to 55.1 from 57.3.
Market reaction
The Greenback starts the week in a positive mood, sending the US Dollar Index (DXY) back above the 101.00 hurdle.
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
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