Forex News
According to Danske Research Team, global equities rallied strongly as investors reacted to signs of a potential US‑Iran peace agreement that could reopen the Strait of Hormuz and curb nuclear ambitions. Cyclical stocks outperformed while energy lagged, with the S&P 500, Nasdaq and Russell 2000 all posting sizeable gains and Asian markets, notably South Korea’s KOSPI, following higher.
Cyclicals lead as energy underperforms
"Global risk sentiment was very constructive yesterday, with global equities rallying 1.3%. Cyclical stocks led the move higher, while defensives lagged at the bottom of the performance table, particularly energy suffered."
"That said, the trigger for the positive risk move happened after US President Trump announced that the US and Iran are close to reaching an agreement, potentially to be signed as soon as this coming weekend (where Trump turns 80 on Sunday)."
"The deal is expected to focus on reopening the Strait of Hormuz and securing assurances that Iran will not further develop its nuclear weapons programme. Unsurprisingly, the prospect of such an agreement weighed significantly on oil prices and is now 4.6% lower since yesterday morning to trade at USD 88.8bbl."
"The S&P 500 finished up 1.8%, the Nasdaq gained 2.5%, and the Russell 2000 rose more than 3%. US equity futures are higher again this morning, and the same picture is evident across Asia. South Korea's KOSPI stands out in particular, advancing more than 8%."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- EUR/GBP remains subdued following the release of data from the UK and Germany.
- UK GDP contracted by 0.1% month-on-month in April, meeting market forecasts after a 0.3% expansion in March.
- German May HICP inflation met forecasts, landing at 2.7% year-on-year.
EUR/GBP inches lower after two days of gains, trading around 0.8630 during the Asian hours on Friday. The currency cross remains subdued following the release of economic data from the United Kingdom (UK) and Germany.
The UK Gross Domestic Product (GDP) contracted by 0.1% MoM in April, following a 0.3% rise reported in March. The market forecast was for a 0.1% decline in the same period. Meanwhile, the Index of Services (April) rose 0.8% 3M/3M versus March’s 0.8%. Meanwhile, monthly Industrial Production came in at 0% MoM in April, while Manufacturing Production increased by 0.4% during the same period.
Money markets are currently pricing in at least a 25-basis-point interest rate hike by the Bank of England (BoE) this coming September, with a strong probability of a second increase before the end of the year. This potential tightening comes amid broader economic challenges, as political uncertainty surrounding the leadership of the Labour Party continues to weigh on investor sentiment and compound the current downturn.
Over in the Eurozone, inflation data met forecasts as Germany’s revised Harmonized Index of Consumer Prices (HICP) for May landed at 2.7% year-on-year. On a monthly basis, HICP growth experienced a slight contraction of 0.1%.
The European Central Bank (ECB) took aggressive action on Thursday by raising interest rates for the first time in nearly three years. The central bank also signaled a prolonged hawkish stance, indicating that restrictive monetary policy will likely remain firmly in place through 2027.
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.
Commerzbank’s Thu Lan Nguyen notes the European Central Bank sounded slightly hawkish, but investors already price in two further hikes, leaving the Euro softer after President Lagarde avoided clear guidance. Nguyen argues whether hikes come in July or later still matters, as an earlier move would signal urgency, yet markets may see rapid tightening as a policy mistake and price in future cuts, limiting Euro support.
ECB timing debate clouds Euro outlook
"Basically, things turned out just as my colleague Michael had predicted in the morning: in our view the ECB sounded slightly hawkish yesterday. But that was not enough to lure investors out of hiding who are already pricing in two further rate hikes by the end of the year anyway. Accordingly, the euro ultimately edged slightly lower, as President Lagarde avoided sending a clear signal in favour of further rate hikes."
"This was probably not the main reason for the upward move in EUR/USD over the course of yesterday’s trading – the decisive factor here was US President Trump’s statement that he had called off another military strike against Iran because a deal was virtually in the bag. However, it is likely to have contributed to positive euro sentiment. After all, the discussion shows that a rate hike in July is at least on the table."
"One might argue: whether the next two rate hikes expected by the market take place in July and September, or in September and December, hardly makes a big difference and is therefore irrelevant for the euro. But it is not quite that simple. A second rate hike as early as July would suggest a certain urgency behind the tightening and would therefore have a somewhat hawkish flavour."
"If the market shares this view, it is likely to price in a rapid correction in rates downwards at the long end, which would dilute – if not completely negate – the positive effect of the rate hike for the euro. So: the debate about the timing of the next rate hike is by no means irrelevant. The situation is more complex than it appears at first glance."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/CAD edges higher to around 1.3980 in Friday’s early Asian session.
- The annual US PPI inflation rate was the highest since November 2022.
- BoC left the interest rates unchanged at its June meeting on Wednesday.
The USD/CAD pair gains traction to near 1.3980 during the early European trading hours on Friday, bolstered by hot US inflation data. Traders will closely monitor the developments surrounding the US-Iran peace deal. The preliminary reading of the Michigan Consumer Sentiment Index for June is due later on Friday.
Data on Thursday showed US Producer Price Index (PPI) inflation rose more than expected in May, leading to the largest annual gain in three and a half years as the Middle East conflict drove up the cost of energy products.
The Fed is clearly missing its inflation target by a lot more than it is missing its employment objective," said John Ryding, chief economic advisor at Brean Capital. "The PPI report should further embolden those on the FOMC who think a rate hike might be needed later in the year,” Ryding added.
US President Donald Trump said on Thursday that the US and Iran could sign a peace deal as soon as this weekend that would reopen the Strait of Hormuz to shipping. Iran countered that it had not reached a final decision on an agreement. However, uncertainty remains high amid ongoing tensions in the Middle East.
US forces intercepted and shot down two Iranian one-way attack drones near the Strait of Hormuz on Thursday after Iran attempted to target commercial vessels transiting the waterway, per Fox News. The Islamic Revolutionary Guard Corps (IRGC) said that the country is stronger than ever and ready to deliver a "decisive, immediate, painful and regret-inducing response" to any aggression.
On the Loonie front, the Bank of Canada (BoC) on Wednesday decided to hold its key interest rate unchanged as expected and said it was seeing limited evidence that higher energy prices were fueling broad-based inflation.
Nonetheless, BoC Governor Tiff Macklem reiterated that the bank would not hesitate to raise rates if need be to keep inflation in check. "The Governing Council is continuing to look through the war's near-term impact on headline inflation but will not let higher energy prices become persistent inflation,” according to the BoC statement.
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.
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann observe that GBP/USD’s surge to 1.3434 has stretched short-term conditions, but further gains toward a retest of 1.3435 remain possible, with 1.3465 unlikely to break. Over 1–3 weeks, they expect range trading in a higher 1.3340–1.3465 band after shifting from a negative to neutral stance, with momentum not yet strong enough for a sustained advance.
Pound holds firm but capped near resistance
"24-HOUR VIEW: While we expected GBP to “edge lower” yesterday, we indicated that “any decline is likely part of a lower range of 1.3330/1.3395.” We added that GBP “is unlikely to break clearly below 1.3330.” GBP subsequently broke below 1.3330 (low of 1.3325), but it then lifted off and surged to a high of 1.3434. While the rapid rise has room to extend, overbought conditions suggest that any advance is likely limited to a retest of 1.3435. The next resistance at 1.3465 is unlikely to come under threat. Support is at 1.3385; a breach of 1.3365 would indicate that GBP is more likely to range-trade rather than retesting 1.3435."
"1-3 WEEKS VIEW: We revised our view from negative to neutral yesterday (11 Jun, spot at 1.3365). We indicated that the earlier “downward momentum has faded, and for the time being, GBP is likely to trade in a range between 1.3300 and 1.3435.” GBP then dipped to 1.3325 and then soared, testing the upper boundary of our range with a high of 1.3434. Upward momentum has increased, but not sufficiently to indicate a sustained advance. For the time being, we continue to expect range-trading, though the range has shifted higher to 1.3340/1.3465."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Germany’s final Harmonized Index of Consumer Prices (HICP) data for May has arrived at 2.7% Year-on-Year (YoY), as the preliminary data showed. The inflation data cooled down from 2.9% in April. On a monthly basis, it is confirmed that the German HICP growth declined by 0.1%.
There is a slight recovery move in the EUR/USD data, following the German final HICP data release; however, it appears that the move has come due to a slight correction in the US Dollar (USD). Still, the major currency pair is down 0.15% to near 1.1560.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.10% | 0.06% | 0.19% | 0.06% | 0.20% | 0.29% | 0.13% | |
| EUR | -0.10% | -0.05% | 0.09% | -0.04% | 0.11% | 0.19% | 0.02% | |
| GBP | -0.06% | 0.05% | 0.15% | 0.01% | 0.12% | 0.23% | 0.08% | |
| JPY | -0.19% | -0.09% | -0.15% | -0.15% | -0.01% | 0.08% | -0.08% | |
| CAD | -0.06% | 0.04% | -0.01% | 0.15% | 0.14% | 0.22% | 0.07% | |
| AUD | -0.20% | -0.11% | -0.12% | 0.01% | -0.14% | 0.07% | -0.08% | |
| NZD | -0.29% | -0.19% | -0.23% | -0.08% | -0.22% | -0.07% | -0.14% | |
| CHF | -0.13% | -0.02% | -0.08% | 0.08% | -0.07% | 0.08% | 0.14% |
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).
What do Germany’s final HICP data mean for EUR/USD?
The impact of Germany’s final HICP data remains little on EUR/USD, unless there is a dramatic deviation. The major trigger for the major currency pair remains preliminary readings.
Meanwhile, the European Central Bank’s (ECB) monetary policy announcement on Thursday, in which it raised the Deposit Facility rate by 25 basis points (bps) to 2.25%, signaled that policymakers remained highly concerned about upside inflation risks due to elevated energy prices in the wake of Middle East conflicts.
ECB President Christine Lagarde said in the press conference, post the monetary policy announcement, "Short-term inflation expectations have risen,” and the central bank will “monitor size, persistence of energy price increase".
Technical Analysis:
EUR/USD trades lower at around 1.1560, keeping a bearish bias as spot holds beneath the 20-period Exponential Moving Average (EMA) at 1.1603 and the broader downtrend resistance line near 1.1687. The pair is still riding an underlying ascending support structure from 1.1503, but the latest Relative Strength Index (14) reading around 42 suggests sellers retain the near-term initiative while any rebounds are likely to struggle against overhead supply.
On the topside, initial resistance is located at the 20-period EMA around 1.1603, with the descending trend-line resistance at 1.1687 acting as the next barrier if buyers manage a clearer bounce. On the downside, the first key support emerges at the rising trend-line break level near 1.1503; a daily close below this floor would expose it to the March 13 low at 1.1411.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
Harmonized Index of Consumer Prices (YoY)
The Harmonized Index of Consumer Prices (HICP), released by the German statistics office Destatis on a monthly basis, is an index of inflation based on a statistical methodology that has been harmonized across all European Union (EU) member states to facilitate comparisons. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is bullish for the Euro (EUR), while a low reading is bearish.
Read more.Last release: Fri Jun 12, 2026 06:00
Frequency: Monthly
Actual: 2.7%
Consensus: 2.7%
Previous: 2.7%
Source: Federal Statistics Office of Germany
The UK Gross Domestic Product (GDP) contracted by 0.1% MoM in April, following a 0.3% rise reported in March, the latest data published by the Office for National Statistics (ONS) showed on Friday.
The market forecast was for a 0.1% decline in the same period.
Meanwhile, the Index of Services (April) rose 0.8% 3M/3M versus March’s 0.8%.
Other data from the UK showed that monthly Industrial Production came in at 0% MoM in April, while Manufacturing Production increased by 0.4% during the same period.
Market reaction to the UK data
The Pound Sterling remains weak following the UK data. At the press time, the GBP/USD pair is gaining 0.13% on the day to trade at 1.3402.
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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