Forex News
- USD/INR rises as the US Dollar strengthens on hawkish sentiment surrounding the Fed's policy outlook.
- The Indian Rupee may receive support from robust FCNR-B inflows, bank fixing-related selling, and aggressive dollar liquidation by exporters.
- Markets turn cautious as US-Iran talks collapse after US VP Vance cancels Swiss summit trip.
The Indian Rupee (INR) declines on Friday after registering modest gains against the US Dollar (USD) in the previous day. The USD/INR pair gains ground as the US Dollar rises on traders pricing in the hawkish sentiment surrounding the Federal Reserve (Fed) policy outlook. Traders will likely observe FX Reserves data released by the Reserve Bank of India, which presents changes in the value of official reserve assets reflecting purchases and sales (including swaps) of foreign exchange by the Central Bank, earnings on foreign securities, and transactions with official institutions overseas.
The newly appointed Federal Reserve (Fed) Chairman Kevin Warsh emphasized that "price stability" remains the Fed's ultimate guiding principle. The Federal Open Market Committee (FOMC) voted unanimously on Wednesday to hold its benchmark overnight borrowing rate steady at a range of 3.5%–3.75%. However, the decision carried a hawkish tone, with nearly half of the officials signaling that at least one rate hike could be required later this year.
Vice President JD Vance's postponed travel
Market caution prevailed Friday as US-Iran talks collapsed following a CNN report that US Vice President JD Vance canceled his planned trip to the Bürgenstock summit. A spokesperson for the Vice President noted that the logistics of these negotiations "have never been simple or predictable," adding that no departure is imminent until a concrete update is established.
Reports also came that the highly anticipated US-Iran talks at Bürgenstock, Switzerland, have been derailed. The Swiss Foreign Ministry confirmed the scheduled Friday meetings will not take place, while Iranian state-aligned media cited ongoing Israeli attacks in southern Lebanon as the catalyst for postponing their delegation's travel.
Solid FCNR-B flows and dollar selling by exporters
However, the USD/INR pair may maintain a downward bias as a shift in daily foreign flows offered fresh support to the Indian Rupee. Market analysts attribute the USD/INR’s downside largely to fixing-related dollar selling across private and foreign banks, along with the robust Foreign Currency Non-Resident Bank (FCNR-B) inflows.
Additionally, aggressive dollar liquidation by exporters further weighed on the pair, offsetting a stronger US Dollar (USD) and prompting the Reserve Bank of India (RBI) to step in intermittently to absorb excess liquidity.
Oil prices ease due to US-Iran initial agreement
The Indian Rupee may gain ground amid a sharp decline in crude oil prices following a diplomatic breakthrough between the US and Iran. According to media reports, the two nations have signed an initial agreement, initiating a 60-day negotiation window for a permanent peace deal. Additionally, the US military confirmed it has lifted its blockade on Iranian ports near the Strait of Hormuz, restoring vital energy shipping routes. While these developments are expected to lift risk sentiment and support emerging market currencies in the near term, traders remain cautious, noting that a full recovery in global shipping and energy volumes will likely take months.
Technical Analysis: USD/INR remains below 94.50, moving averages
USD/INR appreciates after registering nearly 0.5% losses in the previous day, trading around 94.40 at the time of writing. The technical analysis of the daily chart suggests that the spot price remains close to the descending triangle's bottom, indicating that the market is testing whether buyers still have the cash and the will to defend current levels.
The USD/INR pair holds a bearish near-term bias as spot remains below both the nine-period and 50-period Exponential Moving Averages (EMAs). The 14-day Relative Strength Index (RSI) hovers just above 40, suggesting subdued downside momentum but not yet signaling oversold conditions, leaving the pair vulnerable while it trades under this near-term moving-average barrier.
The initial resistance is aligned with the 50-period EMA at 94.72, followed closely by the nine-period EMA at 94.76, forming a tight cap that would need to be reclaimed to ease immediate selling pressure. On the downside, the immediate support lies at the descending triangle bottom around 94.30.
(The technical analysis of this story was written with the help of an AI tool.)
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | INR | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.16% | 0.16% | -0.02% | 0.11% | 0.25% | 0.36% | -0.08% | |
| EUR | -0.16% | -0.00% | -0.15% | -0.05% | 0.10% | 0.19% | -0.16% | |
| GBP | -0.16% | 0.00% | -0.17% | -0.05% | 0.12% | 0.22% | -0.21% | |
| JPY | 0.02% | 0.15% | 0.17% | 0.10% | 0.28% | 0.36% | -0.01% | |
| CAD | -0.11% | 0.05% | 0.05% | -0.10% | 0.19% | 0.25% | -0.13% | |
| AUD | -0.25% | -0.10% | -0.12% | -0.28% | -0.19% | 0.08% | -0.30% | |
| NZD | -0.36% | -0.19% | -0.22% | -0.36% | -0.25% | -0.08% | -0.39% | |
| INR | 0.08% | 0.16% | 0.21% | 0.00% | 0.13% | 0.30% | 0.39% |
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).
Indian Rupee FAQs
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
- Silver stays subdued as inflation and interest rate fears are revived by mounting oil supply concerns.
- Traders adopt caution as US-Iran talks collapse after US VP Vance cancels Swiss summit trip.
- Non-yielding Silver faces headwinds as traders price in hawkish sentiment surrounding the Federal Reserve's policy outlook.
Silver price (XAG/USD) loses ground for the third successive day, trading around $64.70 per troy ounce during the European hours on Friday. Silver price remains under pressure as persistent concerns over inflation and high interest rates are revived by mounting oil supply anxieties.
Market sentiment turned cautious following a CNN report that US Vice President JD Vance canceled his scheduled trip to the Bürgenstock summit, a development that ultimately triggered the collapse of critical US-Iran negotiations.
A spokesperson for Vice President Vance downplayed the disruption, emphasizing that the logistics surrounding these complex negotiations "have never been simple or predictable." The official statement added that no alternative departure plans will be set in motion until a concrete update on the diplomatic situation is firmly established.
The Swiss Foreign Ministry confirmed that the meetings scheduled for Friday have been called off. Meanwhile, Iranian state-aligned media reported that the postponement of their delegation's travel was triggered by ongoing Israeli attacks in southern Lebanon.
Additionally, the non-yielding Silver faces challenges as the traders price in the hawkish sentiment surrounding the Federal Reserve (Fed) policy outlook. Higher borrowing costs increase the opportunity cost of holding non-interest-bearing assets like Silver, reducing their appeal.
The newly appointed Federal Reserve (Fed) Chairman Kevin Warsh emphasized during the post-meeting conference that "price stability" remains the Fed's ultimate guiding principle. Nearly half of the Federal Open Market Committee (FOMC) officials indicated that at least one more rate hike may be necessary later this year.
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/JPY remains steady around 1.61.30, with long-term highs at 1.61.95 in sight.
- The Yen is on the defensive amid rising bets of Fed rate hikes.
- Tokyo might intervene on Friday to take advantage of the thinned trading volumes amid the US Juneteenth festivity.
The Japanese Yen (JPY) remains offered against the US Dollar (USD) on Friday, and the USD/JPY pair stands comfortably around 161.30, its highest level since 2024, way beyond the level that triggered an alleged intervention on April 30.
Markets have remained oblivious to the Bank of Japan’s (BoJ) decision to hike rates to 31-year highs earlier this week. Speculative traders have kept selling the Japanese currency, lured by rising bets that the US Federal Reserve will be forced to hike interest rates in the second half of the year.
On Thursday, Japan’s Chief Cabinet Secretary, Minoru Kihara, reiterated that the authorities are ready to respond appropriately to currency moves “as needed at any time”. Tokyo tends to intervene in moments of thin liquidity, and, in this case, the Juneteenth bank holiday in the US provides a good opportunity.
Technical Analysis: The 40-year high, at 161.95, is at hand
USD/JPY trades at 161.26, holding a constructive bullish tone with no sign of a trend shift on the horizon. The Relative Strength Index (RSI) in 4-hour charts remains at 66.46, leaning toward overbought territory without yet flashing an exhaustion signal. The Moving Average Convergence Divergence (MACD) is modestly positive at 0.09, hinting that upside momentum is still in play.
On the topside, Thursday's high at 161.79 and the 40-year high at 161.95 are the main resistance levels. Further up, bulls might target the 127.2% Fibonacci extension of the June 11-18 rally, at 162.38.
To the downside, the session low, at the 161.00 area, is holding bears for now, closing the path to Thursday's low, at 160.45, and the 160.00 psychological level.
(The technical analysis of this story was written with the help of an AI tool.)
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.11% | 0.09% | -0.03% | 0.04% | 0.04% | 0.30% | 0.30% | |
| EUR | -0.11% | -0.03% | -0.15% | -0.07% | -0.06% | 0.17% | 0.19% | |
| GBP | -0.09% | 0.03% | -0.13% | -0.05% | -0.01% | 0.22% | 0.22% | |
| JPY | 0.03% | 0.15% | 0.13% | 0.06% | 0.10% | 0.31% | 0.32% | |
| CAD | -0.04% | 0.07% | 0.05% | -0.06% | 0.05% | 0.25% | 0.26% | |
| AUD | -0.04% | 0.06% | 0.01% | -0.10% | -0.05% | 0.22% | 0.25% | |
| NZD | -0.30% | -0.17% | -0.22% | -0.31% | -0.25% | -0.22% | -0.00% | |
| CHF | -0.30% | -0.19% | -0.22% | -0.32% | -0.26% | -0.25% | 0.00% |
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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
- GBP/JPY attracts sellers for the third consecutive day, though it lacks follow-through.
- The upbeat UK Retail Sales provide some respite to the GBP and support spot prices.
- The UK political turmoil and the divergent BoE-BoJ policy expectations cap the cross.
The GBP/JPY cross attracts sellers for the third straight day on Friday, though it finds some support ahead of a one-month low set the previous day following the release of the upbeat UK data. Nevertheless, spot prices remain on track to register heavy weekly losses and currently trade just below the 213.00 round figure.
The UK Office for National Statistics (ONS) reported that Retail Sales grew 1.2% in May, reversing the previous month's revised fall of 1.0% and surpassing estimates for a reading of 0.5%. Furthermore, the core Retail Sales also beat expectations and rose by 1.2% during the reported month, compared with an upwardly revised 0.1% fall in April. The data provides some respite to the British Pound (GBP) and assists the GBP/JPY cross to rebound nearly 50 pips from levels just below mid-212.00s.
That said, lingering domestic political risks, along with reduced bets for interest rate hikes by the Bank of England (BoE), might hold back the GBP bulls from placing aggressive bets. Greater Manchester Mayor Andy Burnham won a critical parliamentary by-election in northern England, clearing the path to attempt to oust British Prime Minister Keir Starmer. Burnham said the result could be a "turning point" for British politics and told his party that this was a final chance to change direction.
Meanwhile, traders have been scaling back BoE rate hike expectations following the release of softer inflation figures this week. Adding to this, the US-Iran peace deal eased concerns about the energy shock, endorsing the view that the BoE will hold rates steady in the coming months. In contrast, Minutes of the Bank of Japan's (BoJ) April meeting published earlier today showed that some board members called for raising rates more swiftly to avoid underlying inflation from overshooting.
Adding to this, expectations that higher input prices for businesses will eventually be passed on to consumers and lift inflation keep further BoJ policy normalisation firmly on the table. In fact, BoJ Deputy Governor Himino said that the central bank is likely to keep hiking rates based on economic, price, and financial trends. This, along with speculations that authorities will step in again to prop up the Japanese Yen (JPY), should contribute to capping any further recovery for the GBP/JPY cross.
Economic Indicator
Retail Sales (MoM)
The Retail Sales data, released by the Office for National Statistics on a monthly basis, measures the volume of sales of goods by retailers in Great Britain directly to end customers. Changes in Retail Sales are widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the MoM reading comparing sales volumes in the reference month with the previous month. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
Read more.Last release: Fri Jun 19, 2026 06:00
Frequency: Monthly
Actual: 1.2%
Consensus: 0.5%
Previous: -1.3%
Source: Office for National Statistics
- USD/CAD hit a 14-month high of 1.4159 on Friday, meeting the ascending channel top.
- The 14-day Relative Strength Index near 85 hints at stretched upside momentum, though the broader structure remains supported.
- The pair may find primary support at the nine-day EMA of 1.4038.
USD/CAD holds ground for the seventh consecutive day, trading around 1.4140 during the European hours on Friday. The technical analysis of the daily chart indicates the pair is moving upwards within the ascending channel pattern, signaling a persistent bullish bias.
The USD/CAD pair is retaining a bullish near-term bias as it holds well above both the nine-day and 50-day Exponential Moving Averages (EMAs). The steeply overbought reading in the 14-day Relative Strength Index near 85, however, hints that upside momentum could be stretched even as the broader structure remains supported.
The USD/CAD pair reached a 14-month high of 1.4159 on June 19, aligned with the upper boundary of the ascending channel. A sustained break above this confluence resistance zone would open the door for further gains.
The initial support lies at the nine-day EMA of 1.4038. A break below the short-term price average would weaken the price momentum and put downward pressure on the pair to test the lower boundary of the ascending channel around 1.3940. Further declines would explore the region around the 50-day EMA at 1.3850.
(The technical analysis of this story was written with the help of an AI tool.)
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.14% | 0.09% | -0.03% | 0.04% | 0.04% | 0.30% | 0.31% | |
| EUR | -0.14% | -0.05% | -0.18% | -0.10% | -0.09% | 0.14% | 0.17% | |
| GBP | -0.09% | 0.05% | -0.13% | -0.06% | -0.02% | 0.22% | 0.23% | |
| JPY | 0.03% | 0.18% | 0.13% | 0.07% | 0.11% | 0.32% | 0.34% | |
| CAD | -0.04% | 0.10% | 0.06% | -0.07% | 0.05% | 0.25% | 0.27% | |
| AUD | -0.04% | 0.09% | 0.02% | -0.11% | -0.05% | 0.22% | 0.25% | |
| NZD | -0.30% | -0.14% | -0.22% | -0.32% | -0.25% | -0.22% | 0.00% | |
| CHF | -0.31% | -0.17% | -0.23% | -0.34% | -0.27% | -0.25% | -0.01% |
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).
Deutsche Bank reports that the Dollar Index rose 0.65% to 100.98, while EUR/USD slipped to 1.144. The move comes as US Treasuries partially retraced prior Fed‑driven losses, with the 10‑year yield down 3.4 bps and jobless claims slightly above expectations. European yields were broadly steady, and the STOXX 600 ended a five‑day winning streak.
Dollar index gains pressure Euro
"So the 10yr yield fell by -3.4bps to 4.45%, whilst the 2yr yield fell by a marginal -0.6bps to 4.18% as curve flattening continued."
"The more stable front-end rates also came amid some steady data with weekly initial jobless claims coming in a touch higher than expected, at 226k in the week ending June 13 (vs. 225k expected)."
"Ultimately, 10yr bund yields (+0.1bps) were essentially unchanged at 2.93%, whilst yields on 10yr OATs (+1.2bps) and BTPs (+1.1bps) were slightly higher."
"The equity performance was also fairly mixed, with the STOXX 600 (-0.34%) ending a run of 5 consecutive gains, whilst the UK’s FTSE 100 (-1.04%) fell back."
"However, Italy’s FTSE MIB (+0.18%) hit an all-time high, France’s CAC 40 (+0.44%) hit its highest since the Iran conflict began, and Germany’s DAX (+0.37%) also rose."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- EUR/JPY attracts some sellers to around 184.45 in Friday’s early European session.
- The negative outlook of the cross remains intact, with bearish RSI momentum.
- The immediate resistance level to watch is 184.60; the initial support level is seen at 184.40.
The EUR/JPY cross loses traction to near 184.45 during the early European trading hours on Friday. The Japanese Yen (JPY) edges higher against the Euro (EUR) amid fears of currency intervention from Japanese authorities.
Japan’s Finance Minister Satsuki Katayama on Friday once again delivered verbal intervention, saying that the government is prepared to take decisive action against speculative activity in the foreign exchange market.
Furthermore, uncertainty surrounding the US-Iran peace deal could boost a safe-haven currency such as the JPY and act as a headwind for the cross. The White House on Friday indicated that the first round of technical talks with Iran under the memorandum of understanding signed this week will not take place on Friday, per CNN.
US Vice President JD Vance said that the meeting wasn’t yet finalized, as it’s difficult for the Iranian officials to get out of Iran. He added that he thought he would travel to Switzerland at some point this weekend.
Technical Analysis:
In the daily chart, EUR/JPY holds a modest bearish near-term bias as spot slips back under the 100-day Simple Moving Average (SMA). Price also trades beneath the 20-day Bollinger SMA, keeping the cross constrained within the upper half of the recent range, while the Relative Strength Index (RSI) at 43 signals soft but not extreme downside momentum.
A daily close above the 100-day SMA around 184.60 would pave the way to the mid-Bollinger band near 185.33 and the recent Bollinger upper band peak close to 186.25. On the downside, the lower Bollinger band at about 184.40 offers first support; a decisive break below this band would open the door to the May 7 low of 183.50, followed by the March 31 low of 182.83.
(The technical analysis of this story was written with the help of an AI tool.)
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.
- The British Pound cut some daily losses against the US Dollar but remained negative following UK economic data.
- UK Retail Sales rebounded sharply in May, jumping 1.2% MoM to beat forecasts and erase April's revised 1.0% drop.
- Traders adopt caution as US-Iran talks collapse after US VP Vance cancels Swiss summit trip.
GBP/USD remains subdued for the third successive day, trading around 1.3190 during the early European hours on Friday. The British Pound (GBP) pares its daily losses against the US Dollar (USD) but remains in negative territory following the release of key economic data from the United Kingdom (UK).
The Office for National Statistics (ONS) released data on Friday, indicating that UK Retail Sales climbed 1.2% month-over-month (MoM) in May after falling by a revised 1.0% in April. The market forecast was for a rise of 0.5% in the reported month. The core Retail Sales rose by 1.2% MoM in May, compared with the previous decrease of 0.1% (revised from -0.4%) and the estimated 0.4% increase figure.
The annual Retail Sales in the UK came in at 3.2% in May versus 0.1% prior (revised from 0%) and 1.9% expectations. The annual core Retail Sales jumped 4.6% in the same month, against April’s 1.1%. The reading came in above the consensus of 3.3%.
The GBP/USD pair holds losses as the Greenback strengthens amid prevailing hawkish sentiment surrounding the Federal Reserve (Fed) policy outlook. The newly appointed Fed Chairman Kevin Warsh emphasized that "price stability" remains the central bank's ultimate guiding principle. Nearly half of the Federal Open Market Committee (FOMC) officials indicated that at least one more rate hike may be necessary later this year.
Moreover, market caution revived on Friday as US-Iran talks collapsed following a CNN report that US Vice President JD Vance canceled his planned trip to the Bürgenstock summit. A spokesperson for the Vice President noted that the logistics of these negotiations "have never been simple or predictable," adding that no departure is imminent until a concrete update is established.
Economic Indicator
Retail Sales (MoM)
The Retail Sales data, released by the Office for National Statistics on a monthly basis, measures the volume of sales of goods by retailers in Great Britain directly to end customers. Changes in Retail Sales are widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the MoM reading comparing sales volumes in the reference month with the previous month. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
Read more.Last release: Fri Jun 19, 2026 06:00
Frequency: Monthly
Actual: 1.2%
Consensus: 0.5%
Previous: -1.3%
Source: Office for National Statistics
- EUR/GBP edges up from session lows near 0.8660 following ther release of UK data.
- UK Retail Sales increased well beyond expectations in May.
- Public Sector Net Borrowing has also risen against expectations, which might dent the Pound's recovery.
The Euro (EUR) is trimming some losses against the British Pound (GBP) on Friday, with the EUR/GBP pair trading at 0.8670 after bouncing from session lows near 0.8660. UK Retail Sales figures beat expectations in May, but the unexpected rise in government borrowing may have offset the positive impact on GBP.
Retail consumption increased by 1.2% in the UK in May, according to data released by the Office for National Statistics, more than twice the 0.5% expected and following a 1% decline in April. Excluding fuel purchases, sales of all other products also increased by 1.2% after a 0.1% contraction in the previous month.
At the same time, National Statistics also revealed that Public Sector Net Borrowing rose to GBP 23.29 billion in May, from GBP 23.03 billion in April, against expectations of a decline to GBP 18.5 billion. These figures might increase concerns about the UK’s fiscal deficit and dent the Pound’s recovery.
German producer prices slow down in May
In the Eurozone, German Producer Prices Index (PPI) data showed that factory-gate inflation accelerated to 2.2% year-on-year in May, up from 1.7% in April, but below the 2.5% rate expected. The Monthly PPI eased to 0.3% from 1.2% in the previous month.
On Thursday, the Bank of England (BoE) met market expectations and left interest rates on hold at 3.75, with two policymakers calling for a quarter-point rate hike. The central bank also lowered its inflation forecasts for the rest of the year, but warned that the impact of the energy shock on the UK economy remains uncertain.
Also on Thursday, the Labour Mayor of Manchester, Andrew Burnham, won the election in Makerfield, securing the parliamentary seat needed to challenge the Prime Minister, Keir Starmer. The compact on the Pound, however, has been marginal so far.
Economic Indicator
Retail Sales (MoM)
The Retail Sales data, released by the Office for National Statistics on a monthly basis, measures the volume of sales of goods by retailers in Great Britain directly to end customers. Changes in Retail Sales are widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the MoM reading comparing sales volumes in the reference month with the previous month. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
Read more.Last release: Fri Jun 19, 2026 06:00
Frequency: Monthly
Actual: 1.2%
Consensus: 0.5%
Previous: -1.3%
Source: Office for National Statistics
Economic Indicator
Retail Sales ex-Fuel (MoM)
The Retail Sales ex-fuel data, released by the Office for National Statistics on a monthly basis, measures the volume of sales of goods by retailers in Great Britain directly to end customers excluding automotive fuel. Changes in Retail Sales are widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the MoM reading comparing sales volumes in the reference month with the previous month. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
Read more.Last release: Fri Jun 19, 2026 06:00
Frequency: Monthly
Actual: 1.2%
Consensus: 0.4%
Previous: -0.4%
Source: Office for National Statistics
European Central Bank (ECB) policymaker and the head of Belgium's central bank, Pierre Wunsch, said on Friday that the central bank may cut the interest rates when the dynamics turn.
Key quotes
ECB may cut rates when the dynamics turn.
If data is not going in right direction, I would plead for second hike in July.
If we see higher services inflation, we may want to hike another 25 bps to be on safe side.
Calls for conditional guidance on rates.
If data is ambiguous, I don’t see a need to rush.
Market reaction
At the time of writing, the EUR/USD pair is down 0.21% on the day to trade at 1.1430.
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger 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.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
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