Forex News
- The Oil price attracts bids after a two-day correction amid continued energy supply disruption.
- Iran says that it is not involved in any discussions with the US regarding the Hormuz reopening.
- OPEC has downwardly revised its global oil demand forecast for 2026 to 580,000.
West Texas Intermediate (WTI), futures on NYMEX, trades 0.4% higher around $81.40 during the early European trading session on Friday. The oil price regains ground after a two-day corrective move as financial markets remain worried regarding the closure of key energy supply passages in the Middle East.
Analysts at TD Securities have highlighted that fundamental tightness across crude and product markets should ultimately support further upside,” suggesting that the latest bout of selling is viewed as a temporary setback within an otherwise constructive medium-term outlook for Oil prices.
Commodity vessel transits at the Hormuz picked up slightly on Thursday, but remained lower than the month's daily average of 12, based on Kpler data in August so far, Reuters reports. This remains a massive decline from pre-war levels of 130 to 140 ships daily.
Navigation through the Strait of Hormuz and the Bab al-Mandab Strait, which collectively account for 27% of global energy supply, is nominal, with the straits being closed due to blockades by the United States (US) and the Iran-aligned Houthis, respectively.
Meanwhile, Iran has also stated that Tehran is in no discussions with the US regarding the reopening of the Hormuz, but is in the final stages with Oman about collective management of navigation through the strait.
On the demand front, OPEC has revised its global oil demand forecast for 2026 to 580,000 barrels per day (bpd) from the prior estimate of 780,000 bpd.
Oil Technical Analysis
In the daily chart, WTI US Oil trades at $80.76. The contract holds a constructive near-term bias as it remains above the 20-day exponential moving average (EMA) at $80.04, suggesting underlying demand after the recent recovery from the mid-$70s. The Relative Strength Index (14) around 51 stays near neutral territory, hinting that bullish momentum is present but not overstretched.
On the downside, initial support is seen at the 20-day EMA at $80.04, where buyers have recently re-emerged, while a daily close below this area would weaken the current positive tone and expose lower levels toward the mid-$70s consolidation zone. On the topside, the absence of nearby technical resistance on the provided metrics implies that further gains could unfold as long as price holds above $80.04, with traders likely watching psychological barriers and prior swing highs to gauge the next upside objectives.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
- AUD/JPY softens to near 112.55 in Friday’s early European session.
- The cross keeps a bearish vibe, but further consolidation cannot be ruled out in near term amid neutral RSI momentum.
- The first upside barrier emerges at 112.70; the initial support level to watch is 111.63.
The AUD/JPY cross trades in negative territory around 112.55 during the early European trading hours on Friday. The Japanese Yen (JPY) strengthens against the Australian Dollar (AUD) as traders remain on high alert for further currency intervention from Japanese authorities.
Japan's former top currency diplomat, Mitsuhiro Furusawa, said on Thursday that Tokyo may conduct joint JPY intervention with the United States "at any time" and should signal the chance of faster-than-expected interest rate hikes to arrest the currency's slide.
Markets currently see a 76% chance of the Bank of Japan (BoJ) rate hike in September, according to Tokyo Tanshi data, compared with 24% on July 30.
Yen undervaluation seen easing after Japan–US intervention
DBS Group Research notes that the Japanese Yen’s mispricing has started to correct in the wake of recent official action. According to the bank, “the Japanese yen's (JPY) undervaluation has narrowed from record levels following Japan's second FX market intervention this year, which was conducted in co-ordination with the US,” underscoring the impact of rare, joint efforts by Japan and the US to rein in excessive JPY weakness.
Technical Analysis: AUD/JPY remains capped under the 100-day SMA
In the daily chart, AUD/JPY holds below the Bollinger middle band and the 100-day moving average, keeping the near-term bias bearish as price is capped beneath these overlapping resistance lines. The Relative Strength Index (14) at 50.43 is neutral, suggesting a consolidative tone rather than strong directional momentum while downside risks remain dominant as long as the cross stays under the 100-day average.
On the topside, immediate resistance is clustered around the Bollinger middle band at 112.70, followed by the 100-day moving average at 112.90. A daily close above these levels would be needed to ease selling pressure and open the way toward the July 27 high of 114.67, en route to the Bollinger upper band near 115.40.
On the downside, initial support emerges at the August 10 low of 111.63. The key contention level is seen at the Bollinger lower band at 110.00, where a break would signal a deeper corrective phase toward the lower end of the recent range.(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- Market attention turns to upcoming US July Retail Sales data following soft inflation reports.
- July PPI unexpectedly stalled, with core PPI rising 0.2%, slightly below market expectations.
- CME FedWatch shows September Fed rate hike probability dropping from 40% to 34.8%.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is losing ground for the second successive day, trading around 99.90 during the Asian hours on Friday. Market attention is now turning toward the upcoming United States (US) July Retail Sales data scheduled for release later in the day. Meanwhile, the Greenback faces downward pressure following a softer-than-expected US inflation report that has weighed on investor sentiment.
Adding to the broader cooling inflation picture, the Bureau of Labor Statistics reported that US wholesale costs for goods and services were flat in July. This came in below the anticipated 0.2% growth and followed a revised 0.1% decline in June. Excluding volatile food and energy components, the core Producer Price Index (PPI) rose 0.2%, slightly under market consensus expectations of 0.3%. On an annual basis, headline PPI climbed 4.7% year-over-year in July, while core PPI increased by 4.2% over the same period.
These cooling inflation metrics have notably shifted expectations regarding Federal Reserve monetary policy. According to the CME FedWatch Tool, markets are now pricing in a 34.8% probability of a US rate hike at the upcoming September meeting, down from 40% immediately following the PPI data release.
Dollar downside opens up as Fed rate hike bets fade but oil risks linger
Rabobank’s Jane Foley observes that “Fed rate hike speculation has recently suffered a setback on the back of recent US data releases,” a shift that, in her view, “opens the prospect of further slippage for the greenback.” However, Foley cautions that this emerging downside for the Dollar is not assured, stressing that the outlook “could still be thrown off course if oil prices spike higher again,” with renewed energy market tensions potentially restoring support for the US currency.
Technical Analysis:
In the daily chart, Dollar Index spot trades at 99.90, maintaining a bearish near-term tone as it sits below the 50-day Exponential Moving Average (EMA) while only just holding above the shorter nine-day EMA. The 14-day Relative Strength Index (RSI) at 41.5 stays in a mildly negative area, suggesting waning bullish momentum, while the FXS Fed Sentiment Index around 134.6 hints that broader Fed-related expectations are not yet translating into sustained dollar strength on the chart.
On the topside, immediate resistance is provided by the 50-day EMA at 100.27, with a stronger barrier at the horizontal level of 101.80, where sellers could reassert control if tested. On the downside, first support is seen at the nine-day EMA at 99.96, followed by a structural floor near 97.62, ahead of additional support zones at 96.49 and 95.56, where deeper setbacks would likely pause if bearish pressure extends.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
- GBP/USD gains traction to around 1.3495 in Friday’s early European session.
- US PPI inflation was flat in July, below expectations.
- BoE's Pill said UK growth supports case for higher interest rates.
The GBP/USD pair gathers strength to near 1.3495 during the early European trading hours on Friday. The British Pound (GBP) edges higher against the US Dollar (USD) as cooler-than-expected US consumer and producer price data have limited the Federal Reserve's (Fed) room for further interest rate hikes. Traders will keep an eye on the US July Retail Sales report later on Friday.
Wholesale costs for goods and services in the United States (US) were flat in July, below the market consensus of 0.2% and after falling 0.1% in June, the Bureau of Labor Statistics reported on Thursday.
Additionally, the core Producer Price Index (PPI), which excludes food and energy, increased 0.2% MoM in July, compared to a rise of 0.4% in June, softer than the forecast for a 0.3% gain. On an annual basis, the headline PPI climbed 4.7% YoY in July, while the core PPI rose 4.2% YoY during the same period.
Traders further reduced the odds of a September rate hike from the Fed following signs of softening US inflation pressures. Markets are now pricing a 34.8% probability of a US rate hike at the September meeting, down from 40% immediately after the PPI data, according to the CME FedWatch Tool.
However, geopolitical tensions in the Middle East could boost a safe-haven currency such as the Greenback and act as a headwind for the major pair. A senior Islamic Revolutionary Guards Corps (IRGC) official, Hossein Taeb, said on Thursday that the Strait of Hormuz is "under Iran's control and management" after US President Trump said Washington has "total control" over the waterway, per Fox News.
The UK economy grew by 0.4% QoQ in the second quarter (Q2) of 2026, versus a 0.6% growth in Q1, the Office for National Statistics reported on Thursday. This figure came in line with market expectations. Bank of England (BoE) Chief Economist Huw Pill stated that stronger-than-expected UK economic growth readings reinforced the case for higher borrowing costs to bring inflation back to target.
UK growth outlook clouded by geopolitical risks but activity remains resilient
Societe Generale cautions that “the key risk remains the trajectory of the US-Iran conflict,” highlighting the potential for geopolitical tensions to weigh on the UK outlook. Even so, the bank notes that “so far, UK activity data has proved resilient to the crisis,” with recent indicators suggesting that domestic momentum has, for now, withstood the external shock.
Technical Analysis: GBP/USD maintains a constructive outlook in the near term
In the daily chart, GBP/USD holds above the Bollinger Bands simple moving average (SMA) middle line and the 100-day moving average, which together reinforce a constructive, near-term bullish bias while price approaches the upper Bollinger band resistance. The Relative Strength Index (14) around 59 leans toward positive momentum without yet signaling overbought conditions, suggesting dips may attract buyers while the broader uptrend remains in place.
On the downside, immediate support is seen near the 1.3425 Bollinger SMA middle band, followed by the 100-day moving average at 1.3415, with the lower Bollinger band down at 1.3280 acting as a deeper structural floor if correction extends. On the topside, the upper Bollinger band at 1.3570 is the next notable resistance, where a sustained break would open the door to further gains, while failure to clear this barrier would likely keep GBP/USD consolidating above the current cluster of moving-average support.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling 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, its currency will benefit 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.
- USD/JPY retreats slightly from a two-week high as receding Fed hike bets undermine the USD.
- Expectations of further BoJ tightening support the JPY and contribute to capping spot prices.
- The technical setup warrants caution for bulls, though the US-Japan rate gap offers support.
The USD/JPY pair trades with a mild negative bias below mid-159.00s during the Asian session on Friday, though it remains close to a nearly two-week high touched the previous day.
Signs of cooling US inflation temper expectations for an immediate rate hike by the Federal Reserve (Fed), which keeps the US Dollar (USD) depressed. The Japanese Yen (JPY), on the other hand, draws some support from bets for further policy tightening by the Bank of Japan (BoJ), which contributes to capping the upside for the USD/JPY pair.
That said, borrowing costs in Japan remain significantly lower compared to other major economies, including the USD, which keeps the so-called JPY carry trade active. Furthermore, persistent geopolitical uncertainties should help limit deeper losses for the safe-haven Greenback and support the USD/JPY pair, warranting caution for bears.
From a technical perspective, the recent strong recovery from the 155.25-155.20 area, or the lowest since early May, stalls near the 50% Fibonacci retracement level of the intervention-led slump from a four-decade peak. Meanwhile, momentum indicators hint at waning upside momentum as the USD/JPY pair consolidates under dense resistance.
The Relative Strength Index (RSI) around 56 is mildly positive, while the Moving Average Convergence Divergence (MACD) has slipped slightly below zero with a soft negative histogram. Hence, any subsequent move beyond the 50% retracement level at 159.61 might confront a hurdle near the 100-period Exponential Moving Average (EMA) at 159.85.
A move beyond these levels should pave the way for further gains to the 61.8% retracement at 160.65 and the higher Fibonacci resistances at 162.12 and 164.00. On the downside, initial support is seen at the 38.2% retracement at 158.58, ahead of the 23.6% retracement near 157.30, while a deeper slide would expose the structural floor around 155.23.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
USD/JPY 4-hour chart
Japanese Yen Price This week
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.13% | -0.06% | 1.02% | -0.21% | 0.03% | 0.48% | 0.73% | |
| EUR | -0.13% | -0.19% | 0.83% | -0.45% | -0.16% | 0.24% | 0.50% | |
| GBP | 0.06% | 0.19% | 0.99% | -0.25% | 0.05% | 0.45% | 0.69% | |
| JPY | -1.02% | -0.83% | -0.99% | -0.90% | -0.64% | -0.37% | -0.07% | |
| CAD | 0.21% | 0.45% | 0.25% | 0.90% | 0.27% | 0.54% | 0.98% | |
| AUD | -0.03% | 0.16% | -0.05% | 0.64% | -0.27% | 0.40% | 0.66% | |
| NZD | -0.48% | -0.24% | -0.45% | 0.37% | -0.54% | -0.40% | 0.24% | |
| CHF | -0.73% | -0.50% | -0.69% | 0.07% | -0.98% | -0.66% | -0.24% |
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).
Gold prices fell in India on Friday, according to data compiled by FXStreet.
The price for Gold stood at 13,265.91 Indian Rupees (INR) per gram, down compared with the INR 13,343.67 it cost on Thursday.
The price for Gold decreased to INR 154,733.00 per tola from INR 155,637.90 per tola a day earlier.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 13,265.91 |
10 Grams | 132,658.70 |
Tola | 154,733.00 |
Troy Ounce | 412,633.90 |
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
- EUR/JPY may test immediate support at its nine-day EMA of 183.59.
- The 14-day Relative Strength Index at 48.21, signaling market consolidation.
- The initial resistance lies at its 50-day EMA near 184.49.
EUR/JPY remains flat after registering minor gains in the previous day, trading around 183.90 during the Asian hours on Friday. The currency cross is holding above the short-term nine-period Exponential Moving Average (EMA) but remaining capped by the medium-term 50-period EMA.
The moving averages configuration, together with a near-neutral 14-day Relative Strength Index (RSI) at 48.21, suggests a consolidative tone with a slight bearish bias as the pair struggles to reclaim its 50-period EMA while still respecting nearby dynamic support.
The EUR/JPY cross may test the immediate support at its nine-day Exponential Moving Average of 183.59. A decisive break below this short-term indicator would strengthen the prevailing bearish bias, potentially pressing the currency cross down toward its eight-month low of 179.37, recorded on August 3. If downward momentum continues, the next key technical target lies at the nine-month low of 175.70.
On the upside, the primary resistance lies at its 50-day EMA near 184.49. A sustained break above the medium-term price average could signal a broader bullish resurgence, opening the path for the pair to retest the area surrounding its all-time peak of 187.95 set on April 17.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.09% | -0.07% | -0.10% | -0.08% | -0.03% | -0.29% | -0.07% | |
| EUR | 0.09% | 0.01% | -0.02% | -0.03% | 0.06% | -0.20% | 0.01% | |
| GBP | 0.07% | -0.01% | 0.00% | -0.02% | 0.05% | -0.19% | 0.02% | |
| JPY | 0.10% | 0.02% | 0.00% | 0.02% | 0.06% | -0.21% | 0.04% | |
| CAD | 0.08% | 0.03% | 0.02% | -0.02% | 0.04% | -0.20% | 0.01% | |
| AUD | 0.03% | -0.06% | -0.05% | -0.06% | -0.04% | -0.25% | -0.03% | |
| NZD | 0.29% | 0.20% | 0.19% | 0.21% | 0.20% | 0.25% | 0.23% | |
| CHF | 0.07% | -0.01% | -0.02% | -0.04% | -0.01% | 0.03% | -0.23% |
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).
- EUR/USD builds on the overnight bounce from an over-one-week low amid a softer USD.
- Signs of cooling US inflation further temper Fed hike bets and weigh on the Greenback.
- Geopolitical risks should limit losses for the safe-haven buck and cap gains for the major.
The EUR/USD pair attracts some follow-through buyers during the Asian session on Friday and looks to build on the previous day's modest bounce from the vicinity of the 1.1500 psychological mark, or an over one-week low. Spot prices, however, remain confined in a two-week-old range and currently trade below 1.1550 amid mixed cues.
The US Producer Price Index (PPI) report, released on Thursday, fell short of estimates, which, along with soft US Consumer Price Index (CPI), pointed to a slowdown in overall inflation. This gives the US Federal Reserve (Fed) room to hold interest rates steady, which keeps the US Dollar (USD) depressed below a two-week low, touched on Thursday, and lends some support to the EUR/USD pair.
The shared currency, on the other hand, draws support from growing acceptance that the European Central Bank (ECB) will deliver one final 25-basis-point (bps) rate hike at its September meeting as inflation remains above the 2% target. However, persistent geopolitical uncertainties could limit losses for the safe-haven buck and hold back bulls from placing aggressive bets on the EUR/USD pair.
In the latest developments, NATO fighter jets shot down a drone over Latvian airspace early Friday, while Finland imposed a temporary restriction on aviation and maritime traffic in the eastern Gulf of Finland. Adding to this, Reuters reported that Russia downed 15 drones near its border with Finland and Estonia overnight, marking a fresh escalation in an over six-year-old Russia-Ukraine conflict.
Furthermore, traders continue to price in the war-risk premium on the back of the US-Iran standoff over the Strait of Hormuz. Adding to this, the Iran-backed Houthis in Yemen escalated attacks on vessels in the Red Sea and Bab el-Mandeb Strait, and also claimed a drone strike on a Saudi Aramco refinery, raising the risk of a broader regional conflict. This favors USD bulls and should cap the EUR/USD pair.
EUR/USD 4-hour chart
Technical Analysis
The EUR/USD pair maintains a modest bullish near-term bias above the 200-period Exponential Moving Average (EMA) on the 4-hour chart. That said, a breakout through a two-week-old trading range hurdle near 1.1565 is needed to back further gains. On the downside, immediate support aligns with the lower boundary of the range near 1.1500, with stronger underlying demand seen at the 200-period EMA around 1.1489. The latter reinforces the broader floor for the pair on this timeframe.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
- Traders stay cautious before Prabowo’s 2027 budget speech, as a consumption focus clashes with export curbs and falling approval ratings.
- The US Dollar drops as weaker-than-expected US inflation data decrease Fed rate hike bets.
- Federal Reserve rate hike expectations for September drop to nearly 35%.
USD/IDR loses ground after three days of losses, trading around 17,880 during the Asian hours on Friday. Traders remain cautious ahead of President Prabowo Subianto’s 2027 budget address to parliament later in the day.
The budget proposal is expected to prioritize domestic consumption despite declining approval ratings and investor anxiety over commodity export restrictions. Market attention is also shifting to Bank Indonesia’s (BI) policy meeting next week, its first following the sudden departure of Governor Perry Warjiyo and a cumulative 100-basis-point rate hike across May and June.
The USD/IDR pair edges lower as the US Dollar (USD) faces downward pressure following a softer-than-expected US inflation report. Market attention is now turning toward the upcoming US July Retail Sales data scheduled for release later in the day. Adding to the broader inflation picture, the Bureau of Labor Statistics reported that US wholesale costs for goods and services were flat in July, cooling more than the anticipated 0.2% growth, after a revised 0.1% decline in June. Excluding volatile food and energy components, the core Producer Price Index (PPI) rose 0.2%, coming in slightly below market consensus expectations of 0.3%. On an annual basis, headline PPI climbed 4.7% year-over-year in July, while core PPI increased by 4.2% over the same period.
These cooling inflation metrics have shifted expectations regarding Federal Reserve policy. According to the CME FedWatch Tool, markets are now pricing in a 34.8% probability of a U.S. rate hike at the upcoming September meeting, down from 40% immediately following the PPI data release.
Dollar outlook softens as Fed expectations cool but oil risks linger
Rabobank’s Senior FX Strategist Jane Foley observes that “Fed rate hike speculation has recently suffered a setback on the back of recent US data releases,” a shift that “opens the prospect of further slippage for the greenback.” She cautions, however, that this softer Dollar narrative remains vulnerable to renewed energy market stress, noting that the view “could still be thrown off course if oil prices spike higher again.”
- Silver price slumps to near $63.80 as global supply concerns keep inflation projections de-anchored.
- Traffic through key passages, the the Strait of Hormuz and Bab al-Mandab Strait, remains almost negligible.
- The Fed is unlikely to deliver an interest rate hike in the September meeting.
Silver price (XAG/USD) is down 1% to near $63.80 during the Asian trading session on Friday. The white metal faces selling pressure as financial markets remain worried about the global energy supply disruption due to the blockade on the Strait of Hormuz and Bab al-Mandab Strait, which together account for almost 27% of global energy supply.
Minimal traffic through these straits is keeping oil prices higher, a scenario that boosts inflation expectations and prompts fears of interest rate hikes by central banks. Such a case bodes poorly for non-yielding assets, like Silver.
As of writing, the WTI Oil price trades flat at around $80.45. The oil price has faced slight selling pressure in the past few days; however, supply concerns are expected to keep the downside limited.
Oil momentum cools, but TD Securities still sees upside ahead
According to TD Securities, the recent loss of steam in the rally has seen “easing near-term momentum” and has “also catalysed modest selling in WTI crude on the day.” However, the bank’s commodity strategists “continue to highlight that fundamental tightness across crude and product markets should ultimately support further upside,” suggesting that the latest bout of selling is viewed as a temporary setback within an otherwise constructive medium-term outlook for Oil prices.
Meanwhile, traders pricing out the possibility of a Federal Reserve (Fed) interest rate hike in the September meeting due to a slight slowdown in United States (US) inflation growth and rising labor market concerns are expected to limit the downside in the Silver price.
According to the CME FedWatch tool, the odds of the Fed holding policy rates steady in the September meeting have increased to almost 65%. This is a sharp turnaround from a 75% chance that the Fed would deliver two interest rate hikes by the end of the September policy meeting, recorded a month ago.
Silver Technical Analysis
XAG/USD trades at around $63.78, extending its advance above the 20-day Exponential Moving Average (EMA) at $61.78 and hinting at a bullish near-term bias.
The metal is holding comfortably over its short-term trend indicator, while the Relative Strength Index (RSI) at 56 stays in positive territory without reaching overbought conditions, suggesting that buyers retain control but still have room to push prices higher.
On the downside, initial support is seen at the 20-day EMA near $61.78, which underpins the current bullish structure and would be the first level to watch on any pullback. A deeper slide would expose the broader momentum floor implied by the RSI zone around 56, where dip-buying interest could re-emerge as long as price holds above the $61 handle. On the upside, the June 16 high near $71.20 would be the key hurdle.
(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.
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