Forex News
Commerzbank’s Dr. Vincent Stamer notes that the Euro area composite PMI fell further into contraction territory in May, suggesting a weak second quarter for the economy. Both manufacturing and services sentiment deteriorated, with services notably weaker. Rising input prices and only partial pass-through to selling prices leave the ECB balancing inflation risks against already soft activity.
PMI slide highlights growth headwinds
"Business sentiment in the euro area has continued to deteriorate. Contrary to expectations, the Purchasing Managers’ Index (PMI) fell again in May, from 48.8 to 47.5. This marks the third consecutive month of decline for this indicator, driven by the ongoing conflict in the Persian Gulf."
"Meanwhile, sentiment has continued to deteriorate in both the manufacturing sector (from 52.2 to 51.4) and the services sector (from 47.6 to 46.4). However, the impact of the Iran conflict on manufacturing appears to be less severe so far than on the services sector."
"In contrast, the PMI for services points to a significant contraction in the sector. Consumers have likely cut back on spending elsewhere due to rising energy prices."
"The number of companies reporting rising input prices has continued to increase. As in the previous month, the sub-components for input prices rose in both the services sector and the manufacturing sector. In the manufacturing sector, it reached 80.1, the highest level since 2022."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Bank of Richmond Federal Reserve (Fed) President Thomas Barkin said on Thursday that "current monetary policy is in a good place to respond to ongoing shocks." Speaking about the US economic outlook and monetary policy, Barkin added that future rate decisions will depend on how businesses and consumers react to developing conditions.
Key quotes:
Current policy is in a good place to respond to ongoing shocks.
Whether the Fed needs to hike rates depends on how businesses, consumers react to developing conditions.
Consumers are not happy but continue to spend.
Businesses are so far managing productivity improvements through attrition and not layoffs.
Policy of looking through supply shocks has worked well in the past, but it is easy to see more challenging conditions and more frequent shocks in the future.
So far long-term inflation expectations appear to remain contained.”
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 Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.00% | 0.02% | 0.24% | -0.09% | -0.13% | 0.02% | |
| EUR | -0.06% | -0.06% | -0.06% | 0.16% | -0.16% | -0.24% | -0.06% | |
| GBP | -0.01% | 0.06% | 0.02% | 0.22% | -0.09% | -0.15% | -0.01% | |
| JPY | -0.02% | 0.06% | -0.02% | 0.19% | -0.11% | -0.23% | -0.02% | |
| CAD | -0.24% | -0.16% | -0.22% | -0.19% | -0.29% | -0.38% | -0.23% | |
| AUD | 0.09% | 0.16% | 0.09% | 0.11% | 0.29% | -0.08% | 0.06% | |
| NZD | 0.13% | 0.24% | 0.15% | 0.23% | 0.38% | 0.08% | 0.14% | |
| CHF | -0.02% | 0.06% | 0.00% | 0.02% | 0.23% | -0.06% | -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 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).
Iranian media reports, citing Al-Arabiya, suggest that the final draft of a US–Iran agreement has reportedly been completed with Pakistani mediation, with an official announcement potentially coming within hours.
According to the reported details, the deal would include an immediate and comprehensive ceasefire, commitments from both sides to avoid targeting infrastructure, and guarantees for freedom of navigation through the Persian Gulf and Strait of Hormuz under a joint monitoring mechanism.
The draft also reportedly outlines a gradual lifting of sanctions tied to Iran’s compliance, while negotiations on unresolved issues would begin within seven days.
ABN AMRO’s Georgette Boele notes that Sterling has weakened alongside the Euro versus the US Dollar, with energy prices a key driver. She argues UK political uncertainty could temporarily lift volatility in Sterling and gilts, but expects this phase to be short-lived. Clear fiscal rules and continuity under Rachel Reeves could ultimately support the Pound despite leadership changes.
UK politics, gilts and fiscal outlook
"Uncertainty and speculation about possible changes in fiscal policy are expected to increase volatility in both gilt and currency markets, especially if a leadership contest takes place."
"However, we anticipate that this period of instability will be brief."
"If Rachel Reeves remains as chancellor, it would demonstrate consistency and a commitment to the fiscal rules that have supported market stability."
"We believe that, even with political changes, new policies are unlikely to worsen the UK's financial situation."
"In fact, new leadership may lead to higher government spending while sticking to the fiscal rules, which could strengthen the pound (see here)."
"UK politics may raise short-term volatility in sterling. But fiscal clarity could support sterling."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Banco de Mexico (Banxico) released its latest meeting minutes on Thursday, in which the Middle East conflict dominated the board's discussion.
On May 7, Banxico cut rates by 25 basis points to 6.50%, while telegraphing that the easing cycle that began in 2024 is over. The decision was not unanimous, with a 3-2 vote, with Deputy Governors Galia Borja and Jonathan Heath voting to hold rates unchanged.
All the members of the board expressed that risks to inflation are tilted to the upside, due to the Middle East conflict, though they “argued that their direct impact on inflation in Mexico has been limited,” the minutes revealed.
Key highlights:
MOST BOARD MEMBERS AT BANXICO'S MAY MEETING CONSIDERED BALANCE OF RISKS FOR TRAJECTORY OF INFLATION REMAINS BIASED TO THE UPSIDE
ALL BANXICO BOARD MEMBERS HIGHLIGHTED THE UPWARD RISKS RELATED TO THE MIDDLE EAST CONFLICT
MOST BANXICO BOARD MEMBERS INDICATED THAT THE CONTRACTION OF ECONOMIC ACTIVITY WAS THE RESULT OF DECLINES ACROSS ITS THREE MAJOR SECTORS
MOST BANXICO BOARD MEMBERS MENTIONED THAT ECONOMIC ACTIVITY IN MEXICO CONTRACTED DURING THE FIRST QUARTER NOTABLY GREATER THAN ANTICIPATED
BANXICO'S BORJA: ADOPTING A CAUTIOUS APPROACH AND MAINTAINING THE CURRENT POLICY STANCE IS ADEQUATE TO HAVE MORE INFORMATION THAT ALLOWS US TO ASSESS MORE ACCURATELY THE INFLATIONARY OUTLOOK
BANXICO'S HEATH: THE NARROW MARGIN FOR FURTHER RATE CUTS AND FOR REDUCING THE DIFFERENTIAL WITH RESPECT TO EXTERNAL RATES, ALONG WITH AN ELEVATED UNCERTAINTY, JUSTIFIES PAUSE
BANXICO'S HEATH CITES SUSTAINED CORE INFLATION AS WELL AS PRICE SHOCKS, MILITARY CONFLICTS AND FISCAL ADJUSTMENTS
ONE BANXICO BOARD MEMBER SAID AS EVOLUTION OF PRICE SHOCKS IS STILL UNCERTAIN, UPSIDE RISKS TO INFLATION IN THE MEXICAN ECONOMY REMAIN CONTAINED
MOST BANXICO BOARD MEMBERS MOST MEMBERS POINTED OUT THAT SLACK CONDITIONS ARE EXPECTED TO CONTINUE WIDENING AND REDUCE INFLATIONARY PRESSURES
Banxico FAQs
The Bank of Mexico, also known as Banxico, is the country’s central bank. Its mission is to preserve the value of Mexico’s currency, the Mexican Peso (MXN), and to set the monetary policy. To this end, its main objective is to maintain low and stable inflation within target levels – at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%.
The main tool of the Banxico to guide monetary policy is by setting interest rates. When inflation is above target, the bank will attempt to tame it by raising rates, making it more expensive for households and businesses to borrow money and thus cooling the economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN. The rate differential with the USD, or how the Banxico is expected to set interest rates compared with the US Federal Reserve (Fed), is a key factor.
Banxico meets eight times a year, and its monetary policy is greatly influenced by decisions of the US Federal Reserve (Fed). Therefore, the central bank’s decision-making committee usually gathers a week after the Fed. In doing so, Banxico reacts and sometimes anticipates monetary policy measures set by the Federal Reserve. For example, after the Covid-19 pandemic, before the Fed raised rates, Banxico did it first in an attempt to diminish the chances of a substantial depreciation of the Mexican Peso (MXN) and to prevent capital outflows that could destabilize the country.
An X post from Al Jazeera reporter Ali Hashem hit newswires with statements from an unnamed source that earlier reports of an Iranian decree limiting the removal of high-grade nuclear material are false.
A "senior Iranian official" reportedly told the Al Jazeera reporter that Supreme Leader Mujtaba Khamenei never said that uranium must stay in Iran, calling the reporting "propaganda".
The official added that "no new order has been issued".
HSBC maintains an optimistic but selective stance on Asia, favouring markets with strong growth, innovation and improving shareholder returns. The bank highlights AI and cloud-driven data centre expansion, China’s AI leadership, South Korea’s semiconductor strength and multiple growth drivers in Hong Kong. It also stresses attractive yields in Asian bonds and a barbell strategy combining growth and income.
Innovation-led growth with income support
"We remain optimistic but selective on Asia, focusing on markets with strong economic growth and earnings momentum, driven by a strong capex cycle linked to innovation and manufacturing strength."
"With the rapid adoption of AI and cloud technologies, Asia Pacific is expected to account for 40% of global data centre capacity by 2030, and growth is continuing at speed. Mainland China is at the forefront of AI development, as technology and industrial leaders are benefitting from favourable government policies and improving margins."
"Leading hardware companies in South Korea are faring well amid rising demand for high-performance semiconductors. In Hong Kong, we see multiple growth drivers beyond AI adoption, including a pick-up in consumption, increased IPO activity, strong liquidity inflows and an improving housing market."
"Meanwhile, there are plenty of income opportunities from high-quality dividend stocks, thanks to corporate governance reforms in markets such as South Korea and Japan that are boosting shareholder returns. Asian bonds also offer attractive yields and are less sensitive to interest rate volatility in developed markets."
"Our focus on innovation aligns well with our overweight positions in mainland China, Hong Kong, Singapore and South Korea."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/JPY climbs toward the 159.30 region, approaching the key 160.00 level that previously triggered BoJ intervention.
- US Manufacturing PMI rises to 55.3 in May, boosting the US Dollar and supporting expectations that the Fed may keep rates higher for longer.
- US Treasury Secretary Scott Bessent says excessive FX volatility is undesirable, indirectly supporting Japan’s recent efforts to stabilize the Yen.
The USD/JPY pair rose toward the 159.30 price zone, closing in on the 160.00 level, which usually prompts intervention by the Bank of Japan (BoJ).
The latest S&P Global flash Purchasing Managers Index (PMI) data showed the US Composite PMI held steady at 51.7 in May, matching April’s reading and signaling continued economic expansion. Manufacturing activity improved further, with the Manufacturing PMI rising to 55.3 from 54.5, surpassing market expectations of 54.0. Meanwhile, the Services PMI eased slightly to 50.9 from 51.0, highlighting softer momentum in the service sector.
According to S&P Global, “business activity continued to grow in May but at a reduced rate compared to that seen earlier in the year,” while the report also noted that service sector growth remains sluggish amid only modest improvements in new business inflows. The stronger manufacturing figures helped support the Greenback as traders reassessed expectations for Federal Reserve (Fed) rate cuts.
US Treasury Secretary Scott Bessent stated that the United States and Japan agree that excessive volatility in currency markets is undesirable, comments interpreted as indirect support for Tokyo’s recent intervention efforts to stabilize the Yen. Bessent also expressed confidence that Bank of Japan (BoJ) Governor Kazuo Ueda will successfully guide monetary policy and avoid falling behind inflation pressure.
USD/JPY technical analysis:
On the 4-hour chart, USD/JPY trades at 159.19. The pair retains a bullish near-term bias as price holds above both the 20-period Simple Moving Average (SMA) around 158.99 and the 100-period SMA near 157.82, keeping the broader uptrend structure intact. The horizontal line drawn at 159.19 is being tested as a pivot area, while the Relative Strength Index (RSI) eases back toward 68, hinting that upside momentum remains constructive but is edging closer to overbought territory, which could slow the pace of further gains.
On the topside, immediate resistance is seen at the 159.19 pivot area, followed by the horizontal barrier at 159.35, where a clear break would open the way to fresh highs in the near term. On the downside, initial support is located at 159.09, ahead of the 20-period SMA and the horizontal level at 158.90, with the 100-period SMA providing a deeper dynamic floor if a corrective pullback extends.
(The technical analysis of this story was written with the help of an AI tool.)
Swiss National Bank (SNB) Vice Chairman Martin Schlegel said on Thursday that the central bank maintains an “elevated willingness” to intervene in foreign exchange markets if necessary. Martin also noted that Swiss inflation currently remains within the SNB’s price stability range, signaling that policymakers continue to monitor price developments and currency conditions closely.
SNB FAQs
The Swiss National Bank (SNB) is the country’s central bank. As an independent central bank, its mandate is to ensure price stability in the medium and long term. To ensure price stability, the SNB aims to maintain appropriate monetary conditions, which are determined by the interest rate level and exchange rates. For the SNB, price stability means a rise in the Swiss Consumer Price Index (CPI) of less than 2% per year.
The Swiss National Bank (SNB) Governing Board decides the appropriate level of its policy rate according to its price stability objective. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame excessive price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Yes. The Swiss National Bank (SNB) has regularly intervened in the foreign exchange market in order to avoid the Swiss Franc (CHF) appreciating too much against other currencies. A strong CHF hurts the competitiveness of the country’s powerful export sector. Between 2011 and 2015, the SNB implemented a peg to the Euro to limit the CHF advance against it. The bank intervenes in the market using its hefty foreign exchange reserves, usually by buying foreign currencies such as the US Dollar or the Euro. During episodes of high inflation, particularly due to energy, the SNB refrains from intervening markets as a strong CHF makes energy imports cheaper, cushioning the price shock for Swiss households and businesses.
The SNB meets once a quarter – in March, June, September and December – to conduct its monetary policy assessment. Each of these assessments results in a monetary policy decision and the publication of a medium-term inflation forecast.
- EUR/USD remains under pressure as traders monitor developments surrounding US-Iran negotiations.
- The US Dollar Index climbs to its highest level since April 7 amid safe-haven demand.
- The latest PMI data highlighted growing economic weakness in the Eurozone, while US business activity remained comparatively stable.
The Euro (EUR) trades on the back foot against the US Dollar (USD) on Thursday, with EUR/USD easing from earlier intraday highs as price action remains driven by geopolitical headlines surrounding developments in the Middle East. At the time of writing, the pair is trading near six-week lows around 1.1585, easing from an intraday high of 1.1635.
The US Dollar continues to gain traction as traders remain skeptical about whether Washington and Tehran can reach an agreement to end the war and reopen the Strait of Hormuz. Iran’s nuclear program remains a major sticking point in negotiations with Washington.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is trading around 99.40, its highest level since April 7.
Adding to the uncertainty, Reuters reported earlier on Thursday, citing two senior Iranian sources, that Iran’s Supreme Leader had ordered that near-weapons-grade uranium must remain inside the country. However, Al Jazeera later reported that an Iranian official denied the claims.
The conflicting headlines added to volatility across financial markets, although diplomatic efforts between Washington and Tehran continue. Still, US President Donald Trump has maintained a hardline stance on Iran’s nuclear ambitions and warned that military action could resume if no agreement is reached.
Meanwhile, elevated Oil prices continue to fuel inflation concerns, prompting traders to increase bets that the Federal Reserve (Fed) could raise interest rates by the end of the year. The hawkish repricing is pushing US Treasury yields higher, with the benchmark 10-year Treasury yield holding near the 16-month highs touched earlier this week.
At the same time, rising energy prices remain a concern for the Eurozone economy due to the region’s heavy reliance on imported energy. Investors fear persistently high Oil prices could slow economic growth and limit the European Central Bank’s (ECB) ability to raise interest rates aggressively if inflation pressures continue to intensify.
On the data front, traders also digested the latest preliminary Purchasing Managers Index (PMI) data for May from both the Eurozone and the United States. The US Composite PMI held steady at 51.7 in May, while the Manufacturing PMI rose to 55.3 from 54.5 previously, marking a 48-month high. The Services PMI Business Activity Index eased slightly to 50.9 from 51 in April.
The Eurozone’s Composite PMI fell to 47.5 in May from 48.8 in April, marking a 31-month low. The Services PMI dropped to 46.4 from 47.6, its lowest level in 63 months, while the Manufacturing PMI eased to 51.4 from 52.2 previously, a three-month low.
Economic Indicator
Michigan Consumer Expectations Index
The University of Michigan's Inflation Expectations gauge captures how much consumers anticipate prices will change over the coming 12 months. It comes out in two rounds—a preliminary release that tends to pack a bigger punch, followed by a revised update two weeks later.
Read more.Next release: Fri May 22, 2026 14:00
Frequency: Monthly
Consensus: 48.5
Previous: 48.5
Source: University of Michigan
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