Forex News
- GBP/JPY finds some support near mid-216.00s, though it lacks follow-through amid mixed cues.
- Economic concerns due to Hormuz risks and the wide interest rate gap prompt fresh JPY selling.
- Receding UK political uncertainty contributes to the GBP’s outperformance against a weaker JPY.
The GBP/JPY cross rebounds a few pips following an Asian session dip to mid-216.00s on Monday, stalling its modest pullback from the highest level since January 2008, touched last week. Spot prices, however, lack follow-through and remain below the 217.00 mark, warranting caution for aggressive bulls.
The Japanese Yen (JPY) attracts fresh sellers as energy supply disruptions in the Strait of Hormuz fuel economic concerns amid Japan’s heavy reliance on imported oil from the Middle East. Adding to this, a persistently wide interest rate gap between Japan and other major economies, including the UK, keeps the so-called JPY carry trade active and acts as a tailwind for the GBP/JPY cross.
In the latest developments, the US unleashed a major round of strikes on Iran, while Tehran responded with missile attacks on American military bases in the Gulf. Moreover, Iran’s Islamic Revolutionary Guard Corps (IRGC) fired at another commercial vessel in the Strait of Hormuz and announced the closure of the critical waterway, prompting traders to price in a geopolitical risk premium.
Meanwhile, the Bank of Japan (BoJ) raised its policy rate in June to 1% or, the highest level since 1995, and the Bank of England's (BoE) base rate is at 3.75%, leaving a rate differential of around 275 basis points (bps). Moreover, easing UK political uncertainty and hawkish BoE bets contribute to the British Pound's (GBP) outperformance against its Japanese counterpart, supporting the GBP/JPY cross.
In fact, former Greater Manchester mayor Andy Burnham secured the support of the vast majority of Labour MPs to replace Keir Starmer and become Britain's next Prime Minister. Furthermore, traders see a greater chance of at least one 25-basis-point (bps) rate hike from the BoE by the year-end. However, intervention risks and the hawkish BoJ could limit JPY losses and cap the GBP/JPY cross.
Traders remain on high alert amid speculations that Japanese authorities will step in again to prop up the domestic currency. Moreover, three sources said that the BoJ may revise up its economic growth forecast for fiscal 2026 and keep its focus on the risk of an inflation overshoot at the upcoming policy meeting later this month. This could further support the JPY and keep a lid on the GBP/JPY cross.
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 Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.11% | 0.15% | 0.18% | 0.03% | 0.33% | 0.05% | 0.08% | |
| EUR | -0.11% | 0.05% | 0.06% | -0.08% | 0.23% | -0.02% | -0.01% | |
| GBP | -0.15% | -0.05% | 0.02% | -0.14% | 0.21% | -0.06% | -0.02% | |
| JPY | -0.18% | -0.06% | -0.02% | -0.16% | 0.15% | -0.10% | -0.05% | |
| CAD | -0.03% | 0.08% | 0.14% | 0.16% | 0.32% | 0.09% | 0.12% | |
| AUD | -0.33% | -0.23% | -0.21% | -0.15% | -0.32% | -0.21% | -0.18% | |
| NZD | -0.05% | 0.02% | 0.06% | 0.10% | -0.09% | 0.21% | 0.04% | |
| CHF | -0.08% | 0.00% | 0.02% | 0.05% | -0.12% | 0.18% | -0.04% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the 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 Saudi Arabia on Monday, according to data compiled by FXStreet.
The price for Gold stood at 489.84 Saudi Riyals (SAR) per gram, down compared with the SAR 497.35 it cost on Friday.
The price for Gold decreased to SAR 5,713.50 per tola from SAR 5,801.03 per tola on friday.
Unit measure | Gold Price in SAR |
|---|---|
1 Gram | 489.84 |
10 Grams | 4,898.52 |
Tola | 5,713.50 |
Troy Ounce | 15,235.74 |
FXStreet calculates Gold prices in Saudi Arabia by adapting international prices (USD/SAR) 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.)
- USD/JPY may rise toward the 40-year high of 162.84.
- The 14-day Relative Strength Index’s drop to the mid-50s indicates that consolidation is neutralizing previous overbought conditions.
- The currency pair is positioned slightly above the nine-day EMA of 161.98.
USD/JPY gains ground after two days of losses, trading around 162.00 during the Asian hours on Monday. The currency pair is keeping a bullish near-term bias as spot holds above both the nine-period and 50-period Exponential Moving Averages (EMAs).
Additionally, the daily technical analysis indicates that the USD/JPY pair is remaining within an ascending channel pattern, suggesting a prevailing bullish bias. Meanwhile, the 14-day Relative Strength Index (RSI) has eased back toward the mid-50s, suggesting the latest consolidation is working off previous overbought conditions without yet undermining the broader uptrend.
The USD/JPY pair could find initial resistance at the 40-year high of 162.84, which was reached on July 1, followed by the upper boundary of the ascending channel around 164.00.
On the downside, the immediate support lies at the nine-day EMA of 161.98, followed by the lower boundary of the ascending channel around 160.80, followed by the 50-day EMA at 160.58. A break below the channel would expose the four-month low of 155.04, recorded on May 6.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.10% | 0.14% | 0.18% | 0.00% | 0.31% | 0.06% | 0.04% | |
| EUR | -0.10% | 0.03% | 0.07% | -0.10% | 0.22% | -0.00% | -0.04% | |
| GBP | -0.14% | -0.03% | 0.07% | -0.14% | 0.20% | -0.03% | -0.03% | |
| JPY | -0.18% | -0.07% | -0.07% | -0.18% | 0.14% | -0.08% | -0.08% | |
| CAD | -0.01% | 0.10% | 0.14% | 0.18% | 0.32% | 0.12% | 0.11% | |
| AUD | -0.31% | -0.22% | -0.20% | -0.14% | -0.32% | -0.18% | -0.19% | |
| NZD | -0.06% | 0.00% | 0.03% | 0.08% | -0.12% | 0.18% | -0.01% | |
| CHF | -0.04% | 0.04% | 0.03% | 0.08% | -0.11% | 0.19% | 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).
- AUD/JPY softens to near 112.25 in Monday’s early European session.
- Reports that Japan plans to encourage pension funds to increase their holdings of domestic financial assets support the Japanese Yen.
- The bearish tone for the cross remains intact below the 100-day SMA.
- The immediate resistance level emerges at 112.35; the initial support level to watch is 111.15.
The AUD/JPY cross trades in negative territory around 112.25 during the early European trading hours on Monday. The Japanese Yen (JPY) strengthens against the Australian Dollar (AUD) amid a renewed push by Japanese authorities for the nation’s massive public pension funds to increase allocations to domestic assets.
"The pension funds are pretty large in size (and) currently, 50 per cent is allocated to foreign investments in their strategic allocation, (so) a shift in that would definitely create a lot more inflows for domestic assets," said Fabien Yip, a market analyst at IG. "That's supportive of the currency and at the same time, also supportive of equities and bonds,” Yip added.
Technical Analysis:
In the daily chart, AUD/JPY holds a mildly bearish bias as it slips under the Bollinger middle band and consolidates just above the lower half of the recent range. The 20-day Bollinger envelope now caps price action, while the 100-day simple moving average (SMA) around 112.59 remains an underlying trend reference, suggesting that recent weakness is still occurring within a broader uptrend. The Relative Strength Index (14) has eased to about 47, hinting at fading upside momentum without yet indicating oversold conditions.
On the topside, immediate resistance emerges at the Bollinger middle band near 112.35, with further upside barriers seen at the upper Bollinger band around 113.52. On the downside, a move below the recent band floor near 111.15 would expose deeper corrective risk, with the broader trend still anchored by the longer-term 100-day SMA acting as an important demand area on pullbacks.
(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.
- USD/IDR rises as the US Dollar receives support from increased safe-haven demand.
- US CENTCOM conducted a new round of Sunday airstrikes to degrade Iran's ability to attack commercial shipping channels.
- A two-day domestic equity rally across key sectors could limit the Indonesian Rupiah’s downside.
USD/IDR gains ground after registering losses in the previous day, trading around 18,180 during the Asian hours on Monday. The US Dollar (USD) appreciated as intensifying geopolitical tensions in the Middle East sparked a wave of safe-haven demand.
According to Bloomberg, US Central Command (CENTCOM) launched additional airstrikes on Sunday evening aimed at neutralizing Iran's capability to target civilian vessels navigating critical waterways. Reuters further reported that US forces have struck more than 300 Iranian targets over a three-night span, including 140 on Saturday alone. This military escalation has left Washington and Tehran issuing conflicting declarations regarding whether the strategic strait remains open to maritime traffic.
Beyond the direct geopolitical friction, the Greenback receives a secondary boost as the escalating US-Iran missile strikes push oil prices higher, stoking fresh fears of inflation and a prolonged high-interest-rate environment. Investors are now turning their attention to Tuesday's US Consumer Price Index (CPI) data for clearer signals on the Federal Reserve's policy outlook. June's headline CPI is projected to decline by 0.1% month-on-month, while core CPI is expected to rise by 0.3% over the same period.
With traders still anticipating one more interest rate hike before the year concludes, monetary policy remains a critical market driver. Consequently, all eyes will be on Fed Chair Kevin Warsh this Tuesday as he makes his highly anticipated first official appearance before the US Congress.
The Indonesian Rupiah (IDR) may find a floor as domestic equities rallied for a second consecutive day, driven by gains in cyclicals, infrastructure, basic materials, and energy. Market sentiment was lifted by data showing robust investment momentum within strategic sectors of the country's special economic zones, a trend likely to draw global emerging-market capital. Because foreign institutional investors must convert foreign currency into Rupiah to purchase local shares, this capital inflow creates direct localized demand, providing an immediate structural cushion for the IDR.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
- WTI attracts fresh buyers at the start of a new week amid escalating US-Iran tensions.
- The technical setup warrants some caution before positioning for a further move up.
- A move beyond the 23.6% Fibo. and the 200-day SMA will negate the negative bias.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – builds on its modest bullish gap opening and climbs above the $74.00 mark during the Asian session on Monday. A further escalation of tensions between the US and Iran, along with the closure of the Strait of Hormuz, adds a layer of uncertainty in the energy market, providing a goodish lift to the black liquid.
From a technical perspective, the commodity retains a bearish near-term bias below the 200-day Exponential Moving Average (EMA) and the 23.6% Fibonacci retracement level of the April-July downfall. Meanwhile, the Moving Average Convergence Divergence (MACD) has turned positive, hinting at some rebuilding upside momentum. However, the Relative Strength Index (RSI) around 47 remains below the midline, suggesting that rebounds are still occurring within a broader capped structure rather than a confirmed trend reversal.
Hence, any subsequent move higher might continue to face resistance at the 23.6% Fibo. level near $76.58, ahead of the 200-day EMA at $77.19. This forms the first critical supply band bulls would need to reclaim to ease downside pressure. Further up, resistance is seen at the 38.2% retracement around $82.45, followed by the 50% level near $87.20 and the 61.8% retracement close to $91.95, with higher barriers at $98.71. On the downside, the main structural support sits at the prior swing low around $67.08, where a break would reopen the broader bearish leg.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI daily chart
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.
Gold prices fell in India on Monday, according to data compiled by FXStreet.
The price for Gold stood at 12,486.07 Indian Rupees (INR) per gram, down compared with the INR 12,683.20 it cost on Friday.
The price for Gold decreased to INR 145,633.80 per tola from INR 147,934.30 per tola on friday.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 12,486.07 |
10 Grams | 124,863.60 |
Tola | 145,633.80 |
Troy Ounce | 388,366.10 |
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.)
- USD/CHF gains as the US Dollar gains on increased safe-haven demand.
- US CENTCOM launched fresh Sunday strikes to weaken Iran's capability to target civilian vessels in the waterway.
- Swiss weak data permits SNB rate cuts or currency interventions to weaken the Franc.
USD/CHF gains ground for the second successive day, trading around 0.8100 during the Asian hours on Monday. The pair appreciates as the US Dollar rises on increased safe-haven demand amid heightened geopolitical tensions in the Middle East. According to Bloomberg, the US Central Command (CENTCOM) launched additional strikes on Sunday evening, aimed at weakening Iran's capability to target civilian vessels navigating the waterway.
Reuters reported that US forces have hit more than 300 Iranian targets over a three-night span, including 140 on Saturday alone, while Washington and Tehran issued conflicting declarations regarding whether the strait remains open to maritime traffic.
Additionally, the US Dollar receives support from escalating US-Iran missile strikes, which pushed oil higher and sparked fears of inflation and higher Federal Reserve (Fed) interest rates. The US Consumer Price Index (CPI) inflation data will be eyed on Tuesday for further clues on the Federal Reserve's (Fed) policy outlook. The headline CPI is expected to decline by 0.1% MoM in June, while the core CPI is projected to show a rise of 0.3% during the same period.
Traders expect the Fed to deliver one more interest-rate increase before the year concludes. Meanwhile, all eyes will be on Fed Chair Kevin Warsh as he makes his first official appearance before the US Congress this Tuesday.
Switzerland’s consumer confidence index dropped to -36 in June 2026, down from -32 in June 2025 and slightly worse than the market forecast of -35. With domestic sentiment deeply negative and Swiss inflation remaining highly contained, flatlining month-on-month at just 0.5% annually in June, the Swiss National Bank (SNB) faces zero pressure to raise interest rates. If anything, weak data keeps the door wide open for the SNB to cut interest rates or intervene in the foreign exchange market to intentionally weaken the franc. This makes the CHF less attractive to yield-seeking investors.
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame 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.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
- EUR/USD trades lower at around 1.1390 as the US Dollar strengthens.
- Increased aggression between the US and Iran has improved the US Dollar’s safe-haven demand.
- Investors await Fed Chair Warsh’s testimony and the US CPI data.
The Euro (EUR) holds opening losses at around 1.1390 against the US Dollar (USD) during the mid-Asian trading session on Monday. The major currency pair faces selling pressure as the US Dollar starts the week on a strong note due to an increase in the appeal of safe-haven assets.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.2% higher to near 101.15.
Escalating military actions between the United States (US) and Iran over Tehran showing dominance over the Strait of Hormuz, a critical chokepoint to almost 20% of global energy supply, have forced investors to shift to the safe-haven fleet and have de-anchored inflation expectations.
To get cues regarding the current status of US inflation, investors will pay close attention to the Consumer Price Index (CPI) data for June, which will be released on Tuesday.
This week, investors will also focus on Federal Reserve (Fed) Chair Kevin Warsh’s two-day testimony before Congress starting on Tuesday.
Technical Analysis:
EUR/USD trades lower at around 1.1390, keeping a bearish near-term tone as spot holds beneath the 20-period Exponential Moving Average (EMA) at 1.1443 and a breakdown of the Bearish Flag formation.
The Relative Strength Index (14) hovers near 38, hinting at persistent but not extreme downside momentum.
On the topside, initial resistance is aligned with the lower boundary of the parallel channel near 1.1424, followed by the 20-period EMA at 1.1443, with the channel top around 1.1530 acting as a stronger cap if a rebound extends. On the downside, major support levels are the June 24 low at 1.1324, followed by 1.1300.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
- EUR/JPY gains momentum to near 184.65 in Monday’s Asian session.
- The cross keeps a bearish vibe in the near term, with the RSI holding below the midline.
- The first upside barrier emerges in the 184.80-184.85 zone; the initial support level is seen at 183.53.
The EUR/JPY cross trades in positive territory around 184.65 during the Asian trading hours on Monday. However, the potential upside for the cross might be limited as heightened geopolitical tensions in the Middle East could boost a safe-haven currency.
Furthermore, speculation over domestic asset shifts could underpin the Japanese Yen (JPY) against the Euro (EUR). Japan’s Finance Minister Satsuki Katayama said on Friday that the government is pursuing measures that would include the Government Pension Investment Fund (GPIF) to make "substantially greater investments in Japanese financial assets. Analysts said this move could offer greater support to the battered currency than intervention.
Technical Analysis:
In the daily chart, EUR/JPY keeps a mildly bearish near-term tone as spot holds beneath the 100-day Simple Moving Average (SMA) and the Bollinger Bands’ 20-day middle line. The pair is drifting in the lower half of the recent volatility envelope, with the lower Bollinger band acting as the next downside reference, while the Relative Strength Index (RSI) at 47.6 hovers just under the neutral 50 line, hinting at subdued, consolidative downside pressure rather than a strong trend.
On the topside, initial resistance emerges in the 184.80-184.85 zone, representing the Bollinger 20-day middle band and the 100-day SMA. A daily close above this clustered band would be needed to ease the current downside bias and expose the upper Bollinger band near 186.12. On the downside, the first notable support is the lower Bollinger band at 183.53, where buyers could attempt to slow the decline; a break below this level would reinforce the bearish bias and open the door to a deeper corrective slide.
(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.
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