Forex News
Commerzbank’s Dr. Ralph Solveen notes that Eurozone inflation fell to 2.8% in June, mainly on lower energy prices, while core inflation eased to 2.4%. The bank expects overall inflation to stay close to 3% in coming months. With firms likely to pass on still-elevated energy costs, Commerzbank anticipates another ECB rate hike in September.
Inflation easing but still elevated
"In the coming months, the inflation rate is likely to remain close to 3%, to which the ECB would probably respond with another interest rate hike at its September meeting."
"We expect the inflation rate to remain close to 3% in the second half of this year as well."
"Although energy prices are likely to fall slightly, companies are expected to increasingly pass on their energy costs – which remain higher than they were before the start of the Iran war – to their customers, meaning that the indirect effects feared by the ECB will intensify for the time being."
"The central bank is likely to respond to this with another interest rate hike in September."
"However, this should likely be viewed more as a counter-movement to the sharp increase in the previous month rather than as a sign of a sustained reduction in underlying price pressures."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Gold rebounds above the $4,000 mark as the US Dollar eases on Fed Chair Warsh's remarks.
- ADP private payrolls miss forecasts ahead of Thursday's Nonfarm Payrolls report.
- Technical indicators point to persistent downside momentum despite oversold conditions.
Gold (XAU/USD) advances above the $4,000 psychological mark on Wednesday as the US Dollar (USD) eases following remarks from Federal Reserve (Fed) Chair Kevin Warsh and softer-than-expected US economic data.
However, hawkish Fed expectations keep the upside limited, with traders still pricing in the possibility of a rate hike later this year. At the time of writing, XAU/USD is trading around $4,097, recovering from the seven-month low of $3,941 touched on Tuesday.
Speaking at the ECB Forum in Sintra on Wednesday, Warsh said, "We're not going to give forward guidance," adding, "We'll chart a new course so we can make better decisions." He also noted that "inflation risks have come down."
On the data front, ADP Employment Change showed that private payrolls increased by 98K in June, below the market expectation of 113k and down from the 122K increase recorded in May. The ISM Manufacturing Purchasing Managers Index (PMI) eased to 53.3 in June from 54.0 in May, missing market forecasts of 54.0.
Traders now await the US Nonfarm Payrolls (NFP) report, due on Thursday.
Gold's glitter has faded over the past few months, posting its steepest quarterly decline since 2013 on Tuesday. The precious metal is now trading around 28% below its all-time high near $5,600 set in January.
The correction follows a powerful two-year rally, including a 67% gain in 2025, driven by strong central bank buying, robust ETF inflows, geopolitical tensions and Fed interest rate cuts.
However, in 2026, the bull run appears to have stalled, with the primary driver of the sell-off being a sharp shift in interest rate expectations. Earlier this year, traders were pricing in at least two Fed rate cuts before the US-Iran war triggered an energy-driven inflation shock, pushing US inflation to more than double the Fed's 2% target.
That forced traders to reassess the Fed's monetary policy outlook, with markets currently pricing in a 67% probability of a rate hike at the September meeting, according to the CME FedWatch Tool.
As a non-yielding asset, Gold tends to perform well in a low-interest-rate environment because lower borrowing costs reduce the opportunity cost of holding the precious metal.
Meanwhile, weak physical demand from India, one of the world's largest Gold consumers, is also weighing on prices. According to the India Bullion & Jewellers Association (IBJA), Indian households sold nearly 50 tonnes of old Gold during the April-June quarter, a 43% increase from a year earlier, as consumers locked in profits at elevated prices. Demand has also been pressured by the Indian government's decision to raise the customs duty on Gold from 6% to 15% in May.
On the geopolitical front, progress toward a final US-Iran peace agreement remains slow. Although US and Iranian envoys have arrived in Doha, Qatar, no direct talks between the two sides are scheduled.
Technical Analysis: XAU/USD risks deeper losses below $4,000 support
On the daily chart, the metal holds below the 20-day Simple Moving Average from the Bollinger Bands at around $4,184, keeping the near-term tone mildly bearish, while the price still trades comfortably above the lower band at about $3,926.
The Relative Strength Index (RSI) near 40 and a negative Moving Average Convergence Divergence (MACD) both suggest subdued upside momentum, reinforcing the idea that rallies are likely to face selling pressure rather than mark a sustained trend reversal.
On the topside, initial resistance emerges at the Bollinger midline near $4,184.59, with the next cap at the horizontal barrier around $4,300, ahead of the upper Bollinger band clustered near $4,442.
On the downside, immediate support is seen at the lower Bollinger band around $3,926, with a more significant floor at the previously drawn horizontal level near $3,800.00, where buyers would be expected to defend the broader uptrend if the current pullback deepens.
(The technical analysis of this story was written with the help of an AI tool.)
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.
TD Securities’ Ryan McKay and Bart Melek note that Copper remains under pressure as the missed June 30 Section 232 tariff update removes a near-term supply risk and weakens short-term momentum. CTAs have already cut around 13% of historic net length, while ongoing tariff and inventory fragmentation risks support Copper but a softer demand backdrop limits upside.
Tariff delay shifts CTA positioning
"Copper and aluminum are in the crosshairs for CTAs today. Lack of an update on copper tariffs has removed a near-term supply risk, opening the red metal up to further selling, while a continuation of the Hormuz trade unwind weighs heavy on aluminum."
"The June 30th deadline for recommendations on refined copper tariffs under Section 232 came and went without any official update from President Trump."
"For flat prices however, short-term momentum is weaker again with the immediate supply risk event in the rearview mirror, prompting CTAs to once again liquidate some 13% of their historic net length."
"Looking forward, the continued risk of tariffs and inventory fragmentation will support the red metal, but a weakening short-term demand backdrop is likely to also cap any material upside."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- The US ISM Manufacturing PMI lost traction in June.
- The US Dollar adds to Tuesday’s uptick beyond 101.00.
The Institute for Supply Management’s (ISM) data showed the Manufacturing PMI edging lower to 53.3 in June, down from May's print and analysts’ expectations of 54.
Meanwhile, the Prices Paid Index, which tracks inflation in the sector, fell to 73 from 82.1. The Employment Index strengthened a tad to 49.7 from 48.6, and the New Orders Index deflated to 56 from 56.8.
Market reaction
The Greenback extends its upward bias on Wednesday, motivating the US Dollar Index (DXY) to maintain the trade well above the 101.00 barrier while flirting with multi-day highs.
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 Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.24% | -0.01% | -0.10% | 0.09% | 0.23% | -0.02% | 0.11% | |
| EUR | -0.24% | -0.25% | -0.31% | -0.14% | 0.00% | -0.30% | -0.11% | |
| GBP | 0.01% | 0.25% | -0.06% | 0.11% | 0.23% | -0.03% | 0.16% | |
| JPY | 0.10% | 0.31% | 0.06% | 0.16% | 0.32% | 0.02% | 0.20% | |
| CAD | -0.09% | 0.14% | -0.11% | -0.16% | 0.15% | -0.15% | 0.04% | |
| AUD | -0.23% | -0.00% | -0.23% | -0.32% | -0.15% | -0.29% | -0.11% | |
| NZD | 0.02% | 0.30% | 0.03% | -0.02% | 0.15% | 0.29% | 0.18% | |
| CHF | -0.11% | 0.11% | -0.16% | -0.20% | -0.04% | 0.11% | -0.18% |
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).
This section below was published as a preview of the US ISM Manufacturing report for June at 08:00 GMT.
- The US ISM Manufacturing PMI is seen unchanged at 54 in June.
- Investors will also follow the ISM Prices index and the Employment index.
- EUR/USD seems to have met some resistance ahead of 1.1450.
Attention shifts to Wednesday’s release of the June ISM Manufacturing Purchasing Managers Index (PMI), one of the most closely followed indicators of activity in the US manufacturing sector and an important barometer of the broader economy.
Markets expect the headline index to remain unchanged at 54, matching May’s print. That would be the sixth consecutive month with the index above the key 50.0 level that separates expansion from contraction, suggesting manufacturing activity continues to expand despite ongoing challenges.
But the story of the manufacturing sector is only part of the story. The broader US economy has continued to prove impressively resilient thanks to better-than-expected growth and a labour market that has largely held firm despite high interest rates. That resilience has kept the narrative of US exceptionalism alive, even as factory activity remains muted.
But it will be more than just the headline figure that matters for investors. Signs of improving demand, new orders or employment could raise confidence that manufacturing is slowly stabilising, while another disappointing report would add to concerns that the sector is struggling to gain meaningful traction despite the economy's broader strength.
What to expect from the ISM Manufacturing PMI report?
The manufacturing sector advanced to levels last seen nearly two years ago in May, with the business activity managing to stay in the expansion territory for the fifth consecutive month, extending the auspicious start to the year.
The biggest jump was in new orders, with the related index climbing to 56.8, its highest in the past four months, suggesting demand remained solid. At the same time, price pressures eased as the Prices Paid Index fell to 82.1 from 84.5, showing that inflationary pressures in the manufacturing sector appear to be slowly cooling. The picture in the labour market has also improved after the Employment Index rose to 48.6 from 46.4 in the prior month, but it still remained well short of the 50.0 mark, signalling that hiring conditions are still tough.
A reading above 50.0 on the ISM Manufacturing PMI is generally considered a sign of expansion in factory activity, with a reading below that point indicating contraction. However, history suggests that sustained levels above 42.5 are still generally consistent with growth in the overall US economy.
A stronger-than-expected PMI would likely boost confidence in the resilience of the US economy for markets and underpin equities and broader risk sentiment.
But the implications for the US Dollar are less straightforward. A stronger report could also stoke expectations that the Federal Reserve (Fed) will hold interest rates at restrictive levels for longer, providing more support for the currency. A stronger report tends to favour the Greenback. On the flip side, a softer-than-expected reading could raise concerns about the manufacturing outlook and dampen sentiment.
When will the ISM Manufacturing PMI report be released, and how could it affect EUR/USD?
The ISM Manufacturing PMI report is scheduled for release at 14:00 GMT on Wednesday.
Prior to the data release, EUR/USD has managed to extend its rebound from last week’s multi-month troughs, although extra gains seem to have met a tough barrier ahead of the 1.1450 level.
Pablo Piovano, Senior Analyst at FXStreet, explains that further advances need to initially clear 1.1450 to attempt a move toward the weekly peak at 1.1622 (June 15). Immediately to the upside comes the critical 200-day SMA at 1.1657, preceding the weekly high at 1.1685 (May 29).
Piovano also noted that on the downside, the pair faces initial contention at the 2026 bottom of 1.1324 (June 24). A breach below this level could spark a likely challenge to the 1.1300 round level, ahead of the weekly floor at 1.1210 (May 29, 2025).
Piovano added that the outlook remains tilted to further weakness as long as spot trades below its 200-day SMA.
He also pointed out that the Relative Strength Index (RSI) hovers around 37, indicating a pick-up in the bearish stance, while the Average Directional Index (ADX) around 36 suggests that the current trend is quite firm.
Economic Indicator
ISM Manufacturing PMI
The Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US manufacturing sector. The indicator is obtained from a survey of manufacturing supply executives based on information they have collected within their respective organizations. Survey responses reflect the change, if any, in the current month compared to the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the US Dollar (USD). A reading below 50 signals that factory activity is generally declining, which is seen as bearish for USD.
Read more.Next release: Wed Jul 01, 2026 14:00
Frequency: Monthly
Consensus: 54
Previous: 54
Source: Institute for Supply Management
The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers Index (PMI) provides a reliable outlook on the state of the US manufacturing sector. A reading above 50 suggests that the business activity expanded during the survey period and vice versa. PMIs are considered to be leading indicators and could signal a shift in the economic cycle. Stronger-than-expected prints usually have a positive impact on the USD. In addition to the headline PMI, the Employment Index and the Prices Paid Index numbers are watched closely as they shine a light on the labour market and inflation.
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
- USD/CHF trims gains as Fed Chair Warsh's remarks weigh modestly on the US Dollar.
- Fed rate hike bets and slow progress in US-Iran peace talks limit the Greenback's downside.
- Swiss Retail Sales beat forecasts, while focus shifts to Swiss CPI and US jobs data.
USD/CHF trims gains on Wednesday as remarks from Federal Reserve (Fed) Chair Kevin Warsh weigh modestly on the US Dollar (USD). However, expectations for a Fed rate hike and a lack of clarity surrounding US-Iran negotiations keep the Greenback's downside contained.
At the time of writing, the pair is trading around 0.8086, retreating from an intraday high of 0.8117.
Speaking at the ECB Forum in Sintra on Wednesday, Fed Chair Kevin Warsh said, "We're not going to give forward guidance," adding, "We'll chart a new course so we can make better decisions." Wrash also noted that "inflation risks have come down."
The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, is trading around 101.27, just below the more than one-year high of 101.80 touched last week.
The United States and Iran reached a 60-day Memorandum of Understanding (MoU) last month, but progress toward a final peace agreement remains slow. Although US and Iranian envoys have arrived in Doha, Qatar, no direct talks between the two sides are currently scheduled.
On the monetary policy front, traders expect that the Fed could raise interest rates as soon as September, with markets pricing in a 67% probability of a rate hike, according to the CME FedWatch Tool.
Rate hike expectations gained traction after the economic fallout from the US-Iran war pushed US Consumer Price Index (CPI) inflation to 4.2% in May, more than double the Fed's 2% target. While Oil prices have retraced to pre-war levels, markets continue to expect tighter monetary policy after Fed Chair Warsh emphasized the need to restore price stability.
On the data front, the ADP Employment Change report showed that private payrolls increased by 98K in June, below market expectations of 113K and down from the 122K increase recorded in May. Traders now await the ISM Manufacturing Purchasing Managers Index (PMI) later in the American session, followed by Thursday's US Nonfarm Payrolls (NFP) report for further clues on the Fed's policy outlook.
Meanwhile, Switzerland's Retail Sales rose 3.5% YoY in May, accelerating from 1.7% in April and beating market expectations of 0.8%. Traders now look ahead to the Swiss CPI and the Swiss National Bank's (SNB) Financial Stability Report, due on Thursday.
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.
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