Forex News
HSBC’s FX Viewpoint highlights that the US Dollar sits at a crossroads, driven by Middle East tensions, US trade policy shifts and the upcoming June Federal Open Market Committee (FOMC) under new Fed Chair Kevin Warsh. The bank expects a softer broad USD over the longer term but warns that any renewed Fed hike signals could support the Dollar.
Dollar outlook tied to Fed and geopolitics
"Developments in the Middle East remain a key market focus. So far, periods of escalating tension have generally been associated with higher oil prices and a firmer US dollar, while any easing has tended to produce the opposite effect. At present, there is no clear assurance of a quick resolution, and ongoing supply disruptions across key commodities continue to weigh on sentiment."
"US trade policy is once more on the market’s radar following the 2 June announcement from the Office of the United States Trade Representative (USTR). The proposal outlines tariffs of 10-12.5% on imports from 60 economies under investigation for the alleged use of forced labour in relation to import controls. The plan includes exemptions, notably for United States-Mexico-Canada Agreement (USMCA)-compliant goods and further carve-outs may be introduced after the public consultation closes on 7 July."
"With the 16-17 June Federal Open Market Committee (FOMC) meeting approaching, attention is increasingly turning to how the new Chair of the Federal Reserve (Fed), Kevin Warsh, frames the policy outlook. Markets are becoming more sensitive to the risk of a more hawkish Fed, particularly given the recent run of upside surprises in US activity data. Any meaningful shift in the Fed’s tone would likely have direct implications for the USD."
"The last comparable episode of rapid hawkish repricing in Fed expectations − late 2024 – was accompanied by broad-based US dollar strength."
"Our base case remains that it would be surprising for the Fed to signal that it is preparing to raise interest rates, and we continue to anticipate a softer broad USDover the longer term. That being said, any indication that rate hikes are back on the table would likely warrant a more positive USD view. As such, we are approaching a critical juncture."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Silver prices (XAG/USD) fell on Monday, according to FXStreet data. Silver trades at $67.02 per troy ounce, down 1.21% from the $67.84 it cost on Friday.
Silver prices have decreased by 5.72% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 67.02 |
1 Gram | 2.15 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 64.01 on Monday, up from 63.82 on Friday.
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.
(An automation tool was used in creating this post.)
BNY’s Bob Savage notes that an European Central Bank (ECB) rate hike is widely expected, but guidance on future moves and growth risks will be crucial for EUR/USD. The bank argues the Governing Council is unlikely to commit to a prolonged tightening cycle, with the Euro already trading near ECB projections and a modestly weaker Euro (EUR) potentially desirable for exporters.
ECB guidance to shape Euro path
"An ECB hike on Thursday is considered a foregone conclusion but uncertainty remains regarding what happens next."
"For now, we believe the “don’t forget growth” message is strong enough (at least behind closed doors) such that the Governing Council will not be able to commit to a prolonged cycle, and that would already risk some downside risk in the euro: any increase in exposures which solely responded to the wide gap between ECB expectations versus peers would require some moderation."
"Compared to 2025, we note that the ECB is no longer playing “catch-up” to the EUR’s performance, as the currency is now trading around the levels anticipated in its past three Staff Projections."
"This means negligible impact either way, and the ECB should note that the recent surge in hawkish pricing has not supported the currency, both in terms of levels and also positioning – the currency remains underheld in iFlow."
"If anything, a modestly weaker EUR is probably desirable to help exporters."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Danske Research Team notes that Brent Oil has surged toward USD 96 per barrel after renewed Israel–Iran hostilities, with markets reassessing regional supply risks. They highlight that the latest air strikes have undermined hopes for a broader deal to reopen the Strait of Hormuz. Oil’s move is also framed against broader risk sentiment and upcoming United States (US) Consumer Price Index (CPI) and European Central Bank (ECB) events.
Brent spikes as Middle East tensions rise
"On the Iran war, Israel carried out overnight air strikes inside Iran after Tehran fired ballistic missiles at northern Israel on Sunday, the first such exchange since the April ceasefire. Iran's attack followed Israeli strikes on Beirut earlier in the day."
"US President Donald Trump said he had told Israel not to respond militarily and insisted the flare-up would not derail a potential US-Iran agreement."
"The escalation hit oil markets this morning, with Brent crude up about 3% to around USD 96/bbl, as hopes fade for a broader regional deal to reopen the Strait of Hormuz."
"Oil jumped overnight, with Brent at USD 96.5/bbl as the situation in the Middle East escalated with new air strikes between Israel and Iran."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Brown Brothers Harriman’s Elias Haddad (BBH) expects the Bank of Canada to keep its policy rate at 2.25% and maintain two-way optionality, as contained inflation allows an extended pause. While swaps price more than 50 bps of hikes, the bank sees scope for these bets to be pared back, highlighting upside levels in USD/CAD if resistance breaks.
BOC pause contrasts with market pricing
"The Bank of Canada (BoC) is widely expected to keep the policy rate on hold at 2.25% for a fifth straight meeting (Wednesday)."
"BoC is also poised to stick to its two-way policy optionality introduced in April that new US trade restrictions on Canada would argue for cuts, but persistently high energy prices could warrant “consecutive increases in the policy rate.”"
"The swaps curve more than fully price-in 50bps of rate hikes over the next twelve months. "
"There is room for BoC rate hikes bets to adjust lower against CAD. USD/CAD immediate resistance is offered at 1.3967 (March 31 high). If this level gives way, the next target is the November 2025 high around 1.4140."
"In our view, Canada’s contained inflation backdrop gives the BoC scope to keep rates on hold for an extended period and assess whether the rebound in May employment and April real GDP is sustained."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/CAD holds gains as the Canadian Dollar weakens despite higher oil prices.
- WTI price rises as Middle East tensions escalated following retaliatory strikes between Israel and Iran.
- Eurozone Sentix Investor Confidence improved to -13.4 in June from May's -16.4.
EUR/CAD inches higher after registering over 0.5% losses in the previous day, trading around 1.6070 during the European hours on Monday. The currency cross gains some ground as the commodity-linked Canadian Dollar (CAD) struggles despite higher oil prices.
WTI price rose due to renewed Middle East tensions after Israel and Iran exchanged strikes. The Guardian reported that air raid sirens sounded in Tel Aviv, following the attack from Yemen. The retaliatory attacks from Yemen, whose military force, the Houthis, is backed by Iran, reflect that conflicts in the Middle East have started again.
Earlier, the BBC reported that the Israel Defense Forces (IDF) reportedly struck military targets in Iran following an Iranian missile salvo aimed at northern Israel. This escalation occurred despite US President Donald Trump's criticism of previous Israeli strikes in Beirut and his active push for a diplomatic resolution between Prime Minister Netanyahu and Tehran.
The downside of the Canadian Dollar (CAD) could be restrained due to stronger-than-expected domestic employment data. In May, Canada’s economy added 88,000 jobs, significantly exceeding economic forecasts. This robust labor market performance has reinforced expectations that the Bank of Canada (BoC) may keep interest rates elevated for a longer period than previously anticipated.
On the data front, the Eurozone’s Sentix Investor Confidence data, a key indicator of Investor morale, improves to -13.4 in June from -16.4 in May. Germany’s Factory Orders dropped by 3.8% in April after rising by a revised 4.5% in March. Data missed the estimated 1.2% decrease. On an annual basis, orders increased by 1.6% year-over-year (YoY) in April, as against the previous rise of 4.5% (revised from 5.0%).
Commerzbank’s Rainer Guntermann says a 25-basis-point hike by the European Central Bank (ECB) on Thursday is almost certain and fully priced, marking the first increase since September 2023. He expects no back-to-back move in July, viewing that as premature, but looks for another hike in September. Lower Oil prices should then ease inflation, preventing restrictive policy and opening scope for rate cuts in 2027.
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.
UOB’s Quek Ser Leang and Lee Sue Ann flag that AUD/USD posted its second-largest one‑day loss of the year, dropping toward 0.7040. Near term, the pair may test 0.7020, though a sustained break below is seen as unlikely. Over a 1–3 week horizon, they expect further weakness toward 0.7000, while resistance is now around 0.7080/0.7105.
Australian Dollar under sustained pressure
"24-HOUR VIEW: After our expectation for AUD to test 0.7120 did not materialise on Thursday, we highlighted the following on Friday: “AUD did not quite test 0.7120, as it dipped to 0.7123, rebounded to 0.7148 before closing little changed at 0.7133 (+0.08%). Despite the relatively quiet price action, lingering downward momentum suggests AUD could test and potentially break below 0.7120. Resistance is at 0.7140 and 0.7150.” Our view of a lower AUD was not wrong, as after it rose to 0.7144, it then staged a dramatic decline that reached a low of 0.7038. The outsized drop appears excessive, but there is a chance for AUD to test 0.7020. A sustained drop below this level is unlikely, and the next support at 0.7000 is also unlikely to come into view. Resistance is at 0.7060, followed by 0.7080."
"1-3 WEEKS VIEW: Our most recent narrative was from last Thursday (04 Jun, spot at 0.7135), when we highlighted that “there has been a tentative increase in downward momentum, and if AUD breaks and holds below 0.7120, it could lead to a drop to 0.7095.” While our view of a weaker AUD was correct, we did not anticipate the steep sell-off on Friday that reached a low of 0.7038. AUD closed at 0.7043, down by a whopping 1.27%. The price action suggests that AUD could weaken to 0.7000. We will maintain this view as long as 0.7105 (‘strong resistance’ level was at 0.7165 last Friday) is not breached."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- The Euro hovers right above 1.1500, consolidating losses after a 0.75% sell-off on Friday.
- Eurozone Sentix Confidence Index and German Factory Orders depict a grim economic outlook.
- Growing tensions in the Middle East have boosted Oil prices, adding pressure on the common currency.
The Euro (EUR) consolidates losses against the US Dollar (USD) on Monday, trading at 1.1515 at the time of writing, following a 0.75% sell-off on Friday. A mix of higher Oil prices, as tensions in the Middle East simmer, growing hopes of Federal Reserve (Fed) rate hikes, and downbeat Eurozone data has created a perfect storm for the common currency at the week's opening.
The Eurozone Sentix Investors’ Confidence Index improved to -13.4 in June from -16.4 in May, but remains at deeply negative levels, hinting at a dismal investors' mood and below the levels around zero, seen before the US-Israel attack on Iran and the ensuing blockade of the Strait of Hormuz.
Earlier on the day, German Industrial Orders dropped 3.8% in April, more than three times the 1.2% drop anticipated by the market consensus. Beyond that, March figures have been revised down to a 4.5% increase from the previous 5.0% estimate.
Higher Oil prices add pressure on the Euro
In the geopolitical domain, Iran-backed Houthi Militias confirmed attacks on Israel, after Tel Aviv announced that they targeted military sites in Iran, in retaliation for a new barrage of missiles launched towards northern Israel. Iranian authorities have threatened US bases in Gulf countries in the most serious escalation of the hostilities since Washington and Tehran signed a fragile ceasefire in mid-April.
The escalating tensions have sent Oil prices nearly $5 higher, as the barrel of Brent Crude rises to $96.37 at the time of writing, from Friday’s close of $92. These prices pose significant pressure on oil-importing Eurozone economies and weigh heavily on speculative demand for the Euro.
On Friday, the US Labour Statistics Office revealed that Nonfarm Payrolls rose by 172K in May, beating expectations of an 85K rise, while April’s figures were upwardly revised to 179K from previous estimates of a 115K increase. These numbers confirm that employment creation is gathering pace in the US in 2026, after a weak 2025 year, and boost hopes that the Federal Reserve will tighten its monetary policy later this year, which has sent the US Dollar higher across the board.
Economic Indicator
Sentix Investor Confidence
With among 1600 financial analysts and institutional investors, the Sentix Investor Confidence is a monthly survey which shows the market opinion about the current economic situation and the expectations for the next semester. The index, released by the Sentix GmbH, is composed by 36 different indicators. Usually, a higher reading is seen as positive for the Eurozone, that means positive, or bullish, for the Euro, While a lower number is seen negative or bearish for the unique currency.
Read more.Last release: Mon Jun 08, 2026 08:30
Frequency: Monthly
Actual: -13.4
Consensus: -
Previous: -16.4
Source: Sentix
Economic Indicator
Factory Orders s.a. (MoM)
The Factory orders released by the Deutsche Bundesbank is an indicator that includes shipments, inventories, and new and unfilled orders. An increase in the factory order total may indicate an expansion in the German economy and could be an inflationary factor. It is worth noting that the German Factory barely influences, either positively or negatively, the total Eurozone GDP. A high reading is positive (or bullish) for the EUR, while a low reading is negative.
Read more.Last release: Mon Jun 08, 2026 06:00
Frequency: Monthly
Actual: -3.8%
Consensus: -1.2%
Previous: 5%
Source: Federal Statistics Office of Germany
Societe Generale analysts say USD/JPY has rebounded after defending a multi‑month ascending trend line around 155.50/155.00 and is now challenging the April high. Support is seen at 159.20, with projections at 161.20 and 162. They add that a widening 2‑year UST/JGB spread above 270bp keeps USD/JPY on an upward trajectory despite potential BoJ tightening.
BoJ hike unlikely to cap rally
"USD/JPY defended the multi-month ascending trend line around 155.50/155 resulting in a steady rebound. It is now challenging the April high."
"A brief pullback cannot be ruled out; however, the last week’s low around 159.20 could be first layer of support. Defence of this may lead to persistence in uptrend. The pair may gradually head towards next projections at 161.20 and the peak of 2024 at 162."
"Spot bid above 160, 2y UST/JGB out to 277bp. Support 159.20, resistance 161.20."
"The 2y UST/JGB accelerated above 270bp after NFP, keeping USD/JPY on an upward trajectory. The central bank/MoF must now follow up verbal intervention with action at a high cost and pickings are slim as dollar sales over the past month have demonstrated."
"The BoJ will in all likelihood also raise rates by 25bp to 1.0% next week, the lower end of the neutral range, but is confronted by a currency battle it can’t win if the market view is for higher Fed funds rate."
"Pension fund proxies bought record ¥3.16tn ($19.7bn) foreign bonds in May. 1Q GDP revised down to 1.8% ann."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
According to the Fars news agency, Iran’s Revolutionary Guards Corps (IRGC) has confirmed attacking a petrochemical site in northern Israeli city of Haifa, in retaliation for Israel’s attack on a similar plant in Iran, The Guardian reported.
“We warn you; by taking action against civilian targets and targeting oil industries, the Zionist enemy has started a dangerous game, the scope of which will encompass all energy targets in the region, and its consequences for the global economy are the responsibility of the main arsonist in this field, the United States,” the IRGC said.
Market reaction
No responsive action seen in the Oil price, following IRGC's retaliation against Israel's attacks on Iranian petrochemical site. Still, the WTI Oil price trades 4.76% higher to near $92.80 as of writing.
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.
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