Forex News
The People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead on Thursday at 6.7909 compared to the previous day's fix of 6.7910 and 6.7577 Reuters estimate.
PBOC FAQs
The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.
The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.
Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.
Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.
- AUD/USD struggles as the Australian Dollar remains weaker following the release of the Consumer Inflation Expectations.
- US strikes on Iranian assets and a new naval blockade have triggered a massive surge in safe-haven asset demand.
- Fed Chair Kevin Warsh called current inflation temporary on Wednesday.
AUD/USD loses ground after two days of gains, trading around 0.7000 during the Asian hours on Thursday. The pair remains in negative territory as the Australian Dollar (AUD) holds losses following the release of the Consumer Inflation Expectations, which fell by 0.8% in July to 4.7%, from 5.5% prior.
Following the spike in trimmed mean inflation expectations recorded in April, inflation expectations have moderated for a third month running. Wage expectations, by comparison, have remained unchanged for the past eight months.
The AUD/USD pair depreciates as the safe-haven demand surges in response to aggressive US military actions. The US has launched multiple waves of strikes against Iranian coastal military assets and reinstated a naval blockade of Iran.
The Guardian reported that US Central Command (CENTCOM) launched yet another wave of strikes in a concerted effort to keep the critical Strait of Hormuz waterway open. In a direct escalation, CENTCOM confirmed that US aircraft fired missiles into an oil tanker’s smokestack within the strategic passage, effectively disabling the vessel and keeping global markets on edge.
Unpredictability surrounding the conflict heightened after US President Donald Trump stated to reporters that he "does not like giving deadlines" when questioned on whether Iran faces a strict timeline before the US begins targeting domestic infrastructure, such as Iranian bridges.
Federal Reserve (Fed) Chair Kevin Warsh said on Wednesday that current inflation pressure will not be permanent, while acknowledging that the latest inflation measures remain unsatisfactory.
Warsh downplays inflation signal from AI, keeps Fed tone steady for Dollar
Fed Chair Warsh’s testimony scores 5.4/10 on the FXS Speechtracker, notably softer relative to the historical average of 7/10 and signaling a more cautious, nuanced tone. By calling recent inflation data an “imperfect gauge” of underlying pressures and framing AI as a source of both disruption and long-run job and wage gains, Warsh emphasizes uncertainty around the inflation path while stressing that whether AI proves inflationary ultimately depends on Fed policy. The net effect is a balanced message that tempers hawkish conviction, limiting immediate implications for the Dollar and broader risk sentiment.
The FXS Fed Sentiment Index was unchanged, moving 0.00 points to remain at a firmly hawkish 126.13, indicating that despite the softer speech score, the broader policy backdrop still leans toward a tightening bias. The combination of a steady FXS Fed Sentiment Index and a below-baseline FXS Speechtracker reading suggests markets will see Warsh’s AI remarks as a refinement of the inflation narrative rather than a shift away from the existing hawkish stance.
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
- NZD/USD falls sharply as investors fled to the US dollar amid rising geopolitical tensions.
- The RBNZ warned that sticky inflation, driven by Middle East supply shocks, could trigger higher interest rates.
- Disappointing data showed China, New Zealand's top trading partner, growing at its slowest pace in years.
NZD/USD inches lower after two days of gains, trading around 0.5840 during the Asian hours on Thursday. Traders are adopting a highly cautious stance ahead of Friday’s looming June food inflation data, which follows a sharp acceleration in figures back in May. This anxiety is being compounded by escalating conflict in the Middle East and climbing oil prices, both of which are intensifying global inflation fears and fueling expectations of further interest rate hikes.
The cautious mood was reinforced on Tuesday by Reserve Bank of New Zealand (RBNZ) Chief Economist Paul Conway, who warned that sticky inflation, aggravated by recent Middle East supply shocks, could prompt additional rate hikes. Meanwhile, disappointing data from China, New Zealand's top trading partner, revealed that the Chinese economy grew at its slowest pace in three and a half years, further dampening investor sentiment.
In the currency markets, the NZD/USD pair has lost significant ground as safe-haven demand surges in response to aggressive US military actions. The US has launched multiple waves of strikes against Iranian coastal military assets and reinstated a naval blockade of Iran. Unpredictability surrounding the conflict heightened after US President Donald Trump stated to reporters that he "does not like giving deadlines" when questioned on whether Iran faces a strict timeline before the US begins targeting domestic infrastructure, such as Iranian bridges.
The geopolitical situation worsened on Wednesday, with The Guardian reporting that US Central Command (CENTCOM) launched yet another wave of strikes in a concerted effort to keep the critical Strait of Hormuz waterway open. In a direct escalation, CENTCOM confirmed that US aircraft fired missiles into an oil tanker’s smokestack within the strategic passage, effectively disabling the vessel and keeping global markets on edge.
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
- WTI price gains ground to near $79.50 in Thursday’s early Asian session.
- US military carried out another round of strikes against Iran.
- US crude inventories fell 1.7 million barrels last week, said EIA.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $79.50 during the early Asian trading hours on Thursday. The WTI edges higher to near a one-month high after the US launched multiple waves of strikes on Iranian coastal military assets and reinstated a naval blockade of Iran.
The Guardian reported on Wednesday that the US Central Command (CENTCOM) said that it has launched another wave of strikes against Iran in a further effort to keep the Strait of Hormuz open. CENTCOM said US aircraft fired missiles into an oil tanker’s smokestack in the critical waterway, disabling the vessel.
US President Donald Trump said that he does not like giving deadlines when asked by reporters if Iran has a deadline before the US starts attacking Iranian bridges. The escalation in the conflict revives concerns over oil supply disruption, boosting the WTI price.
US crude oil inventories fell last week as exports picked up from the week before and refineries raised their capacity use. According to the US Energy Information Administration (EIA), crude oil stockpiles in the US for the week ending July 10 declined by 1.693 million barrels, compared to a fall of 2.998 million barrels in the previous week. The market consensus was for a decrease of 2.6 million barrels.
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.
United Overseas Bank’s Quek Ser Leang and Lee Sue Ann highlight a sharp USD/CNH drop to 6.7691, shifting the short-term bias to the downside. They see scope for further weakness, though the 6.7600 support is unlikely to be reached immediately. Over 1-3 weeks, the pair is expected to trade with a downside bias toward 6.7600, while a move above 6.7860 would negate the bearish momentum.
Offshore Yuan strengthens as Dollar slips
"24-HOUR VIEW: We did not expect USD to drop sharply to 6.7691 (we had expected range-trading). The rapid increase in momentum suggests further USD weakness, even though the major support at 6.7600 is likely out of reach (there is another support level at 6.7660). On the upside, a breach of 6.7800 (minor resistance is at 6.7760) would indicate that the decline is stabilising."
"1-3 WEEKS VIEW: In our most recent narrative from last Friday (10 Jul, spot at 6.7930), we highlighted that “for the time being, we expect USD to trade in a range, most likely between 6.7700 and 6.8100.” Yesterday, USD broke below 6.7700 with a low of 6.7691. Downward momentum is increasing, and from here, USD is likely to trade with a downside bias toward 6.7600. To keep the momentum going, USD must not break above 6.7860 (‘strong resistance’ level)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Commerzbank’s Moses Lim highlights that USD/SGD fell 0.3% to 1.2910 on Dollar weakness, with the pair consolidating in a 1.29–1.30 range since mid-June. Singapore’s strong growth backdrop and benign inflation support the Singapore Dollar, which is the third-strongest Asian currency this year. The Monetary Authority of Singapore could consider tightening policy if inflation pressures rise.
Singapore Dollar holds firm in range
"Advance Q2 GDP grew faster than expected at 5.7% yoy (Bloomberg consensus: 5.5%) vs 6.3% in Q1, which was revised up from 6.0% previously. This implies growth of around 6.0% in H1 2026, above the government’s full-year forecast range of 2-4%. As such, the government may revise its 2026 growth forecast higher when the final Q2 GDP data is released in August."
"The economy should remain resilient through the rest of the year, supported by the ongoing semiconductor upcycle. Renewed Middle East tensions pose downside risks via higher commodity prices and weaker external demand, but resilient domestic consumption and AI-driven export growth should help cushion the impact."
"Attention now turns to the June CPI release on 23 July. Inflation remained benign at 1.8% yoy in May, although risks are tilted to the upside if supply bottlenecks and higher crude prices persist. Given the resilient growth backdrop, MAS could consider tightening policy if inflationary pressures pick up in June."
"In FX, USD-SGD fell 0.3% to 1.2910 yesterday, driven by a weaker USD. The pair has consolidated around the 1.29-1.30 range since mid-June and could remain within this range in the near term."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The US Central Command (CENTCOM) said that it has launched another wave of strikes against Iran in a further effort to keep the Strait of Hormuz open, the Guardian reported on Wednesday.
The US military also said US aircraft fired missiles into an oil tanker’s smokestack in the critical waterway, disabling the vessel. US President Donald Trump said that he does not like giving deadlines when asked by reporters if Iran has a deadline before the US starts attacking Iranian bridges.
Explosions were reported late on Wednesday on Iran’s Qeshm Island, Bandar Abbas, and locations in the Sistan-Baluchestan province.
Earlier Thursday, Iran activated air defence in Tehran to counter 'hostile threats,' per the Mehr news agency. Iran’s top negotiator and parliamentary speaker Mohammed Bagher Ghalibaf said that the country has “never welcomed war, nor do we now," adding that “we must always be prepared for battle and stand firm to protect our national security and interests."
Iran’s Islamic Revolutionary Guard Corps (IRGC) stated that it attacked US military assets in Bahrain, Kuwait, and Jordan and claimed heavy damage on the US Fifth Fleet headquarters. The Iranian military said a missile and drone strike hit early-warning radar at Ali Al Salem air base in Kuwait.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is up 0.55% on the day at $79.60.
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 price recovers to near $4,060 in Thursday’s early Asian session.
- The US PPI unexpectedly fell in June.
- The US military carried out another wave of strikes.
Gold price (XAU/USD) edges higher to around $4,060 during the early Asian session on Thursday. The precious metal rebounds as softer US inflation has fueled hopes that the US Federal Reserve (Fed) will hold rates steady at the upcoming July policy meeting.
Producer inflation in the United States, as measured by the change in the Producer Price Index (PPI), declined to 5.5% YoY in June from 6.0% in May (revised from 6.5%), the US Bureau of Labor Statistics (BLS) reported on Wednesday. This reading came in softer than the market expectation of 6.2%. On a monthly basis, the PPI declined by 0.3%, compared to the 0.6% increase seen in May (revised from 1.1%) and improved compared with the estimate for no change.
Traders see about a 10.2% probability of a rate hike at the Fed's July meeting, versus 16.6% before the data, according to the CME FedWatch Tool. Earlier on Tuesday, U.S. consumer inflation also slowed more than expected in June.
"Gold has pared losses from earlier this morning as PPI came in lower than expected and eased some of those concerns about the Fed having multiple interest rate hikes this year," said Phillip Streible, chief market strategist at Blue Line Futures.
On the other hand, escalating US-Iran hostilities and airstrikes around the Strait of Hormuz have pushed crude oil prices up and could prompt central banks to hold rates at elevated levels for longer, weighing on gold's appeal as a non-yielding asset.
The BBC reported that the US had launched fresh strikes against Iran on Wednesday evening as US President Donald Trump warned Tehran it "better behave”. Iran's top negotiator, Mohammad Bagher Ghalibaf, said that Tehran had "no reason" to abide by the deal if it did benefit from it. On Tuesday, Trump had threatened to attack bridges and power plants should Iran not return to talks next week.
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.
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