Forex News
- EUR/USD has bounced up to 1.1460 but remains about 0.9% down on the week.
- The US Dollar is pulling back from recent highs in thin-volume trading
- Rising hopes of Fed rate hikes are likely to keep US Dollar dips limited.
The Euro (EUR) trades practically flat against the US Dollar (USD) on Friday, changing hands at 1.1460 after bouncing up from three-month lows at 1.1420. The pair, however, remains on track for a 0.9% weekly decline, as rising bets of Federal Reserve (Fed) rate hikes have sent the US Dollar surging across the board.
US Dollar bulls are taking a breather amid the Juneteenth bank Holiday in the US. The Euro seems unable to take off from recent lows despite investors’ enthusiasm about the US-Iran peace deal and the decline in Oil prices. The market sees that lower energy prices will ease pressure on the European Central Bank to keep hiking rates, while, in the US, the Federal Reserve’s (Fed) hawkish stance has underpinned support for the Greenback.
Rising Fed tightening bets are boosting the USD
The Fed left interest rates on hold earlier this week, with the interest rate projections showing that nearly half of the committee members anticipate at least one rate hike this year. Beyond that, the new Chairman, Kevin Warsh, confirmed his commitment to bring inflation to target, altogether boosting bets of some monetary tightening later this year.
In the macroeconomic front, US data has continued showing resilience in the face of the Middle East conflict. Data released earlier this week showed that US Retail Sales rose beyond expectations in May, and the Philadelphia Fed Manufacturing Survey highlighted a strong recovery in June.
In the Eurozone, the German Producer Prices Index (PPI) showed a 2.2% yearly growth in May, above the previous month’s 1.7% year-on-year increase but below the 2.5% expected reading. The monthly increase slowed down to 0.3% from 1.2% in April, suggesting that the impact from the energy shock might be wearing off.
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.
The Japanese Yen (JPY) remains under pressure against the US Dollar (USD), with the USD/JPY pair trading near multi-decade highs and closing in on the 2024 peak around 162.00. Societe Generale points to further upside for the pair if key support holds, while Deutsche Bank warns that official intervention chatter is growing louder as the pair levels come close to levels last seen in 1986.
Intervention chatter intensifies near 1986 lows
Deutsche Bank highlights that the Yen is within a whisker of its weakest level since 1986 and that thin holiday liquidity on Friday could give Japanese authorities a window to surprise the market.
That risk means any further Yen decline could prompt official pushback even if the broader trend still favors US Dollar strength.
There's a lot of chatter about intervention likely around these levels, so we'll see if the holiday provides an opportunity to surprise the market and get a bigger move due to the poor holiday liquidity.
USD/JPY momentum pointing toward 162.00
Societe Generale says the pair has resumed its uptrend after holding a multi-month ascending trendline and breaking out of consolidation, with the 2024 high near 162.00 now the first resistance.
A sustained break above last year's peak would open the door to measured-move targets beyond 164.00 and leave the Yen on the back foot, the bank says.
USD/JPY has staged a steady advance after testing a multi-month ascending trendline (now near 157.40). The pair has broken above the upper boundary of its recent consolidation, underscoring the prevalence of the upward momentum.
Will Japanese authorities intervene again?
Both banks agree that the Japanese Yen remains vulnerable, but they stress different near-term risks. Societe Generale's favors further USD/JPY upside as long as the 159.65-159.10 support zone holds, with targets clustered around 163.70-164.20 and 165.70. Deutsche Bank, meanwhile, flags the rising probability of official intervention near the 1986 lows, a wild card that could trigger sharp reversals in thin liquidity.
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Brown Brothers Harriman’s Elias Haddad notes that USD/JPY is trading just below its multi-decade high but argues that the recent slump in Oil prices should relieve some pressure on the Japanese Yen. He sees scope for the pair to move lower, while Japan’s contained inflation suggests the BOJ is not behind in its tightening cycle.
Benign inflation keeps BoJ patient
"USD/JPY is holding above 161.00, and trading just shy of the multi-decade high of 161.95 reached on July 2024. In our view, the slump in crude oil prices takes some pressure off JPY and could help nudge USD/JPY lower to 155.00."
"Japan May inflation remained contained, in line with consensus. Headline CPI rose +0.1ppt to 1.5% y/y, held in check by government subsidies on energy."
"Bottom line: Japan’s benign underlying inflation backdrop suggests the BOJ is not behind the curve in tightening policy. The swaps curve price in nearly 50bps of hikes to 1.50% in the next twelve months, which looks broadly appropriate."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Rabobank’s Global Daily notes that the Bank of England kept rates unchanged in what policymakers call an “active hold,” effectively tightening policy versus pre‑war expectations for cuts. The authors argue UK conditions are not conducive to second‑round inflation effects and now expect the Bank of England to stay on hold through year‑end, as global monetary policy converges at a slightly more restrictive level.
BoE seen on hold into year end
"The 7-2 split vote underscores that the MPC is hesitant to hike rates, but policymakers remain vigilant for the risks of an energy-driven inflation shock. Having said that, the case for a near-term rate cut has weakened."
"The current Brent futures curve sits well below the most benign scenario that the Bank of England presented in April. Even so, energy prices will remain a key focus. The longer energy prices stay elevated, the greater the risk of second-round effects. However, we believe that UK economic conditions are not conducive to the emergence of such a price and wage-setting dynamic."
"On top of that, inflation data for May suggested that broad-based disinflation has resumed, which may help soften consumers’ inflation expectations. So, Governor Bailey indicated that most of the MPC members are willing to tolerate temporarily above-target inflation. We therefore no longer forecast a rate hike, andwe now expect the Bank of England to stay on hold through the end of this year."
"Unchanged rates in the UK and US this week underscore the differences in global monetary policy dynamics. Recall that the ECB hiked last week, as did the Bank of Japan on Tuesday. However, the ECB’s starting point, a broadly neutral policy rate, was clearly different from the slightly restrictive policy stance in the UK and US."
"Nonetheless, the memorandum of understanding removes some of the immediate risks for the global economy and markets. Accordingly, the Bank of England held rates unchanged yesterday, which policymakers consider an “active hold.” Prior to the Iran war, the Bank and money markets had been looking for cuts this year, which means that not cutting already amounts to some degree of policy tightening."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Elias Haddad at Brown Brothers Harriman writes that GBP/USD has bounced after holding above its late-March low, but he sees risks still tilted lower. He cites stronger US growth relative to the UK and an increasingly uncertain UK political backdrop, including potential Labour leadership challenges, as key headwinds for the Pound against the Dollar.
Sterling pressured by politics and growth
"GBP/USD recovered after holding the line above its March 31 low of 1.3159. GBP/USD risks remain skewed to the downside, reflecting a stronger US growth outlook relative to the UK and the murky UK political backdrop."
"Andy Burnham comfortably won yesterday’s Makerfield by-election, clearing a path for his return to parliament and a leadership challenge to Prime Minister Keir Starmer. A Burnham-led Labour government will likely lead to more spending and borrowing, worsening UK fiscal credibility."
"The swaps curve continues to price in a 25bps Bank of England (BOE) rate rise to 4.00% in November. Yesterday, the BOE left the policy rate unchanged at 3.75% for a fourth straight meeting (widely expected) while the hawkish dissent rose in line with consensus."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- WTI steadies after a sharp decline as improving Hormuz shipping conditions ease supply fears.
- Improving shipping conditions in the Strait of Hormuz are allowing Crude flows to return to the market.
- Investors are reducing the geopolitical risk premium following the interim agreement between the United States and Iran.
West Texas Intermediate (WTI) US Oil trades around $75.60 on Friday at the time of writing, up 0.21% on the day, but remains under pressure after the sharp decline seen this week. The Crude Oil is heading for a weekly loss of roughly 10% as traders reassess Middle East supply risks amid rapidly improving conditions in the Strait of Hormuz.
Market sentiment has improved significantly following the implementation of a 60-day memorandum of understanding between Washington and Tehran. The diplomatic breakthrough has helped reduce the geopolitical risk premium embedded in energy prices as concerns over prolonged disruptions to Oil exports continue to fade.
Shipping traffic is gradually resuming through the strategic waterway, which is vital for global Oil trade. The United States (US) Central Command (CENTCOM) announced that it has lifted all maritime restrictions on traffic traveling to and from Iranian ports and coastal waters. At the same time, several Crude cargoes that had previously been stranded have started leaving the region, improving global supply prospects.
US Vice President JD Vance stated that 12.5 million barrels of Oil passed through the Strait of Hormuz overnight without any interference from Iran, providing further evidence that shipping conditions are returning to normal. Meanwhile, Kuwait announced plans to gradually increase production, reinforcing expectations of improved supply availability.
However, some caution remains. According to Rabobank, the agreement reduces immediate risks for the global economy but leaves unresolved questions regarding the future administration of the Strait of Hormuz. The bank noted that Iran is considering introducing maritime fees after the 60-day period expires, while US President Donald Trump has already voiced opposition to any tolls on vessels using the strategic waterway.
Deutsche Bank also highlighted that signs of renewed Oil flows initially pressured Crude prices lower after the agreement was signed, although the market later stabilized. The bank believes that the gradual resumption of exports through the Strait of Hormuz is helping to ease concerns about global supply disruptions, while uncertainty surrounding longer-term negotiations continues to linger.
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.
- US Dollar Index (DXY) eases to 100.75 after hitting one-year highs at 101.13.
- The Index is on track for a 1% weekly appreciation, boosted by rising Fed tightening hopes.
- Markets are pricing a 77% chance of a rate hike in October, up from 37% a week ago.
The US Dollar Index (DXY), which measures the value of the Greenback against a basket of peers, has lost steam during Friday’s European session, with markets at half throttle amid the Juneteenth bank holiday in the US and investors pondering the soundness of the US-Iran peace deal. The Index retreated from one-year highs above 101.00, although it remains steady above 100.75 so far, and is on track for a 1% weekly rally.
Looking from a wider perspective, the pair keeps the broader bullish trend intact, buoyed by rising bets that the Federal Reserve (Fed) will hike rates at least once this year. The hawkishly leaning monetary policy stance released after June’s meeting and Kevin Warsh’s commitment to bring inflation to the 2% level have cleared doubts about the bank’s new chairman’s suspected dovishness and restored confidence in the bank's independence.
The Fed also published a shorter monetary policy statement, removing any mention of the easing bias and highlighting the improvement in economic activity and the stronger labour market. Beyond that, the interest rate projections, which did not include Warsh’s take, showed that nearly half of the board members expect at least one rate hike in 2026.
Futures markets have ramped up bets on monetary tightening after the Fed’s meeting. Chances of at least one rate hike before October have risen to 77% from around 40% one week before, and the odds for a rate hike before the end of the year are now at 90% from 55% in the previous week, according to data by the CME Group’s Fed Watch Tool.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
Silver prices (XAG/USD) fell on Friday, according to FXStreet data. Silver trades at $65.06 per troy ounce, down 0.99% from the $65.71 it cost on Thursday.
Silver prices have decreased by 8.47% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 65.06 |
1 Gram | 2.09 |
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 Friday, broadly unchanged from 64.06 on Thursday.
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.)
- USD/CHF attracts strong follow-through buying for the third consecutive day on Friday.
- The Iran uncertainty and the Fed’s hawkish tilt boost the USD, supporting spot prices.
- The bullish technical setup backs the case for an extension of the appreciating move.
The USD/CHF pair builds on this week's solid rebound from the 0.7900 mark and gains strong follow-through positive traction for the third consecutive day on Friday. The momentum lifts spot prices closer to the 0.8100 mark, or the highest since November 2025, during the first half of the European session, and is sponsored by a broadly firmer US Dollar (USD).
The USD Index (DXY), which tracks the Greenback against a basket of currencies, rallied to its highest level since May 2025 in the face of the US Federal Reserve's (Fed) hawkish tilt and the uncertainty over the next round of US-Iran negotiations. In fact, US Vice President JD Vance canceled his planned trip to Switzerland for talks with Iran. Adding to this, Israeli air strikes in Lebanon threaten to unravel the US-Iran deal, benefiting the safe-haven USD and supporting the USD/CHF pair.
This week's strong move up from the technically significant 200-day Simple Moving Average (SMA), a subsequent move above the 0.8000 psychological mark, and the previous year-to-date top, touched in January, were seen as key triggers for bulls. Adding to this, the Moving Average Convergence Divergence (MACD) indicator stays in positive territory with a positive spread over its signal line, reinforcing the upside bias for the USD/CHF pair and backing the case for a further near-term appreciation.
Meanwhile, the Relative Strength Index (14) has climbed to the high-60s, hinting at firm bullish momentum and edging toward overbought territory. Hence, the immediate focus remains on whether bulls can sustain traction while keeping the USD/CHF pair comfortably above recent breakout levels, with the 0.7907 region—defined by the 200-day SMA—now acting as a key structural line in the sand on any deeper pullback.
A daily close back toward that moving average would signal waning momentum and expose a broader consolidation phase. However, continued strength above 0.8000 keeps the path open for further gains as long as momentum readings avoid a sharp reversal from overbought conditions.
(The technical analysis of this story was written with the help of an AI tool.)
USD/CHF daily chart
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.98% | 1.36% | 0.71% | 1.03% | 0.35% | 1.49% | 1.18% | |
| EUR | -0.98% | 0.35% | -0.26% | 0.05% | -0.64% | 0.51% | 0.20% | |
| GBP | -1.36% | -0.35% | -0.79% | -0.30% | -0.99% | 0.16% | -0.15% | |
| JPY | -0.71% | 0.26% | 0.79% | 0.31% | -0.36% | 0.81% | 0.46% | |
| CAD | -1.03% | -0.05% | 0.30% | -0.31% | -0.70% | 0.50% | 0.16% | |
| AUD | -0.35% | 0.64% | 0.99% | 0.36% | 0.70% | 1.15% | 0.84% | |
| NZD | -1.49% | -0.51% | -0.16% | -0.81% | -0.50% | -1.15% | -0.30% | |
| CHF | -1.18% | -0.20% | 0.15% | -0.46% | -0.16% | -0.84% | 0.30% |
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).
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