Forex News

UOB’s Quek Ser Leang notes USD/SGD remains range-bound, with intraday action expected between 1.2905 and 1.2940 as recent price moves provided no fresh directional clues. Over the next one to three weeks, the bank sees mild downward pressure as having eased, projecting a broader 1.2890–1.2990 range. On a one to three month horizon, a break above 1.3000 could target 1.3095.

Dollar seen consolidating in ranges

"24-HOUR VIEW: We noted “a slight increase in upward momentum,” but we pointed out that “it is insufficient to indicate a continued rise in USD.” We indicated that USD “is more likely to trade in a higher range of 1.2920/1.2960.” However, USD traded in a quiet manner between 1.2914 and 1.2938. The price action provides no fresh clues, and USD is likely to trade between 1.2905 and 1.2940 today."

"1-3 WEEKS VIEW: Our update from yesterday (09 Jul, spot at 1.2940) remains valid. As highlighted, the recent “mild downward pressure has eased,” and USD “is likely to trade in a range between 1.2890 and 1.2990.”"

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• AUD/USD advances toward 0.6960, supported by a softer US Dollar and renewed strength in the Chinese Yuan.
• Trump’s warning that the Iran ceasefire is “over” is weighing on risk sentiment and limiting the pair’s upside.
• Next week’s US CPI and Australia’s Consumer Inflation Expectations will be key to the Fed's and RBA's policy outlooks.

AUD/USD advances toward the 0.6960 area on Friday, supported by a softer US Dollar (USD) and renewed strength in the Chinese Yuan (CNY). The pair continues to recover on the four-hour chart, although escalating tensions between the United States (US) and Iran are limiting broader risk appetite.

US President Donald Trump said on Truth Social that Iran had requested further negotiations and that Washington had agreed to continue talks. However, Trump warned that the ceasefire was “over,” raising concerns that hostilities could intensify despite diplomatic channels remaining open.

Meanwhile, the Chinese Yuan strengthened to a one-week high against the US Dollar, offering additional support to the Australian Dollar given Australia’s close trade ties with China. The move followed a stronger fixing from the People’s Bank of China (PBOC), which set the USD/CNY midpoint at 6.7989, below the key 6.8000 level.

The latest price action also points to improving momentum in AUD/USD. The pair is trading above its short and medium-term moving averages, while the Relative Strength Index (RSI) remains in positive territory without signaling overbought conditions.

Looking ahead, investors will closely monitor next week’s US Consumer Price Index (CPI) report. A stronger-than-expected inflation reading could reinforce expectations that the Federal Reserve (Fed) will maintain a restrictive policy stance, supporting the USD and limiting further gains in AUD/USD. Softer inflation, by contrast, could weigh on the Greenback and help the pair extend its advance.

In Australia, attention will turn to Consumer Inflation Expectations. The report will offer fresh insight into how households expect prices to develop over the coming year and could influence expectations surrounding the Reserve Bank of Australia’s policy outlook.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.6956, retaining a mildly bullish tone as it holds above both the 20-period Simple Moving Average (SMA) at 0.6938 and the 100-period SMA at 0.6934. The clustering of short and medium-term SMAs beneath price suggests a supportive backdrop, while the RSI around 58 indicates constructive but not overextended bullish momentum, leaving room for further upside provided immediate overhead barriers are challenged.

On the topside, initial resistance is aligned at 0.6958, ahead of a tighter cap at 0.6961, with a more notable barrier emerging at 0.6970, where buying pressure could start to fade if momentum cools. On the downside, first support is seen at 0.6949, followed by the 20-period SMA at 0.6938 and the 100-period SMA at 0.6934, where a break back below these levels would undermine the current constructive bias and hint at a deeper correction.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• Gold heads for a weekly loss as renewed Middle East tensions revive inflation and Fed rate hike fears.
• Markets await next week's US CPI data for fresh clues on the Fed's monetary policy path.
• Technically, XAU/USD retains a bearish structure, trading below the 50-day, 100-day and 200-day SMAs.

Gold (XAU/USD) trades on the back foot on Friday, struggling to build on the previous day's gains and heading for a weekly loss as renewed hostilities in the Middle East have revived fears of energy-driven inflation and Federal Reserve (Fed) interest rate hikes.

At the time of writing, XAU/USD is trading around $4,104, down 0.45% on the day.

The metal, however, lacks follow-through selling as traders reassess US-Iran tensions following reports that technical talks are continuing despite the military clashes, prompting a pullback in crude Oil prices. In a post on Truth Social, US President Donald Trump said Iran had asked to continue talks and that the United States had agreed, while emphasizing that Washington had informed Tehran that the ceasefire was "over."

Can Gold stage a sustained recovery?

While Gold has staged a modest rebound from $3,941, its lowest level since November 2025, the metal is struggling to attract meaningful buying interest.

Since the US-Iran war broke out in February, Gold has behaved less like a traditional safe-haven asset and more like a rate-sensitive instrument, with price action largely driven by the hawkish repricing of Fed interest rates.

As a result, Gold posted its worst quarterly performance in thirteen years, while traders also booked profits following an exceptional two-year rally that pushed prices to a record high near $5,600 in January.

The near-term outlook is still tilted to the downside. The situation in the Middle East remains fragile, keeping the risk of energy-driven inflation at the forefront.

Even if geopolitical tensions ease and lower crude Oil prices help reduce inflation concerns, the Fed is expected to maintain a restrictive monetary policy stance as policymakers continue to signal the central bank's commitment to returning inflation to its 2% target.

Gold is therefore unlikely to stage a sustained recovery as expectations for a Fed interest rate hike later this year continue to support the US Dollar (USD) and US Treasury yields.

According to the CME FedWatch Tool, markets are pricing in a 58% chance of a rate increase at the September meeting. Attention now turns to next week's US Consumer Price Index (CPI) data, due on Tuesday, which could shape expectations for the Fed's interest rate path in the coming months.

Technical analysis: XAU/USD struggles below key resistance levels

On the daily chart, XAU/USD remains within a downward channel and is holding below the 50-day, 200-day and 100-day Simple Moving Averages (SMAs), which collectively cap the upside and reinforce a bearish bias.

Momentum is subdued, with the Relative Strength Index (RSI) at 43 hovering below the neutral 50 line, while the Average Directional Index (ADX) at 37 points to a still-firm trend, suggesting that selling pressure remains dominant as Gold struggles to reclaim broken levels.

On the upside, initial resistance emerges at the horizontal barrier near $4,200, ahead of the 50-day SMA around $4,352. A stronger resistance zone lies around the 200-day SMA at $4,493, with the upper boundary of the descending channel near the 100-day SMA at $4,593 likely to cap any recovery attempts.

On the downside, the next notable support sits at the horizontal level around $3,950, and a clear break below this floor would open the door to a deeper slide within the prevailing bearish structure.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• EUR/USD retreats from a one-week high as the US Dollar rebounds.
• Safe-haven demand supports the Greenback amid evolving Middle East developments.
• Markets await next week's US and Eurozone inflation data for fresh policy clues.

EUR/USD trims gains on Friday as the US Dollar (USD) rebounds while traders digest the latest developments in the Middle East. At the time of writing, the pair is trading around 1.1433, easing from a one-week high of 1.1460 touched earlier during the Asian session.

In a post on Truth Social, US President Donald Trump said Iran had asked to continue talks and that the United States had agreed, while emphasizing that Washington had informed Tehran that the ceasefire was "over."

Trump's remarks came after the US and Iran exchanged military strikes following attacks by Iran's Islamic Revolutionary Guard Corps (IRGC) on commercial vessels transiting the Strait of Hormuz earlier this week.

Earlier on Friday, Reuters reported that Qatari mediators are in Iran for talks aimed at creating conditions for broader negotiations.

As the situation remains fluid, the US Dollar continues to benefit from safe-haven demand. The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, is trading around 100.85 after rebounding from an intraday low of 100.60.

Meanwhile, expectations that the Federal Reserve (Fed) will keep monetary policy restrictive amid heightened inflation risks continue to provide additional support to the Greenback.

According to the CME FedWatch Tool, markets are currently pricing in a 58% probability of a rate hike at the September meeting. At the same time, traders also expect the European Central Bank (ECB) to raise interest rates again later this year.

Attention now turns to next week's final Eurozone inflation data, alongside US Consumer Price Index (CPI), for fresh clues on the interest rate outlook

Societe Generale said EUR/USD has staged a modest rebound after finding support near 1.1325, although the recovery lacks strong bullish confirmation. The bank sees the 1.1475-1.1500 zone as key resistance, while a break below 1.1390 could revive the broader downtrend.

• USD/JPY falls toward 161.80 on Friday, down 0.37% on the day.
• The Japanese government wants to encourage pension funds to increase investments in domestic assets.
• Easing expectations for a Federal Reserve rate hike are weighing on the US Dollar.

USD/JPY falls toward 161.80 on Friday, down 0.37% at the time of writing, as the Japanese Yen (JPY) benefits from an unexpected shift in the Japanese government's stance on domestic asset allocation. The Japanese currency is also supported by a modest pullback in the US Dollar (USD) as markets scale back expectations for further monetary tightening in the United States (US).

The move was triggered after Japan's Finance Minister Satsuki Katayama said the government intends to encourage households and the Government Pension Investment Fund to increase their investments in Japanese financial assets significantly. She also stated that authorities expect interest rates to rise gradually and want to accelerate discussions on expanding Japanese government bond products aimed at households.

These developments have strengthened expectations of a gradual repatriation of capital toward domestic assets while reinforcing speculation that the Bank of Japan (BoJ) will continue to normalize monetary policy. The announcement has also revived intervention concerns in the foreign exchange market, encouraging an aggressive short-covering move in the Japanese Yen.

According to MUFG analyst Derek Halpenny, the announcement came as a surprise and explains the sharp reaction across the Japanese Yen, Japanese government bonds and equities. However, he believes these policy changes will take time to produce meaningful effects, adding that confidence in the BoJ remains essential before institutional investors significantly reduce overseas investments in favor of Japanese government bonds.

The US Dollar is also under pressure as expectations for additional Federal Reserve (Fed) rate hikes continue to ease. Fed of New York President John Williams said on Thursday that he does not expect a sustained rise in energy prices despite the renewed tensions in the Middle East. According to the CME FedWatch tool, markets now assign a 26.2% chance to a 25-basis-point rate hike in July, while the odds of a September hike hold at 50.0%.

Meanwhile, geopolitical developments remain in focus after Qatar launched a new mediation effort with Iran aimed at easing tensions surrounding the Strait of Hormuz. According to Reuters, the talks are being coordinated with the United States and focus on implementing the US-Iran memorandum of understanding as well as resolving disputes over navigation through the strategic waterway. However, US President Donald Trump stated that the ceasefire is now over, highlighting that geopolitical risks remain elevated despite ongoing diplomatic efforts.

OCBC strategists Christopher Wong and Sim Moh Siong note that the European Central Bank's (ECB) June minutes justified the latest rate hike while keeping flexibility on future moves. Since then, Oil prices have fallen sharply and June Consumer Price Index (CPI) surprised on the downside. Their base case remains for one final ECB rate hike in September, though President Lagarde’s comments in Sintra raise the risk that June was a one‑and‑done move.

ECB weighs final hike versus pause

"The ECB’s June meeting minutes reinforced the Governing Council’s view that the June rate hike was fully justified based on the information available at the time, while maintaining flexibility on future policy moves."

"Since the 11 June meeting, oil prices have fallen sharply and June CPI data surprised on the downside."

"Our base case remains for one final ECB rate hike in September, although ECB President Lagarde’s comments in Sintra have increased the possibility that June marked a "one-and-done" move."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

DBS economists Radhika Rao and Mo Ji project China’s Gross Domestic Product (GDP) growth to slow from 5.0% year-on-year in Q1 to 4.8% in Q2. They note resilient industrial production and strong export growth driven by AI-related electronics, but highlight weak retail sales, subdued household sentiment, and continued drag from declining property prices and falling fixed asset investment.

AI exports offset weak consumption

"Economic growth is expected to decelerate from 5.0% yoy in Q1 to 4.8% in Q2, amid uneven domestic momentum."

"Industrial production is expected to improve from 4.5% in April to 4.6% in June, amid resilient external demand."

"Exports growth should have maintained its momentum with growth of 20.4% in June, driven by regional AI-electronic demand."

"However, retail sales growth is projected to moderate to 0.5% in June 2026, partly due to a high base effect from last year's trade-in subsidy programs."

"Meanwhile, declining property prices continue to weigh on household wealth, suggesting consumption is likely to stay subdued in the near term."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Royal Bank of Canada (RBC) economist Nathan Janzen notes that Canadian labour markets showed further signs of stabilisation in June, following a stronger improvement in May. Employment rose modestly, while per-worker conditions improved and the unemployment rate edged down to 6.5%. Janzen highlights softer population growth, firmer economic data and lower U.S. tariff rates as supporting factors, and expects further unemployment declines later in 2026.

Labour data supports gradual recovery view

"Canadian labour markets showed further signs of steadying in June after a larger improvement in May."

"The employment increase itself in June (+18k) left the measure still down 6k on net for the year."

"But we continue to think that slower employment gains should be expected given a sharp slowing in Canadian population growth."

"Critically, controlling for changes in the demographic backdrop, per-worker labour market conditions held onto a larger-than-expected improvement in May with the unemployment rate edging down to 6.5% in June from 6.6% the prior month, led by a pullback in the youth unemployment rate on an improved summer job market."

"Against that backdrop, the June labour market data is broadly consistent with our own base-case that Canada's economy is broadly still improving on a per-person and per-worker basis and we continue to look for the unemployment rate to edge down further over the second half of the year."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

ING economists Deepali Bhargava and Lynn Song project India’s consumer inflation to edge up to 4.2% year-on-year in June, while wholesale inflation moderates to 9%. They highlight that lower Brent prices should ease wholesale costs, but persistent retail fuel prices, firmer food inflation and sticky core pressures keep overall inflation risks tilted to the upside over the coming months.

Wholesale easing, consumer prices stay sticky

"We expect India’s consumer price inflation to edge slightly higher to 4.2% year-on-year in June, while wholesale price inflation is likely to moderate to 9%."

"Softer Brent crude prices should pull wholesale prices lower, but persistent retail fuel costs, gradually firming food inflation and sticky core pressures point to a mild uptick in consumer inflation."

"The gradual pass-through of wholesale prices to retail prices, meanwhile, is expected to support underlying inflation pressures."

"Overall, inflation risks remain tilted to the upside, as El Niño-related weather disruptions threaten food costs."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• The Canadian Dollar strengthens after Canada's June employment report beats expectations.
• USD/CAD heads for its first weekly loss in six weeks.
• Next week's US inflation data could shape expectations for the Fed's interest rate path.

The Canadian Dollar (CAD) strengthens against the US Dollar (USD) on Friday after stronger-than-expected Canadian employment data. At the time of writing, USD/CAD is trading around 1.4160 after falling to a more than two-week low of 1.4136.

Statistics Canada reported that the economy added 18.2K jobs in June, exceeding market expectations of 10K. However, the reading was sharply lower than the 87.8K increase recorded in May. The Unemployment Rate eased to 6.5% from 6.6%.

As labor market conditions remain uneven, the Bank of Canada (BoC) is likely to maintain a wait-and-see approach, with policymakers expected to leave interest rates unchanged in the coming months while monitoring inflation risks, particularly those stemming from higher energy prices.

Energy-driven inflation risks are back in focus after Oil prices rose earlier this week following renewed hostilities in the Middle East. Higher crude lifted the commodity-linked Canadian Dollar, putting USD/CAD on track for its first weekly loss in six weeks.

However, Oil prices are paring earlier gains as diplomatic efforts to de-escalate tensions in the Middle East continue. Reuters reported that Qatari mediators are in Iran for talks aimed at creating conditions for broader negotiations.

Meanwhile, the US Dollar remains firm as traders reassess developments in the Middle East, while expectations of a Federal Reserve (Fed) interest rate hike later this year continue to underpin the Greenback, limiting further downside in USD/CAD.

The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, is trading around 100.90 after rebounding from an intraday low of 100.60.

Traders now await next week's US Consumer Price Index (CPI) data, due on Tuesday, for fresh clues on the Fed's monetary policy path.