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Commerzbank’s Volkmar Baur notes that the New Zealand Dollar has recovered about 2 cents since the latest rate hike, with markets now effectively pricing in nearly one additional hike by year-end. However, weaker June retail sales and still-subdued consumer sentiment lead him to a more pessimistic economic view, suggesting the kiwi could suffer if expectations are revised lower.
Rate expectations versus retail weakness
"The New Zealand kiwi has gained about 2 cents since last week’s central bank meeting and is currently trading above 0.58 against the USD again."
"Considering that one hike has already occurred, the market has effectively priced in nearly an entire additional rate hike."
"However, the debit and credit card usage data for June - which was released yesterday - shows that this outlook may be somewhat overoptimistic."
"In the core rate (excluding spending on cars and gasoline), sales fell slightly by 0.1% in the second quarter compared to the previous quarter, marking the first decline since Q1 2025."
"If our view prevails, the kiwi is likely to suffer as a result."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- GBP/USD retreats slightly from over a two-month high, touched on Wednesday.
- The supportive fundamental backdrop warrants some caution for bearish traders.
- The bullish technical setup backs the case for the emergence of some dip-buying.
The GBP/USD pair attracts some sellers on Thursday and erodes a part of the previous day's strong gains to an over two-month high, around the 1.3555-1.3560 region. Spot prices stick to modest intraday losses around the 1.3525 zone through the first half of the European session, though the broader setup favors bullish traders and warrants caution before positioning for any further fall.
As investors digest this week's soft US Consumer Price Index (CPI) and Producer Price Index (PPI) reports, elevated crude oil prices revive energy-driven inflation fears and US Federal Reserve (Fed) rate hike expectations. This, along with escalating US-Iran tensions, offers some support to the safe-haven US Dollar (USD) and turns out to be a key factor exerting pressure on the GBP/USD pair.
The British Pound (GBP), on the other hand, might continue to draw support from easing UK political uncertainty and growing optimism over the UK's fiscal outlook. In fact, the incoming UK Prime Minister, Andy Burnham, has pledged to anchor his policy agenda on fiscal discipline and is expected to pick a fiscally conservative finance minister. This helps limit the downside for the GBP/USD pair.
From a technical perspective, the overnight breakout through the 61.8% Fibonacci retracement level of the May-June fall was seen as a fresh trigger for bulls against the backdrop of the recent repeated rebounds from the 1.3350 confluence. A subsequent strength beyond the 1.3500 psychological mark validates the constructive outlook for the GBP/USD pair and backs the case for further gains.
Moreover, the Moving Average Convergence Divergence (MACD) histogram is positive, and the line remains above zero. That said, the Relative Strength Index (RSI) at 72.2 signals overbought conditions that could slow the pace of gains rather than reverse the broader constructive tone. This makes it prudent to wait for some near-term consolidation or a modest pullback before the next leg up.
Meanwhile, immediate resistance is seen at the 78.6% Fibo. level at 1.3547, ahead of the recent cycle high, and at 1.3657, which would be the next target if bulls extend control. On the downside, initial support is located at the 61.8% retracement at 1.3461, followed by the 50.0% level at 1.3401. Deeper pullbacks would find a stronger demand around the 200-period SMA and the 38.2% level confluence at 1.3345-1.3340.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
GBP/USD 4-hour chart
Pound Sterling Price This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.55% | -0.98% | 0.23% | -0.81% | -0.75% | -1.53% | -0.11% | |
| EUR | 0.55% | -0.45% | 0.80% | -0.27% | -0.25% | -0.99% | 0.45% | |
| GBP | 0.98% | 0.45% | 1.21% | 0.18% | 0.20% | -0.54% | 0.95% | |
| JPY | -0.23% | -0.80% | -1.21% | -1.13% | -0.98% | -1.80% | -0.39% | |
| CAD | 0.81% | 0.27% | -0.18% | 1.13% | 0.15% | -0.68% | 0.78% | |
| AUD | 0.75% | 0.25% | -0.20% | 0.98% | -0.15% | -0.74% | 0.61% | |
| NZD | 1.53% | 0.99% | 0.54% | 1.80% | 0.68% | 0.74% | 1.50% | |
| CHF | 0.11% | -0.45% | -0.95% | 0.39% | -0.78% | -0.61% | -1.50% |
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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
- Oil prices correct to near $79.00, but is close to the monthly high of $80.61.
- Iran’s military forces continue to attack ships transiting the Hormuz without their permission.
- US President Trump warned that he would authorize bombing Iranian infrastructure if the nation doesn’t return for negotiations.
West Texas Intermediate (WTI), futures on NYMEX, trade 0.9% lower to near $79.00 during the European trading session on Thursday, but is closer to its monthly high of $80.61 posted on Tuesday.
The United States (US) blockade on Iranian seaports is keeping energy supply restricted, as Iranian forces are attacking cargos that are attempting transit through the Strait of Hormuz without their permission.
Further global energy supply disruption is highly likely amid fears that military aggression between the United States (US) and Iran would widen.
During the day, an Iranian army spokesperson said that the US continues to attack several areas, while warning that the war will spread to new arenas, the Islamic Republic News Agency (IRNA) reported.
On Wednesday, US President Donald Trump also warned, in an interview with Fox News, that he will authorize military forces to strike Iran’s bridges and power plants next week if the nation doesn’t come to the table for negotiation.
Going forward, investors will focus on the speech from US President Trump, which is scheduled for Friday.
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 (UOB) Quek Ser Leang and Lee Sue Ann note that AUD/USD has broken above significant resistance at 0.7015, with price action extending to 0.7021. In the next 24 hours, the Australian Dollar is expected to stay in a higher 0.6985–0.7025 range. Over 1–3 weeks, rapid momentum suggests scope for a rise toward 0.7045, while the broader 1–3 month view remains negative below 0.6835.
Short term bullish, medium term cautious
"24-HOUR VIEW: AUD soared to a high of 0.6992 two days ago. Yesterday, when AUD was at 0.6975, we highlighted the following: “While the sharp rise appears excessive, there is room for AUD to test 0.6995. The major resistance at 0.7015 is unlikely to come under threat. To keep the momentum going, AUD must hold above 0.6945, with minor support at 0.6960.” Our directional view was not wrong, but we did not expect the sharp rise that sent AUD to a high of 0.7021. AUD could continue to rise, but deeply overbought conditions suggest any advance could be contained within a higher range of 0.6985/0.7025."
"1-3 WEEKS VIEW: While we highlighted yesterday (15 Jul, spot at 0.6975) that “upward momentum is starting to build again,” we pointed out that “it is too early to determine whether AUD can break above the significant resistance at 0.7015.” We did not expect AUD to jump and break above 0.7015 (high was 0.7021). The rapid increase in momentum suggests AUD could rise toward 0.7045. The upside risk will remain intact as long as AUD holds above 0.6950 (‘strong support’ level was at 0.6930 yesterday)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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