Forex News
The German IFO Institute Business Climate Index improves again. The sentiment data arrives higher at 88.8 in August from 86.7 in July, revised higher from 86.6. The data also beats estimates of 87.2.
The IFO Current Assessment Index also comes in higher at 88.5, beating 87.0 estimates and the prior release of 86.5.
Expectations Index improves significantly to 89.1 from 86.8 in July, revised higher from 86.7. The data was already expected to arrive higher at 87.5.
Market reaction
No major reaction is seen in the Euro (EUR) following the German IFO data release. At press time, EUR/USD trades marginally lower to near 1.1660.
Economic Indicator
IFO – Business Climate
This German business sentiment index released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations in Germany. The Institute surveys more than 7,000 enterprises on their assessment of the business situation and their short-term planning. The positive economic growth anticipates bullish movements for the EUR, while a low reading is seen as negative (or bearish).
Read more.Last release: Tue Aug 25, 2026 08:00
Frequency: Monthly
Actual: 88.8
Consensus: 87.2
Previous: 86.6
Source: IFO Institute
- The British Pound edges up against the US Dollar to near 1.3640 despite the US Dollar ticking higher.
- The BoE is unlikely to raise interest rates in the near term.
- Fresh US sanctions will likely boost US Treasury Yields.
The British Pound (GBP) trades marginally higher against the US Dollar (USD) at around 1.3640 during the European trading session on Tuesday, even as the US Dollar Index (DXY) edges up, indicating strength in the British currency.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades slightly higher to near 99.10.
The Pound Sterling gains despite market experts seeing the Bank of England (BoE) holding interest rates steady in the near term.
UK inflation surprise limited as BoE pricing eases
Analysts at Danske Bank note that UK inflation data for July were broadly in line with expectations, with headline CPI rising to "2.9% y/y (cons: 2.9%, prior: 2.6%), mainly driven by the 13% increase in the Ofgem energy price cap from 1 July." They highlight that "core inflation was slightly higher than expected at 2.6% y/y (cons: 2.5%, prior: 2.6%)," while "services eased in line with expectations to 3.4% y/y (cons: 3.4%, prior: 3.6%)." According to Danske, the combination of this inflation print and "yesterday's weak labour market data" has "taken the top off BoE pricing for the remainder of the year."
Meanwhile, the US Dollar trades higher against its other peers as investors fear that fresh United States (US) sanctions on Iran could lift oil prices higher and eventually US Treasury Yields.
GBP/USD Technical Analysis
GBP/USD trades at 1.3640, maintaining a bullish near-term bias, with price holding above the 20-day Exponential Moving Average (EMA) at 1.3531, which reinforces an underlying supportive structure after the recent advance.
The Relative Strength Index (14) near 69 suggests strong upside momentum, though it is flirting with overbought territory, hinting that gains could become more gradual if buyers pause ahead of fresh catalysts.
On the downside, immediate support is seen at the 20-day EMA around 1.3530, where a break would expose a deeper correction toward prior lows not visible in the current indicator set. As long as GBP/USD remains above this moving average, the broader constructive tone is likely to persist, with any shallow pullbacks viewed as corrective within the ongoing uptrend.
Strategists at Scotiabank describe the current technical backdrop for GBP/USD as "solidly bullish," noting that after a period of range trading and "two tests of 1.3150 (April and June)," the pair now appears better poised to advance. They argue that "a sustained push above 1.3650/60 implies potential for an extension towards the 1.41 zone over the balance of the year," underscoring their view that the underlying trend dynamics continue to favour further Pound appreciation.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling 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, its currency will benefit 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.
MUFG’s Derek Halpenny and Abdul-Ahad Lockhart highlight that Gold’s recent strength alongside USD weakness and higher US yields has not historically confirmed a debasement story. They find that in past episodes, Gold often corrected as DXY stabilised, but if US yields were to fall materially, history points to a regime where Gold rallies further and sustained Dollar softness becomes more likely.
Yield dynamics key for Gold outlook
Our analysis examines similar previous episodes of USD weakness, gold strength and rising Treasury yields testing whether subsequent market behaviour validates the debasement narrative. The historical evidence suggests it does not.
"Across prior episodes, extreme readings in the signal were not followed by persistent USD weakness. Instead, DXY typically stabilised, while gold frequently corrected over the subsequent one to three months."
"If that backdrop were to change and yields began falling materially, history points to a different regime."
"In previous episodes where USD weakness and gold strength coincided with declining yields, gold continued to rally and sustained USD softness became more likely."
"A move from rising to falling yields represents an important signal that the market is transitioning from a fiscal and term-premium story towards an easing-driven USD bearish environment."
"As long as yields remain elevated, the more likely outcome is dollar stabilisation, gold consolidation and selective outperformance in carry-sensitive FX rather than a sustained debasement."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/CAD attracts some follow-through buying amid a combination of supporting factors.
- Geopolitical risks and inflation-driven Fed rate hike bets benefit the safe-haven Grenback.
- Softer oil prices and the US-Canada trade war undermine the Loonie, supporting the pair.
The USD/CAD pair is seen building on its recovery move from the 1.3730 region, or a three-month low touched last week, and gaining positive traction for the second straight day on Tuesday. Spot prices stick to modest intraday gains through the first half of the European session and currently trade around the 1.3865 area, up 0.15% for the day.
The US Dollar (USD) attracts some follow-through buying as inflation risks stemming from volatile energy prices keep bets for at least one interest rate hike by the US Federal Reserve (Fed) on the table. Apart from this, geopolitical uncertainties stemming from the US-Iran standoff act as a tailwind for the safe-haven Greenback. Furthermore, a modest downtick in crude oil prices and the deepening US-Canada trade war undermine the commodity-linked Loonie, lending additional support to the USD/CAD pair.
From a technical perspective, an intraday move above the 23.6% Fibonacci retracement level of the June-August decline could be seen as a key trigger for bullish traders. Moreover, momentum indicators are leaning constructive, with the Relative Strength Index (14) hovering near 62 and Moving Average Convergence Divergence (MACD) readings staying in positive territory. This hints that buyers are attempting to stabilize the USD/CAD pair after its recent pullback and build on the recovery from a multi-month low.
Any subsequent move up, however, might confront an immediate resistance near the 1.3900 mark ahead of the 1.3925-1.3930 confluence – comprising the 100-period Simple Moving Average (SMA) on the 4-hour chart and the 38.2% Fibo. level. A further recovery attempt would face additional supply around the 50.0% level at 1.3988 and the 61.8% retracement at 1.4049. On the downside, initial support is seen at the 23.6% Fibo. retracement at 1.3852, with a deeper floor emerging at the Fibo. anchor near 1.3731 if selling resumes.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
USD/CAD 4-hour 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 Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.17% | -0.04% | 0.37% | 0.39% | 0.26% | 0.35% | 0.29% | |
| EUR | -0.17% | -0.21% | 0.11% | 0.22% | 0.09% | 0.19% | 0.12% | |
| GBP | 0.04% | 0.21% | 0.24% | 0.45% | 0.32% | 0.39% | 0.35% | |
| JPY | -0.37% | -0.11% | -0.24% | 0.08% | -0.03% | 0.06% | -0.00% | |
| CAD | -0.39% | -0.22% | -0.45% | -0.08% | -0.08% | -0.01% | -0.10% | |
| AUD | -0.26% | -0.09% | -0.32% | 0.03% | 0.08% | 0.08% | 0.03% | |
| NZD | -0.35% | -0.19% | -0.39% | -0.06% | 0.01% | -0.08% | -0.05% | |
| CHF | -0.29% | -0.12% | -0.35% | 0.00% | 0.10% | -0.03% | 0.05% |
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).
- NZD/USD loses ground as the US Dollar advances amid rising US-Iran geopolitical tensions.
- Markets remain uncertain whether aggressive US economic pressure will resolve or prolong the Middle East conflict.
- High inflation could support the New Zealand Dollar (NZD) on expectations of a RBNZ September rate hike.
NZD/USD extends its losses for the second successive day, trading around 0.5950 during the European hours on Tuesday. The currency pair faces downward pressure as the US Dollar (USD) gains strength from safe-haven demand driven by rising geopolitical tensions.
The United States has ramped up economic pressure on Iran and its global commercial partners, signaling that major allies and trade hubs like China will not be exempt from the restrictions.
Treasury Secretary Scott Bessent outlined an aggressive strategy aimed at systematically isolating Iran from the global economy. As part of this push, the Treasury intends to impose sanctions on nations that maintain business relationships with the Islamic Republic. Adding to the pressure, US President Donald Trump stated that foreign entities will face a strict timeline to end trade ties with Tehran or incur unilateral US financial penalties.
Despite the aggressive posture, market participants remain cautious about the overall outcome. Uncertainty persists over whether these punitive measures will successfully push the conflict toward a resolution or inadvertently prolong hostilities and delay the reopening of the Strait of Hormuz.
However, further gains for the Greenback may be capped by the US Treasury's decision to double its buyback operations for longer-dated bonds. Reports indicate that Secretary Bessent could utilize up to $1 trillion from the Treasury General Account to finance these repurchases, potentially altering market liquidity and yields.
However, the downside of the NZD/USD pair could be restrained as the New Zealand Dollar (NZD) could find support on expectations that the Reserve Bank of New Zealand will raise interest rates again in September, as inflation remains elevated.
RBNZ tightening path seen as consistent with neutral range
Brown Brothers Harriman’s Elias Haddad notes that markets are now effectively aligned with the policy outlook, pointing out that “over the next twelve months, the swaps curve implies 75bps of tightening to 3.25%.” He characterises this as “reasonable given above-target inflation and a policy rate near the lower-end of the RBNZ’s neutral range (2.20%-4.10%),” suggesting that the projected path of hikes remains broadly consistent with the central bank’s stated framework.
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.
- Silver may regain ground due to doubled US bond buybacks and potential $1 trillion Treasury account spending.
- Industrial demand from solar panels, electric vehicles, and AI data centers continues to provide fundamental backing.
- Robust industrial consumption in green tech, solar panels, EVs, and AI infrastructure could support Silver prices.
Silver price (XAG/USD) extends its losses for the second successive day, trading around $68.40 per troy ounce during the European hours on Tuesday. However, Silver may regain ground as US government interventions in the bond market revive the debasement trade. The momentum stems from the US Treasury’s announcement that it will double its buyback operations for longer-dated bonds. Reports indicate that Secretary Bessent could utilize up to $1 trillion from the Treasury General Account to finance these repurchases, a move capable of significantly altering market liquidity and Treasury yields.
However, market participants speculate that these intervention measures might offer only a temporary solution. The aggressive buyback strategy has renewed broader concerns regarding the risks of an escalating US debt crisis, persistent inflation, and potential dollar weakness.
Beyond macroeconomic and monetary factors, Silver may draw fundamental support from robust industrial consumption. Demand remains particularly strong across key growth sectors, driven by the green energy transition, photovoltaic solar panel production, electric vehicles, and expanding artificial intelligence data center infrastructure.
Silver prices could track the expected upward momentum in gold. Commerzbank notes that safe-haven demand for Gold is being reinforced by a further escalation in US sanctions policy toward Iran. The bank highlights that the US has "expanded sanctions targeting Iran's oil revenues, shipping, aviation, technology, gold and digital assets, while putting third-party countries that continue doing business with Iran on notice for potential secondary sanctions." In Commerzbank’s view, this broadening of the sanctions net adds to the prevailing geopolitical and fiscal uncertainty that has recently supported Gold prices.
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.
In a Reuters report on Tuesday, a Chinese Foreign Ministry spokesperson, Lin Jian, said that its cooperation with Iran is conducted within the framework of international law and should not be interfered with or disrupted when asked about new United States (US) sanctions related to Iran.
The Chinese Foreign Ministry spokesperson added that the administration is closely monitoring the developments and will take all necessary measures to firmly safeguard its own rights and interests, ministry spokesperson Lin Jian said at a press conference.
On Monday, the US announced new sanctions on 60 individuals, entities and vessels, in a move that it said would cut off Iran's economic lifeline, but stopped short of the most punishing measures.
Market reaction
The US Dollar (USD) appears to have responded positively to remarks from China. As of writing, the US Dollar Index (DXY) rebounds to near after an intraday corrective move to near 99.00.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact 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 when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
Forex Market News
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