Forex News

Commerzbank’s Carsten Fritsch reports that Gold briefly dipped below USD 4,000 per troy ounce before bargain buying emerged, yet the metal is still heading for its largest quarterly drop in 13 years and a steep monthly decline. A hawkish shift in US Federal Reserve expectations has lifted bond yields and the Dollar, triggering heavy ETF outflows. Upcoming US labour data is seen as pivotal.

Rate expectations crush bullion

"Nevertheless, with a fall of almost 14% the gold price is on course for its biggest quarterly loss in 13 years. The monthly decline in June of around 11% is one of the sharpest in the last 15 years."

"Whilst, at the start of the quarter, market participants still saw some likelihood of the Fed cutting interest rates this year, an interest rate rise by the US Federal Reserve is now firmly priced in. This led to a rise in bond yields and an appreciation of the US dollar."

"According to Bloomberg, ETF holdings have fallen by more than 40 tons since the start of the quarter. In the last six trading days alone, ETF outflows totalled just over 30 tons."

"Thursday’s US labour market data is likely to be of great significance for future price movements. After all, the price slide began in early June following the release of surprisingly robust labour market data for May, which significantly boosted rate hike expectations."

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

• The Swiss Franc faces selling pressure against the US Dollar ahead of US JOLTS Job Openings data for May.
• The US Dollar outperforms as the Fed is expected to deliver at least one interest rate hike this year.
• Investors await Swiss Real Retail Sales for May and the US NFP data for June.

The Swiss Franc (CHF) trades lower against the US Dollar (USD) as the latter outperforms amid firm expectations that the Federal Reserve (Fed) will raise interest rates at least once this year.

During the European trade, the USD/CHF pair trades 0.2% higher to near 0.8090. The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.25% higher to near 101.35.

According to the CME FedWatch tool, there is an almost 80% chance that the Fed will deliver at least one interest rate hike this year.

Hawkish Fed prospects have prompted after central bank’s policy announcement this month, in which policymakers raised Federal Fund Rate expectations to 3.8% for 2026 from 3.4% anticipated in March.

Meanwhile, investors await the United States (US) JOLTS Job Openings data for May, which will be released at 14:00 GMT. The data is expected to show that employers posted 7.3 million fresh jobs, lower than 7.618 million in April.

This week, the major trigger for the US Dollar will be the Nonfarm Payrolls (NFP) data for June, which will be released on Thursday. The official employment report is expected to show that the economy created 110K fresh jobs, lower than 172K in May. The Unemployment Rate remains steady at 4.3%.

In the Swiss region, investors will focus on the Real Retail Sales data for May, which will be released on Wednesday. The Real Retail Sales data is expected to arrive at 0.8% Year-on-Year (YoY), lower from 1.6% in April.

• Gold remains depressed after hitting levels below $ 4,000 for the first time in the last seven months.
• Fed hiking expectations are supporting the US Dollar ahead of US employment data.
• Technical indicators show a bullish divergence with no other sign of a trend shift in sight.

Gold (XAU/USD) trades right above the $4,000 psychology¡gicval level at the time of writing, after hitting fresh year-to-date (YTD) lows at $3,941 earlier on the day. The precious metal has turned positive on the daily chart, but rallies remain subdued as rising hopes of Federal Reserve (Fed) tightening keep buoying the USD ahead of a string of US employment indicators.

Later on Tuesday, the US JOLTS Job Openings report is expected to show solid job creation in May. The highlight of the week, however, is Thursday’s Nonfarm Payrolls report. which is forecast to show a 110K increase in net employment, after 172K in May, confirming that the US economy keeps creating jobs at a healthy pace.

These figures are likely to strengthen the case of a Federal Reserve (Fed) rate hike in the coming months. The CME FedWatch Tool shows a 31% chance of a quarter-point hike in September and more than 60% in October, up from 6% and 20%, respectively, one month ago. The risk is skewed to the downside for precious metals.

Technical Analysis: Momentum Indicators show bullish divergence

XAU/USD trades at $4,032, keeping a bearish near-term bias and on track to a more than 11% decline in June, with no sign of a bullish reversal except for the bullish divergence in the Relative Strength Index (14). The Moving Average Convergence Divergence (MACD) has turned mildly positive, hinting at fading downside momentum, rather than a trend reversal.

Bulls would need to break Friday's high of $4,096, and the area between the downward resistance trend-line now around $4,315 and the June 15 and 17 highs, at the $4,360-$4,380 area, to confirm a trend shift.

On the downside, immediate support is at the mentioned YTD low at $3,941, and the late October 2025 lows in the $3,900 area. Further down, the next target is the 161.8% Fibonacci extension of the June 18-23 downleg, at $3,727.

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

ING’s Francesco Pesole notes that the Dollar has been giving back recent gains against G10 currencies as equities recover and risk sentiment improves. He highlights expectations for stronger US consumer confidence and softer JOLTS openings, which should still signal a healthy labour market. Pesole sees today’s data as neutral to mildly supportive for the Dollar, with USD bullish momentum clearly fading ahead of Kevin Warsh’s Sintra speech.

Dollar softens as risk sentiment improves

"The dollar has continued to hand back recent gains against most G10 currencies, largely thanks to a recovery in equities. Added support for risk sentiment has come from news that the US and Iran will start a new round of negotiations despite weekend skirmishes. "

"This second factor, however, seems to be weighing on oil currencies (the Australian dollar, Canadian dollar, and Norwegian krone), which are lagging alongside the yen."

"Focus today turns to US data. Our macro team looks for a well above-consensus 97.5 print in consumer confidence (vs 94.5), supporting the narrative of resilient spending. By contrast, JOLTS openings should fall in May, with our forecast at 7.25m against a 7.3m consensus."

"Overall, we see a neutral to moderately positive impact on the dollar from today’s data. But USD bullish momentum has clearly faded, and improved risk sentiment argues against another sharp leg higher for now, at least until Fed Chair Kevin Warsh’s Sintra speech tomorrow and Thursday’s jobs data provide clearer direction."

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

• The Reserve Bank of Australia Minutes show that further rate hikes remain possible if inflation persists.
• A stronger US Dollar ahead of key US labor market data limits the Australian Dollar's rebound.
• Investors now await the US JOLTS Job Openings report and Nonfarm Payrolls data for fresh policy clues.

AUD/USD trades around 0.6890 on Tuesday, holding steady on the day as investors digest the latest Reserve Bank of Australia (RBA) monetary policy meeting Minutes while remaining cautious ahead of key US labor market data.

The RBA Minutes showed that policymakers view current financial conditions as somewhat restrictive but remain prepared to raise interest rates further if necessary to ensure price stability. The central bank also warned that tensions in the Middle East continue to pose upside risks to inflation while weighing on the economic growth outlook.

These comments provide some support to the Australian Dollar (AUD), although their impact remains limited. Investors believe the central bank now prefers to assess the effects of the monetary tightening already delivered before making further policy adjustments, a view also highlighted by TD Securities.

Meanwhile, economic data from China provided a positive signal for the Australian Dollar. China's official Manufacturing Purchasing Managers Index (PMI) rose to 50.3 in June from 50 previously, beating expectations of 50.1. The Non-Manufacturing PMI also improved to 50.2 from 50.1 in May, above the consensus forecast of 49.9, pointing to continued expansion in the services sector.

Despite the encouraging data from Australia's largest trading partner, the Australian Dollar remains under pressure against the US Dollar (USD). The Greenback continues to attract demand ahead of this week's key labor market releases, with investors focusing on the Job Openings and Labor Turnover Survey (JOLTS) report due later on Tuesday and the Nonfarm Payrolls report later this week.

The US Dollar Index (DXY) therefore remains supported as markets continue to adjust expectations for the Federal Reserve's (Fed) policy outlook. This cautious backdrop is limiting AUD/USD's recovery despite the relatively hawkish tone of the RBA Minutes and signs of resilience in the Chinese economy.

BNP Paribas strategists highlight that despite weaker post-Covid productivity than the United States (US), the European Union retains stronger public finances and growing international use of the Euro (EUR). They note widening debt burdens in favor of Europe, the EU’s remaining fiscal room, potential renewed joint debt issuance, and the Euro’s rising role in international debt markets, especially for green and sustainable bonds.

Euro gains as reserves and funding

"As a result, the comparison, when viewed through the prism of public finances, falls largely in its favour: starting from a similar level in 2015 (around 65% of GDP), European and US public debt ratios have diverged significantly, standing at 83% and 124% of GDP respectively in 2025 (a gap of 40 percentage points). Although it does not explain everything, such a disparity in debt regimes inevitably has an impact in terms of comparative economic performance."

"For years, the United States was able to run large deficits by benefiting from the ‘exorbitant privilege’ of issuing debt in dollars, the world’s main reserve currency. But the exercise may be reaching its limits: in 2025, interest payments by US general government amounted to 4.7% of GDP – the highest ratio in 28 years – whilst they did not exceed 2% of GDP in the EU."

"Rarely have debt burdens diverged so widely on either side of the Atlantic, a situation that the markets - quicker to question the dollar’s safe-haven status when setbacks occur - are becoming aware of. The fact that the EU still has fiscal room for manoeuvre, and may even be able to use the lever of joint debt once again, is far from trivial in view of the ‘wall of investment’ that lies ahead (EUR 750 to 800 billion in additional annual expenditure to address the challenges of digitalisation, competitiveness and the green transition, according to the Draghi report)."

"Significant fact: the euro continues to gain ground as international reserve currency. In a recent report[8], the European Central Bank (ECB) highlights the strong growth in international debt issuance denominated in euros, including green and sustainable bonds."

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