Forex News
Societe Generale analysts report USD/ZAR has broken above a multi-month descending trend line and reclaimed its 200-day moving average, suggesting renewed upside momentum. The South African Reserve Bank surprised markets by holding rates at 7.0%. Key support is seen at the 200-day moving average around 16.57/16.50, with upside targets at 16.92, 17.25 and 17.58/17.72.
Pair clears key resistance and 200-DMA
"The SARB surprised markets by leaving the policy rate unchanged at 7.0%, voting 4-2. The expectation was for a hike. USD/ZAR vaulted the 200dma at 16.5920 for the first time since early April in a 3sd move."
"Headline CPI rose to 5.0% yoy in June and core edged up to 4.1%, marking a fourth straight monthly increase from the 3% low in February."
"The bank revised its inflation forecast lower for 2026 but still sees it evolving above target through 2028. Governor Kganyago argued that the tightening of May is still feeding through and weak growth is a concern."
"USD/ZAR recently crossed a multi-month descending trend line and has now broken out of a small base."
"Previous rebound attempts since last year petered out around the 200-DMA and the pair has now reclaimed this MA, this suggests that upward momentum may be returning."
"Defence of the 200-DMA at 16.57/16.50 will be crucial for continuation of the uptrend."
"Late April high at 16.92 is first hurdle. A break above this could extend the up move towards March peak at 17.25 and projections near 17.58/17.72."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- WTI eases as traders book profits following Thursday’s 6% rally.
- Bullish momentum holds firm, with the RSI near 65 and the ADX pointing to a strengthening trend.
- The 100-day SMA near $88 provides immediate support.
West Texas Intermediate (WTI) eases on Friday as traders lock in profits following a 6% jump the previous day. However, the widening Middle East war limits the downside as supply risks intensify around two major energy-shipping routes, the Strait of Hormuz and Bab el-Mandeb.
At the time of writing, WTI trades around $89 per barrel, still up roughly 9% this week.
From a technical perspective, the outlook is firmly bullish. WTI has rebounded from near $67 at the start of the month and subsequently reclaimed its 50-day, 100-day and 200-day Simple Moving Averages (SMAs). The price is now retesting the 100-day SMA at $88.30, which acts as immediate support.
Momentum indicators reinforce the bullish tone. The Relative Strength Index (RSI) hovers near 65 after briefly entering overbought territory, while the Moving Average Convergence Divergence (MACD) indicator holds in positive territory, suggesting that buyers retain control. Meanwhile, the Average Directional Index (ADX) in the low 30s points to a strengthening trend.
On the topside, Thursday’s high of $92.25 acts as immediate resistance, followed by the $95.00 horizontal level. A sustained break above this area could open the door toward the psychological $100.00 mark, followed by the war-driven peak near $113.00.
On the downside, initial support is seen at the nearby 100-day SMA around $88.31, followed by the 50-day SMA near $82.16 and then the 200-day SMA around $74.55, levels that together define a broad demand zone that would need to give way to signal a deeper corrective phase.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
Brown Brothers Harriman’s (BBH) Elias Haddad notes that USD/JPY is consolidating just below a multi-decade high as Japan’s private sector growth strengthens and Consumer Price Index (CPI) tracks below Bank of Japan (BoJ) forecasts. Markets expect the BoJ to hold at 1.00% next week, with around 60 bps of tightening priced over twelve months. This leaves scope for higher BoJ rate expectations, seen as supportive for Japanese Yen (JPY).
BoJ outlook and growth pulse support JPY
"USD/JPY is consolidating just under a multi-decade high. Japan private sector growth strengthens to five-month high in July, supporting the BoJ’s hawkish bias. The composite PMI improved to 53.1 vs. 52.8 in June led by the steepest increase in manufacturing production since February 2014 with softer growth in services."
"Japan June CPI largely matched consensus. Headline CPI rose to 1.7% y/y vs. 1.5% in May held in check by government subsidies on energy. Core CPI ex. fresh food increased to 1.6% y/y vs. 1.4% in May, and core CPI ex. fresh food & energy unexpectedly dipped to 1.7% y/y (consensus: 1.8%) vs. 1.8% in May."
"Both measures of core CPI are tracking well below the BoJ’s 2026 forecast of 2.8% and 2.6%, respectively, consistent with a gradual BoJ tightening cycle."
"The BoJ is widely expected to keep rates on hold at 1.00% next week after delivering a well-telegraphed 25bps hike in June. The swaps curve price in a 25bps rate hike by year-end and a total of 60bps of tightening to between 1.50% and 1.75% over the next twelve months."
"That would still leave the policy rate near the middle of the BoJ’s estimated neutral range (1.10%-2.50%) even as the economy runs above potential, leaving scope for an upward adjustment to BoJ rate expectations in favor of JPY."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Commerzbank analysts highlight that ECB President Lagarde has opened the door to a September rate hike, with sources suggesting euro area inflation must improve markedly to avoid tightening. They stress that current conditions again match ECB’s baseline scenario, while weak PMIs and Oil-driven inflation risks make preventing a hike an uphill struggle for the Euro area economy.
Lagarde guidance keeps tightening expectations alive
"Lagarde opened the door for a rate hike in September, stating that inflation risks are pointing upwards again and that some Council members already mulled over the need to hike as early as this week. Although changes to the ECB's official wording compared to the June assessment were subtle, Lagarde reminded that the current situation aligns again more with the ECB's baseline scenario."
"This is in contrast to the Sintra assessment three weeks ago, when inflation risks appeared more balanced. Sources confirmed that the inflation outlook would need to improve again markedly to prevent a September hike, which looks like an uphill struggle given the current oil price dynamics."
"ECB: Council is prepared to hike in September unless euro area inflation outlook improves markedly. Nagel sees ECB in good position, says "it was right keep rates steady this time"."
"ECB considers several options to mitigate its financial losses, including not paying interest to banks on some of their excess reserves or even charging them fees."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- EUR/JPY edges lower after reaching a 12-week high on Thursday.
- Upbeat Eurozone PMI data fails to lift the Euro.
- Traders fully price in a September ECB rate hike, while the BoJ is expected to hold rates next week.
EUR/JPY consolidates modest losses on Friday as fresh data from Japan and the Eurozone fails to generate a strong market response. At the time of writing, the cross trades around 186.30 after reaching a 12-week high of 186.67 on Thursday.
The preliminary Eurozone HCOB Composite Purchasing Managers’ Index (PMI) rose to a five-month high of 51.9 in July, beating the market forecast of 50.2 and improving from 50.0 in June. The Services PMI climbed to a five-month high of 51.6 from 49.4, while the Manufacturing PMI increased to a three-month high of 52.0 from 51.4.
The stronger PMI figures reinforce signs of economic resilience despite heightened tensions in the Middle East, supporting expectations that the European Central Bank (ECB) can maintain a restrictive policy stance.
On Thursday, the ECB kept all three key interest rates unchanged after raising them by 25 basis points in June. The central bank reiterated that future policy decisions will depend on its assessment of the inflation outlook and the risks surrounding it.
Traders have fully priced in another rate increase at the September meeting. ECB policymaker Gediminas Šimkus said on Friday that “inflation is seen higher than target for a long time” and that he still sees “the probability of a rate hike higher than a hold.” However, he added that policymakers “do not see second-round effects of higher inflation” and will have additional inflation data by September.
Meanwhile, the Japanese Yen remains broadly weak, keeping traders alert to the risk of intervention as USD/JPY stays pinned at a 40-year high. Elevated Oil prices and Japan’s relatively low interest rates continue to weigh on the currency.
Data released earlier on Friday showed that Japan’s headline National Consumer Price Index (CPI) rose 1.7% year-over-year in June, accelerating from 1.5% in May.
According to Reuters, citing three sources, the BoJ is expected to keep rates unchanged next week while warning that inflation could exceed its 2% target, although policymakers believe the threat of an immediate Oil-driven inflation shock has eased since April.
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
Rabobank's Senior Macro Strategist Stefan Koopman notes UK headline CPI fell to 2.6% in June, below the MPC’s forecast, with broad-based downside surprises and easing domestic pressures. However, Koopman argues that renewed energy price increases and recurring shocks mean inflation is likely to move back above 3%, implying that 3% may effectively replace 2% as the UK’s de facto inflation norm over coming quarters.
From target undershoot to renewed pressures
"And Wednesday saw headline CPI inflation falling to 2.6% y/y in June, 0.5pp below the MPC’s April short-term forecast of 3.1%. The downside surprise was broad-based across food, core goods and services, with a particularly notable contribution from food price inflation, which has slowed to just 1.7% y/y. While this was the lowest reading in 15 months, we expect inflation to return to 3%+ soon."
"After a brief pause, energy markets have again become a central risk to the inflation outlook. Crude oil prices have surged following the collapse of the US-Iran ceasefire and renewed disruption to shipping through the Strait of Hormuz. Ukrainian attacks on Russian refining capacity have added further pressure by tightening global diesel and refined product markets."
"The longer elevated energy prices persist, the greater the risk of second-round effects in price and wage-setting. And even if energy prices stabilise and fail to rise further, this will remain a key focus for policymakers in the months ahead."
"The MPC warned in June that the risks to its energy-price outlook were skewed to the upside. We agreed, seeing the MoU as fragile and easily undone."
"We expect the MPC to revisit its energy assumptions and, as in April, present alternative scenarios to show the potential inflation impact of a prolonged supply shock. The risk is that this creates more noise than signal."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- All 70 economists surveyed by Reuters expect the Bank of England to leave its interest rate unchanged at 3.75% on July 30.
- The median forecast sees the interest rate remaining at 3.75% through the middle of next year.
- UK inflation is expected to average 3.1% in 2026, while economic growth is forecast to remain at 1%.
The Bank of England (BoE) is expected to keep its interest rate unchanged at 3.75% at its July 30 monetary policy meeting, according to a Reuters poll of 70 economists. None of the respondents expects a change in interest rates at next week's meeting.
The Reuters survey also showed that the median forecast sees the interest rate remaining at 3.75% through the middle of next year, highlighting expectations that the BoE will maintain a steady policy stance.
Economists revised down their inflation forecast for the year to an average of 3.1%, compared with 3.3% in Reuters' June poll. Meanwhile, the outlook for economic growth was left unchanged, with the UK economy expected to expand by 1% this year.
Market reaction
The British Pound (GBP) showed little reaction to the release, with GBP/USD hovering around 1.3315 at the time of writing on Friday, lacking a clear intraday direction.
BoE FAQs
The Bank of England (BoE) decides monetary policy for the United Kingdom. Its primary goal is to achieve ‘price stability’, or a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).
When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls below target, it is a sign economic growth is slowing, and the BoE will consider lowering interest rates to cheapen credit in the hope businesses will borrow to invest in growth-generating projects – a negative for the Pound Sterling.
In extreme situations, the Bank of England can enact a policy called Quantitative Easing (QE). QE is the process by which the BoE substantially increases the flow of credit in a stuck financial system. QE is a last resort policy when lowering interest rates will not achieve the necessary result. The process of QE involves the BoE printing money to buy assets – usually government or AAA-rated corporate bonds – from banks and other financial institutions. QE usually results in a weaker Pound Sterling.
Quantitative tightening (QT) is the reverse of QE, enacted when the economy is strengthening and inflation starts rising. Whilst in QE the Bank of England (BoE) purchases government and corporate bonds from financial institutions to encourage them to lend; in QT, the BoE stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive for the Pound Sterling.
ING’s Frantisek Taborsky reports that surging Oil and gas prices triggered a sharp hawkish repricing of policy paths in Poland, the Czech Republic and Hungary, taking implied tightening back to stressed March–April peaks. While ING’s economists keep their rate forecasts unchanged, they see higher market rates offering some protection and helping stabilise CEE FX despite a stronger Dollar and risk-off sentiment.
Hawkish repricing and fair-value levels
"The CEE region was hit hard yesterday by the global rise in oil and gas prices, triggering a sharp repricing of implied policy-rate paths. In Poland and the Czech Republic, markets effectively added one extra hike, taking implied tightening to 90bp in the Czech Republic and 70bp in Poland. In Hungary, markets priced out roughly half a cut, leaving only two cuts implied. This brings pricing back to or even above the stressed March-April peaks."
"Our economists are keeping their forecasts unchanged for now: no rate change in Poland or the Czech Republic, and continued cuts in Hungary to 5.00% by year-end. The move appears to reflect stop-losses on earlier receiver positions and a broader positioning reversal. Given the scale of the oil and gas price increase and strong relationship with front-end rates these days, hawkish repricing could continue today unless the geopolitical backdrop improves."
"On the positive side, higher market rates offer some protection for CEE FX, which has been under pressure in recent days. Based on rate differentials in our models, fair-value levels are around 4.290-4.300 for EUR/PLN and 24.100-24.150 for EUR/CZK. A stronger US dollar and risk-off sentiment will likely limit CEE FX upside in the current environment, but higher rates should at least help stabilise regional currencies."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
