Forex News
- EUR/GBP fails to hold above 0.8500 and gives away gains on Monday.
- Sterling remains buoyed as markets brace for Andy Burnham's nomination as UK's Prime Minister.
- The Euro loses ground, weighed by the escalating tensions in Iran and higher Oil prices
The Euro (EUR) ticks lower against the British Pound (GBP) on Monday, trading at 0.8495 at the time of writing, as last week’s rebound from 13-month lows at 0.8455 failed to consolidate above 0.8500.
The Sterling is picking up across the board as the market braces for the nomination of the former Mayor of Manchester, Andy Burnham, who is expected to replace Keir Starmer, who stepped down as Prime Minister in June after only two years in office,
Burnham, who will become the seventh UK Prime Minister in just over a decade, has pledged in an interview with The Times newspaper to release a 10-year economic plan to “rewire” the UK and improve people’s lives.
The Pound has kept a solid tone since Burnham was presented as the best-positioned candidate to replace Starmer, as he strived to calm markets, promising a responsible fiscal policy. Investors, however, are likely to keep a cautious stance with the GBP, awaiting the identities of the Cabinet’s members.
The Euro, on the other hand, remains on its back foot, weighed by the escalating hostilities in Iran and the higher Oil prices, as the barrel of Brent Crude climbed to fresh one-month highs, a few cents below $90.00 on Monday. In this context, the European Central Bank (ECB) is widely expected to stand pat on rates at its monetary policy meeting, due later this week, but President Cristine lagarde will, most likely, be questioned about a rate hike in September.
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro 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 then its currency will gain in value 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.
ING analysts Warren Patterson and Ewa Manthey note that Brent Oil has broken above US$90 as escalating conflict in the Persian Gulf and potential chokepoint closures disrupt vessel flows. They highlight the end of US SPR releases, rising speculative net longs in ICE Brent and gasoil, and increased vulnerability of the oil market to further supply shocks.
Brent rallies on supply risk escalation
"ICE Brent broke above US$90/bbl this morning with no let-up in the escalation in the Persian Gulf. The US and Iran continue to exchange strikes, which are proving to be deadly for both sides. If this escalation goes unchecked, we could return to an environment of wide-scale attacks across the Persian Gulf."
"Vessel flows have essentially ground to a halt. LSEG data show that only 2 outbound visible oil tankers transited the Strait of Hormuz, with no inbound traffic. Flows are essentially back to where they were before the Memorandum of Understanding (MoU)."
"The issue for the oil market is that SPR releases, which have offered some relief during the war, are set to cease around the end of this month. This leaves the market relatively more vulnerable. Clearly, there’s always the potential for SPRs to be tapped further."
"Given the market moves in recent weeks, it’s unsurprising to see speculators increase their net long in ICE Brent. They bought 114,752 lots over the last reporting week, leaving them with a net long of 169,839 lots as of last Tuesday. The move was driven predominantly by fresh longs entering the market."
"Meanwhile, speculators also increased their net long in ICE gasoil by 2,389 lots over the week to 71,875 lots. Given the recent move in the gasoil market, it's surprising that we have not seen more aggressive speculative buying, though this may be more evident in the next Commitment of Traders report."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Commerzbank’s Thu Lan Nguyen notes that the Pound initially strengthened as markets welcomed Andy Burnham’s rapid move into 10 Downing Street and hopes for reduced political turmoil. She cautions that the UK faces stagnating growth, high debt and rising costs, and that current positive sentiment toward the Pound could reverse if economic revival and fiscal consolidation disappoint.
Political shift supports Pound for now
"Today, Andy Burnham will officially move into 10 Downing Street in London, completing a surprisingly smooth transfer of power from his predecessor, who resigned only last month. Markets initially rewarded this rapid change in leadership with an appreciation of the pound."
"On the other hand, the market appears to be betting that the period of political turmoil and recurring scandals that has characterised recent years is coming to an end. Whether Burnham can in fact provide greater stability remains to be seen."
"In short: Burnham needs to revive the economy while at the same time consolidating the public finances. In doing so, he is dependent on the confidence of financial markets."
"If he fails to achieve either of these goals, the currently positive sentiment could quickly reverse. In the short term, however, markets are likely to grant Burnham the benefit of the doubt."
"The Burnham euphoria could therefore well continue for some time. However, there is a substantial risk that, as his term in office progresses, political and economic realities will move more into focus – and the initial euphoria will give way to a certain sobriety."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
United Overseas Bank’s (UOB) Quek Ser Leang sees EUR/USD consolidating with a slight downside bias intraday, expecting moves within 1.1405–1.1450. Over 1–3 weeks, the Euro is still viewed with an upside bias as long as 1.1405 holds, though momentum toward 1.1520 remains uncertain. On a multi-week horizon, a break below 1.1390/1.1410 would target 1.1210.
Euro holds range with mild upside risk
"24-HOUR VIEW: When EUR was at 1.1445 last Friday, we stated that “the current price movements are likely part of a consolidation phase between 1.1420 and 1.1465.” Our view of consolidation was not wrong, even though EUR traded within a narrower range than expected (1.1424/1.1452). EUR traded on a soft note after opening today, but the slight increase in downward momentum is not sufficient to indicate a continued decline. Overall, EUR could edge lower today, but any decline is likely to be contained within a 1.1405/1.1450 range."
"1-3 WEEKS VIEW: Last Thursday (16 Jul, spot at 1.1470), we highlighted that while EUR “is likely to trade with an upside bias, it is too early to determine whether there is sufficient momentum for EUR to reach the significant resistance level at 1.1520.” We added, “a breach of 1.1405 (‘strong support’ level) would indicate that EUR has reverted to a range-trading phase.” EUR has not been able to make any headway on the upside, but we will continue to hold the same view as long as 1.1405 is not clearly breached."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- GBP/USD attracts some dip-buyers during the Asian session amid a modest USD downtick.
- The optimism over the UK’s fiscal outlook supports the GBP and contributes to the bounce.
- Escalating US-Iran tensions, inflation fears, and Fed hike bets should help limit USD losses.
The GBP/USD pair rebounds around 30 pips from the Asian session low on Monday, snapping a two-day losing streak amid a modest US Dollar (USD) downtick. Spot prices, however, remain well below a two-month high, touched last Wednesday, as escalating US-Iran tensions and reviving hawkish US Federal Reserve (Fed) expectations help limit USD losses.
In fact, the US completed a ninth straight night of strikes against Iran on Sunday aimed at degrading Iranian military capabilities used to attack commercial vessels and civilian mariners transiting the Strait of Hormuz. In response, Iran fired ballistic missiles and one-way attack drones targeting US allies in the region, with Bahrain, Jordan, Kuwait, and Iraq reporting a new wave of attacks. This, in turn, prompts traders to continue pricing in the geopolitical risk premium, which might continue to benefit the safe-haven Greenback.
Meanwhile, rising US-Iran hostilities, along with the closure of the Strait of Hormuz, lift crude oil prices to a fresh high since June 12, fueling inflation fears and bolstering bets for at least one interest rate hike by the Fed in 2026. This further validates the near-term positive outlook for the USD and warrants some caution before placing fresh bullish bets on the GBP/USD pair. The downside for the British Pound (GBP), however, seems limited amid the receding domestic political risks and the optimism over the UK’s fiscal outlook.
Andy Burnham will become the UK's seventh Prime Minister in a decade on Monday and is expected to appoint a fiscally conservative finance minister, such as Shabana Mahmood. The market attention will then shift to the UK monthly employment details on Tuesday, followed by the UK CPI on Wednesday. The crucial data might influence the GBP, which, along with geopolitical developments, should contribute to infusing volatility around the GBP/USD pair.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.01% | -0.12% | -0.02% | -0.07% | -0.12% | -0.16% | 0.01% | |
| EUR | 0.00% | -0.08% | 0.00% | -0.07% | -0.11% | -0.17% | 0.02% | |
| GBP | 0.12% | 0.08% | 0.09% | 0.02% | -0.03% | -0.08% | 0.08% | |
| JPY | 0.02% | 0.00% | -0.09% | -0.05% | -0.10% | -0.11% | 0.01% | |
| CAD | 0.07% | 0.07% | -0.02% | 0.05% | -0.04% | -0.06% | 0.06% | |
| AUD | 0.12% | 0.11% | 0.03% | 0.10% | 0.04% | -0.02% | 0.14% | |
| NZD | 0.16% | 0.17% | 0.08% | 0.11% | 0.06% | 0.02% | 0.14% | |
| CHF | -0.01% | -0.02% | -0.08% | -0.01% | -0.06% | -0.14% | -0.14% |
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 drifts higher to around 0.5855 in Monday’s early European session.
- Cooling US inflation curbs Fed rate hike bets.
- The PBoC kept its benchmark lending rates unchanged for a 14th consecutive month on Monday, in line with expectations.
The NZD/USD pair holds positive ground near 0.5855 during the early European session on Monday. The US Dollar (USD) weakens against the New Zealand Dollar (NZD) as softer US inflation data have led traders to cut bets on imminent rate hikes from the US Federal Reserve (Fed).
Data released last week showed that the US Consumer Price Index (CPI) inflation slowed in June, while the Producer Price Index (PPI) also arrived softer than expected. Markets continue to expect no change to rates at the Fed's next meeting on July 29, with Fed funds futures pricing an implied 85.6% chance of a hold, compared to a 61.5% odds a month ago, according to the CME FedWatch tool.
Cleveland Fed President Beth Hammack said on Friday that interest rates may need to rise to beat back persistent inflation. Meanwhile, Fed Governor Christopher Waller warned that policymakers need to see "several months" of sustained cooling before taking rate hikes off the table.
Earlier Monday, the People’s Bank of China (PBOC) kept its benchmark lending rates unchanged for a 14th consecutive month, as widely expected. The one-year and five-year LPRs were at 3.00% and 3.50%, respectively.
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.
- USD/CAD tests the lower boundary of the descending channel around 1.4000.
- The 14-day Relative Strength Index at 36 shows sellers maintain control.
- The pair may rebound toward the nine-day EMA of 1.4075.
USD/CAD extends its losses for the second successive day. trading around 1.4010 during the Asian hours on Monday. The technical analysis of the daily chart indicates the pair is moving downward within the descending channel, suggesting an ongoing bearish bias.
The USD/CAD is holding beneath both the 50-day Exponential Moving Average (EMA) and the shorter-term nine-day EMA, which keeps the pair in a mildly bearish near-term stance after its recent pullback from the highs.
The 14-day Relative Strength Index (RSI) has cooled to about 36, suggesting fading bullish momentum but not yet oversold conditions, which hints that sellers retain control while downside extension may still unfold in a more measured fashion.
The USD/CAD pair tests the lower boundary of the descending channel around 1.4000. A break below the channel would strengthen the bearish bias and put downward pressure on the pair to navigate the region around 1.3481, the lowest since October 2024.
On the upside, the USD/CAD pair may rebound toward the nine-day EMA of 1.4075, followed by the upper boundary of the descending channel around 1.4110. Further advances would cause the bullish emergence and support the currency cross to approach the 15-month high of 1.4248, reached on June 24.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.01% | -0.12% | -0.02% | -0.07% | -0.14% | -0.16% | 0.01% | |
| EUR | 0.01% | -0.08% | -0.02% | -0.08% | -0.12% | -0.17% | 0.02% | |
| GBP | 0.12% | 0.08% | 0.07% | 0.01% | -0.05% | -0.08% | 0.08% | |
| JPY | 0.02% | 0.02% | -0.07% | -0.04% | -0.11% | -0.10% | 0.02% | |
| CAD | 0.07% | 0.08% | -0.01% | 0.04% | -0.06% | -0.06% | 0.06% | |
| AUD | 0.14% | 0.12% | 0.05% | 0.11% | 0.06% | -0.01% | 0.16% | |
| NZD | 0.16% | 0.17% | 0.08% | 0.10% | 0.06% | 0.00% | 0.13% | |
| CHF | -0.01% | -0.02% | -0.08% | -0.02% | -0.06% | -0.16% | -0.13% |
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 Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
- The Japanese Yen faces slight selling pressure against its major peers amid rising energy prices.
- Intensifying Middle East conflicts have boosted oil prices.
- Both the BoJ and the Fed are expected to leave interest rates unchanged in their policy meetings next week.
The Japanese Yen (JPY) trades lower against its major currency peers, but is marginally higher against the US Dollar (USD) at around 162.35 during the early European trading session on Monday.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.01% | -0.12% | -0.03% | -0.07% | -0.13% | -0.16% | 0.00% | |
| EUR | 0.00% | -0.08% | -0.02% | -0.08% | -0.13% | -0.17% | 0.02% | |
| GBP | 0.12% | 0.08% | 0.07% | 0.04% | -0.05% | -0.08% | 0.07% | |
| JPY | 0.03% | 0.02% | -0.07% | -0.03% | -0.09% | -0.09% | 0.03% | |
| CAD | 0.07% | 0.08% | -0.04% | 0.03% | -0.05% | -0.06% | 0.06% | |
| AUD | 0.13% | 0.13% | 0.05% | 0.09% | 0.05% | -0.01% | 0.15% | |
| NZD | 0.16% | 0.17% | 0.08% | 0.09% | 0.06% | 0.00% | 0.13% | |
| CHF | -0.01% | -0.02% | -0.07% | -0.03% | -0.06% | -0.15% | -0.13% |
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).
The Asian-Pacific currency is under pressure as surging oil prices due to energy supply disruption through the Strait of Hormuz, a critical checkpoint to almost 20% of global energy supply, have weakened currencies from energy import-dependent economies.
The continuous attack from the Iranian military on oil tankers attempting transit through the Hormuz has dampened confidence of shipping companies to use the passage.
Iran's Islamic Revolutionary Guard Corps (IRGC) said that two oil tankers were blown up after attempting to transit the southern route of the Hormuz, adding that the passage will not be safe for petrochemical products or 'single drop of oil and gas' transit as long as US actions in the region continue, The Guardian reported.
On the monetary policy front, the Bank of Japan (BoJ) is expected to keep interest rates unchanged at 1% in the July policy meeting, Kyoto reported, as stated by people familiar with the matter. The report also showed that the central bank will indicate that the monetary policy path will remain on the upside and will likely raise the growth forecast for the year.
Meanwhile, the US Dollar trades lower amid hopes that the Federal Reserve (Fed) will not cut interest rates in the policy meeting later this month.
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