Forex News
- EUR/JPY trades around 183.90, up a modest 0.06%, in an apparent calm that conceals deep underlying tensions.
- The Bank of Japan maintains a hawkish bias, with board members calling for policy rate normalization toward a neutral level of around 2%.
- German consumer sentiment remains fragile in July, capping appetite for the Euro despite the European Central Bank's offensive tone.
EUR/JPY trades around 183.90 on Thursday at the time of writing, up just 0.06% on the day, a near-symbolic gain that reflects market hesitation in the face of two diverging yet both tightening monetary dynamics.
On the European side, the European Central Bank (ECB) raised its deposit rate by 25 basis points (bps) to 2.25% at its June policy meeting, a decision taken against a backdrop of an economy weakened by geopolitical tensions in the Middle East.
Isabel Schnabel, a member of the ECB Executive Board, maintained a resolutely hawkish tone on Thursday, stating that further rate hikes remain necessary to bring inflation back to the 2% target, and that current rates are not yet in restrictive territory. She also emphasized that the relative resilience of the European economy justifies continued monetary tightening, pushing back against the idea of a premature pause. This stance provides technical support for the Euro (EUR) by limiting selling pressure on the currency.
Yet the European macroeconomic picture remains nuanced. The German GfK Consumer Confidence Survey came in at -29.2 for July, a slight improvement from June's upwardly revised -29.7, but well below market expectations of -27.5. This fragility in domestic demand from Germany, the Eurozone's largest economy, tempers the impact of the ECB's hawkish rhetoric and serves as a reminder that monetary tightening is unfolding on unstable economic ground.
On the other side of the pair, the Japanese Yen (JPY) draws its own institutional support. The Bank of Japan (BoJ) is maintaining an orientation toward monetary policy normalization, as reflected in the summary of opinions from its June meeting, where several board members flagged the need to accelerate rate hikes toward a level deemed neutral for the economy. BoJ board member Naoki Tamura reaffirmed the importance of bringing the policy rate closer to the neutral level, estimated at around 2%.
Additionally, speculation around a coordinated currency market intervention between the United States (US) and Japan introduces an additional risk factor for short JPY positions. Japanese Finance Minister Satsuki Katayama and US Treasury Secretary Scott Bessent agreed to take steps on currencies if necessary, a statement that fueled intervention expectations and provided a temporary boost to the Japanese Yen. Japan's Chief Cabinet Secretary Minoru Kihara also signaled that appropriate action could be considered in response to excessive moves in the foreign exchange market. This backdrop maintains an implicit floor under the Japanese Yen, which mechanically caps the upside potential for EUR/JPY in the near term.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | -0.21% | 0.00% | -0.04% | -0.06% | -0.03% | -0.18% | |
| EUR | 0.10% | -0.09% | 0.13% | 0.07% | 0.06% | 0.10% | -0.06% | |
| GBP | 0.21% | 0.09% | 0.21% | 0.19% | 0.15% | 0.20% | 0.02% | |
| JPY | 0.00% | -0.13% | -0.21% | -0.04% | -0.07% | -0.05% | -0.20% | |
| CAD | 0.04% | -0.07% | -0.19% | 0.04% | -0.04% | 0.01% | -0.15% | |
| AUD | 0.06% | -0.06% | -0.15% | 0.07% | 0.04% | 0.03% | -0.10% | |
| NZD | 0.03% | -0.10% | -0.20% | 0.05% | -0.01% | -0.03% | -0.18% | |
| CHF | 0.18% | 0.06% | -0.02% | 0.20% | 0.15% | 0.10% | 0.18% |
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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Silver prices (XAG/USD) rose on Thursday, according to FXStreet data. Silver trades at $57.61 per troy ounce, up 0.31% from the $57.43 it cost on Wednesday.
Silver prices have decreased by 18.96% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 57.61 |
1 Gram | 1.85 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 69.33 on Thursday, down from 69.64 on Wednesday.
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.
(An automation tool was used in creating this post.)
ING’s Frantisek Taborsky highlights persistent Polish Zloty weakness versus Central and Eastern European (CEE) peers as EUR/PLN breaks above its prior range toward 4.290. He attributes vulnerability to the National Bank of Poland’s (NBP) dovish stance and global risk-off conditions. ING’s models see current levels as fair, but risks remain skewed to higher EUR/PLN, with 4.300 flagged as strong resistance.
Zloty underperformance and higher EUR/PLN risks
"The Polish zloty continues to underperform its CEE peers. Over the past two weeks, EUR/PLN has moved from its previous 4.230-4.260 range to levels above 4.290 yesterday, the highest since the start of the US-Iran conflict in March. As we discussed here previously, the zloty has become the region’s most vulnerable currency due to the dovish tone of the National Bank of Poland. Global factors have added to this pressure in recent weeks, with a stronger US dollar and weaker risk sentiment weighing on the currency. Overall, there is little to suggest an early turnaround in EUR/PLN."
"In our models, levels around 4.290 have closed the gap between rates and FX that had been widening since mid-June, suggesting fair levels currently. The market has priced out almost all rate hikes and now expects rates to remain broadly unchanged over the next six months, with only about a 50% probability of one hike over the following year. This is significantly less than for comparable peers such as the Czech Republic or the broader EM space, excluding outliers such as Hungary or Israel with strong idiosyncratic stories."
"For now, the NBP’s tone is unlikely to change, with the next potential trigger being the June inflation print next Tuesday. However, forecasts do not point to a significant upside surprise, while recent data, especially weaker wages, should keep the central bank comfortable. We therefore continue to see risks skewed towards a higher EUR/PLN, although 4.300 should remain strong resistance and help keep the move contained. Otherwise, further zloty weakness could prompt the NBP to reassess its current stance."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Commerzbank’s Michael Pfister argues that enhanced Federal Reserve communication has lowered average implied volatility in the US Dollar but concentrated it on FOMC meeting days. Drawing on 30 years of data across Greenspan, Bernanke, Yellen and Powell, he links longer statements and dot plots to stronger FX reactions, and warns that shorter statements could redistribute volatility across the rest of the year.
Fed guidance reshapes Dollar volatility profile
"This relationship has continued under both Yellen and Powell: the longer the statement, the more pronounced the foreign exchange market's reaction appears to be. 100 additional words result on average in a 0.14% increase in volatility on the day of the FOMC decision compared with the ten trading days prior, although there is significant variation in this relationship from year to year."
"Average volatility has fallen. Fed meetings have simply become more important for the foreign exchange markets than they were under Greenspan. This is most clearly evident from the fact that, under Greenspan, meeting days were essentially as volatile as any other trading day of the year."
"With the introduction of the dot plots in particular, it is clear that volatility is now much more concentrated on meeting days. The Fed’s improved communication has therefore reduced average implied volatility. Meeting days themselves have become significantly more volatile, while the rest of the time is simply less exciting."
"If Kevin Warsh is seeking a return to the shorter statements of earlier times, the Greenspan era suggests that meetings will be less exciting for market participants. In return, however, the remaining days of the year will become significantly more volatile. In other words, whilst the overall average volatility may have been declining for several years, it is not the level that has changed, but the distribution."
"Warsh therefore may not get what he is hoping for: volatility will not disappear, but simply become more evenly distributed across the trading days of the year. While this could be advantageous for short-term positioning around the FOMC meeting, it could also increase the need for hedging on the remaining trading days of the year."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann report that USD/JPY remains in a range near recent highs, with intraday trading expected between 161.40 and 161.90 after a 161.46–161.83 session. They keep a positive 1–3 week outlook, looking for a move toward the 2024 high at 162.00 while 161.10 is flagged as strong support for the uptrend.
Range trade within broader uptrend
"24-HOUR VIEW: When USD was at 161.60 yesterday, we highlighted the following: “The price movements appear to be part of a range-trading phase. Today, USD could trade between 161.20 and 161.80.” USD subsequently traded between 161.46 and 161.83. The price action provides no fresh clues, and today, we expect USD to trade between 161.40 and 161.90."
"1-3 WEEKS VIEW: We have held a positive USD view since last Thursday. In our most recent narrative from Friday (19 Jun, spot at 161.25), we indicated that USD “could rise to the 2024 high of 162.00.” We will continue to hold this view as long as 161.10 (‘strong support’ level previously at 160.90) is not breached."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- WTI faces downward pressure as expectations grow for a surge in Middle Eastern oil supply.
- US Energy Secretary Chris Wright noted a return to normal operational flows, with 20 million oil barrels exiting the Strait.
- An Iraqi official stated Iraq must consider all options if its OPEC production quota is not significantly increased.
West Texas Intermediate (WTI) oil price loses ground for the fourth consecutive day, trading around $69.20 per barrel during European hours on Thursday. Crude oil prices are facing strong headwinds as market expectations point to a significant surge in supply from the Middle East.
Speaking at the Reuters Global Energy Forum in New York, US Energy Secretary Chris Wright highlighted this shift by noting that roughly 20 million barrels of oil recently exited the Strait within a single 24-hour window, characterizing the heavy shipments as a return to normal operational flows. Shipping data closely tracks this recovery, showing that an interim deal on Wednesday cleared the way for three previously stranded tankers carrying 5 million barrels of crude to finally exit the Gulf. Market supply is expected to expand even further due to a temporary US waiver that allows buyers to purchase already-loaded Iranian oil.
Compounding these supply pressures are growing geopolitical tensions and structural friction within OPEC itself. A senior Iraqi oil ministry official stated that Iraq will have to consider all options if its production quota is not significantly increased. The looming prospect of Iraq considering an exit from the cartel introduces further stability concerns, especially following the high-profile, surprise departure of the United Arab Emirates (UAE) from OPEC earlier this year.
This combination of rising Middle Eastern output and Iran’s boost in sales from the temporary reprieve on US sanctions has already driven down the prices of physical crude oil cargoes globally. However, the long-term outlook remains debated among analysts. Goldman Sachs recently noted that it does not expect a massive, sustained pick-up in Iranian production, even if the US sanctions relief manages to extend beyond its scheduled August 21 expiry date, per Reuters.
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.
Danske Research Team notes that Brent crude has dropped back toward USD 72 and near pre-war levels, with Oil pressured by a stronger US Dollar and growth concerns rather than supply alone. They argue that a hawkish Federal Reserve (Fed) and improving supply outlook have created a bearish backdrop, and sees scope for further Oil price declines as global supplies normalise.
Brent slide driven by USD and supply
"In commodities, Brent crude plummeted yesterday, trading around USD72/bbl. this morning and close to the pre-war levels."
"While much attention in the oil market remains on the supply situation, we think the stronger USD and associated growth worries are behind the drop."
"The hawkish turn by the Fed and rosier supply outlook have created a bearish environment for oil."
"While the USD rally has come a long way, traffic through the Strait of Hormuz remains low."
"Hence, oil prices could potentially fall further as global supplies normalise."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/CHF retraces to near 0.8110 from its 10-month high of 0.8140.
- The Fed is highly anticipated to deliver at least one interest rate hike this year.
- SNB’s Tschudin still sees the need for the central bank’s intervention.
The USD/CHF pair trades 0.16% lower at around 0.8110 during the European trading session on Thursday after correcting from its 10-month high of 0.8140 posted the previous day. The broader outlook of the Swiss Franc pair remains firm due to continued outperformance by the US Dollar (USD).
At press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.12% lower to near 101.46, but is still close to its one-year high of 101.80 posted on Wednesday.
Traders see an 82% chance that the Fed will deliver at least one interest rate hike this year, according to the CME FedWatch tool.
Meanwhile, investors await the US Personal Consumption Expenditure Price Index (PCE) data for May, which will be published at 12:30 GMT.
In the Swiss region, Swiss National Bank (ECB) officials still see the need for further Swiss Franc’s depreciation despite falling almost 4% against the US Dollar so far this month. SNB policymaker Petra Tschudin said on Wednesday that medium-term inflation pressures are unchanged and the central bank is ready to intervene in the FX market, if necessary.
USD/CHF technical analysis
USD/CHF trades lower at around 0.8110; however, the pair holds a bullish near-term bias as it remains above the 20-day Exponential Moving Average (EMA) at 0.8000.
The 14-day Relative Strength Index (RSI) hovers just below the overbought band near 69, suggesting strong but stretched upside momentum that could encourage consolidation after the latest spike.
On the topside, the one-year high at 0.8174 is the first meaningful resistance level, and a sustained break above this barrier would open the door for further upside towards 0.8200. Looking down, the 20-day EMA around 0.8000 is the key support level; a downside break below that level would lead to further downside towards the June 17 low at 0.7910.
(The technical analysis of this story was written with the help of an AI tool.)
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.
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