Forex News
- Silver breaks below the $60 mark on Wednesday and hits fresh 2026 lows amid rising Fed rate-hike bets.
- The US Dollar climbs to its highest level in more than a year, adding pressure on the white metal.
- Technically, XAG/USD remains vulnerable below key SMAs, with the next support seen around $55.
Silver (XAG/USD) drops to fresh year-to-date lows on Wednesday as hawkish Federal Reserve (Fed) expectations and a stronger US Dollar (USD) keep sellers firmly in control. At the time of writing, XAG/USD trades around $59.39, its lowest level since December 2025.
The white metal has been under pressure since peaking at an all-time high of $121 in January. The correction has been driven by profit-taking following last year's 148% rally. Later, the correction accelerated as the US-Iran conflict-driven energy shock reignited inflation concerns and prompted traders to abandon expectations of Fed rate cuts this year, sending US Treasury yields higher.
The latest leg lower comes after the Fed delivered a hawkish hold at last week's monetary policy meeting, leading markets to price in the possibility of a rate hike later this year.
According to the CME FedWatch Tool, traders currently see a 70% chance that the Fed will raise borrowing costs in September. As a non-yielding asset, Silver tends to perform better in a lower interest-rate environment.
The hawkish repricing has pushed the US Dollar to its highest levels in more than a year. The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, is trading around 101.69, its highest level since May 2025.
The break below the $60 mark suggests buyers have lost control of a support area that had repeatedly contained declines earlier this year, increasing the risk of a deeper correction in the precious metal.
Even so, with no major US economic releases scheduled for Wednesday, traders may refrain from placing aggressive bearish bets ahead of the Personal Consumption Expenditures (PCE) Price Index report due on Thursday.
Hotter-than-expected data could reinforce expectations of tighter monetary policy and extend Silver's losses, while softer inflation figures could provide some relief and stabilize the metal.
Technical Analysis:
On the daily chart, XAG/USD maintains a bearish near-term bias, with price trading well below the 50-day, 100-day and 200-day Simple Moving Averages (SMAs).
The Relative Strength Index (RSI) at 29.61 slips into oversold territory while the Moving Average Convergence Divergence (MACD) remains negative, which together hint that downside momentum is stretched but still dominant as long as silver stays capped below these primary trend gauges.
On the topside, initial resistance is located at the 200-day SMA near $69.41, ahead of a denser supply zone defined by the 50-day SMA at $73.92 and the 100-day SMA at $76.44.
On the downside, sustained trading below $60 would open the door to a deeper decline toward the next support level near $55.
(The technical analysis of this story was written with the help of an AI tool.)
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.
TD Securities strategists note that Australia’s May headline CPI slowed to 4.0% year-on-year, below consensus and their own forecast, largely on softer transport and fuel costs. They argue this keeps the Reserve Bank of Australia alert to rising pressures and does not reduce the odds of an August rate hike. Also they expect Australian employment to rebound by 40k in May, versus a 30k consensus, after April’s negative print linked to survey changes and holidays. They see the unemployment rate edging down to 4.4% but warn that weak consumer sentiment and lower capacity utilization could push unemployment higher in coming months.
Jobs rebound and sticky inflation
"Australia headline CPI missed to the downside in May, at 4.0% y/y (cons: 4.3%, TD: 4.2%, prior: 4.2%). Trimmed mean inflation (i.e., core inflation), however, edged higher to 3.6% y/y (cons: 3.5%, prior: 3.4%). The downside miss on headline could be attributed to lower transport cost which rose by 3.3% y/y (prior: 6.6%) as fuel prices eased to 7.7% y/y (prior: 18.6%). "
"Regarding the RBA, it's trimmed mean that holds more weight, this is what the RBA looks at, and the m/m trend in trimmed is rising, which is not a great sign. The outcome clearly puts the RBA on alert to rising pressures, not sure it locks in an Aug hike, but it clearly doesn't lower the odds."
"We expect a rebound in jobs to +40k jobs (cons: 30k) after the negative jobs outturn at -18.6k last month. Apr'26 marked the ABS's new LFS collection system and the LFS was also collected over the long Easter holidays which may result in some temporal distortions. "
"Given our forecast, we expect unemployment rate to edge lower to 4.4%. Risk to our view is that consumer sentiment is currently in the dumps and lower capacity utilization points to higher u/e rate over coming months."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/JPY keeps crawling higher and approaches 40-year highs at 161.95 again.
- The wide differential between the BoJ interest rates and those of the major central banks is keeping the Yen under pressure.
- A former BoJ official affirmed that the JPY might reach 165.00 against the USD if the Fed hikes rates this year.
The Japanese Yen (JPY) remains on its back foot against a stronger US Dollar (USD) on Wednesday, with the USD/JPY pair approaching 40-year highs at 161.95 again. The wide differential between the Bank of Japan's (BoJ) interest rates and those of the world's major central banks is keeping the Japanese Yen under pressure, and offsetting the impact of verbal interventions by Japanese officials.
Japan’s Finance Minister Satsuki Katayama reaffirmed earlier this week Tokyo’s commitment to "respond appropriately to currency moves at any time," repeating a message conveyed by different Japanese authorities over the last few weeks.
Previously, Katayama held an online meeting with US Treasury Secretary Scott Bessent, which raised speculation about a joint operation to shore up the JPY, yet the positive impact on the Yen has been negligible.
Interest rate differentials are crushing the Yen
The fundamental background, however, is strongly unfavourable for the JPY as the comparatively low BoJ interest rates make the Yen the currency of choice for carry trades. This practice consists of borrowing a low-yielding currency and exchanging it for a higher-yielding one to pocket the differential, and is likely to intensify as the Fed is expected to hike rates at least once this year.
Against this background, Reuters reports that former BoJ policymaker Sayuri Shirai affirmed at the Reuters Global Market Forum that the USD/JPY pair might rally as far as 165.00 if the Fed meets market expectations and finally hikes borrowing costs this year. Shirai foresees interest rate differentials and doubts about Tokyo’s appetite for intervention will keep weighing on the JPY.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
Standard Chartered’s Dan Pan expects Brazil’s central bank, Banco Central do Brasil (BCB) to deliver a more gradual easing cycle as inflation dynamics remain challenging. Pan now forecasts the Selic rate to pause in Q3 before renewed cuts in Q4-2026, with policy rates seen at 13.75% by end-2026 and 11.75% by end-2027, both higher than previously projected.
BCB seen pausing before renewed cuts
"We now expect a more gradual easing cycle from Banco Central do Brasil (BCB) given the increasingly challenging inflation scenario."
"Rising inflation expectations, stubborn core inflation and surprisingly resilient domestic demand suggest that room for near-term rate cuts has diminished."
"Falling energy costs, slowing demand, and easing election-related market volatility after the October 2026 elections should reopen the door for rate cuts in Q4-2026 and 2027."
"We now see higher year-end policy rates of 13.75% (12.5% prior) for 2026 and 11.75% (10.0%) for 2027."
"BCB cut rates by 25bps on 17 June."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/CAD edges higher toward 1.4230 amid growing expectations of additional Federal Reserve tightening.
- Geopolitical tensions surrounding Iran continue to support safe-haven demand and the US Dollar.
- Investors await the US PCE inflation report for fresh clues on the Federal Reserve’s policy outlook.
USD/CAD trades higher around 1.4230 on Wednesday after earlier reaching a more-than-one-year high at 1.4239. The Canadian Dollar (CAD) remains weighed down by lower Oil prices, while the fundamental backdrop is broadly supportive of the US Dollar (USD), as markets increase their bets on another Federal Reserve (Fed) rate hike this year.
Geopolitical tensions also remain in focus. Iranian President Masoud Pezeshkian stated that Tehran’s ballistic missile program will not be part of negotiations with the United States (US), while US President Donald Trump disputed Iran’s claims regarding inspections by the International Atomic Energy Agency. The uncertainty surrounding a potential agreement between Washington and Tehran continues to underpin demand for the Greenback.
The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, trades around 101.60, near its highest level in more than a year. Money markets are now pricing in nearly a 86% chance of a Fed rate hike by December, up from around 61% before last week’s Federal Open Market Committee (FOMC) meeting. The central bank’s updated projections also showed that a majority of policymakers still see scope for higher rates this year.
Investor attention now turns to Thursday’s release of the US Personal Consumption Expenditures (PCE) Price Index for May. The report, the Fed’s preferred inflation gauge, could provide fresh guidance on the near-term monetary policy outlook.
In Canada, Bank of Canada (BoC) Governor Tiff Macklem said on Tuesday that global financial flow imbalances, driven in part by China’s export surplus and the United States’ reliance on foreign capital, could increase financial stability risks. Meanwhile, Amo Sahota, director at Klarity FX, argued that the Canadian Dollar has remained under pressure in recent weeks due to widening yield differentials in favor of the US Dollar, slowing economic growth and ongoing trade uncertainty.
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 New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.37% | 0.30% | 0.06% | 0.12% | 0.30% | 0.52% | 0.37% | |
| EUR | -0.37% | -0.06% | -0.31% | -0.26% | -0.07% | 0.11% | 0.00% | |
| GBP | -0.30% | 0.06% | -0.23% | -0.21% | -0.01% | 0.17% | 0.06% | |
| JPY | -0.06% | 0.31% | 0.23% | 0.06% | 0.24% | 0.42% | 0.31% | |
| CAD | -0.12% | 0.26% | 0.21% | -0.06% | 0.18% | 0.35% | 0.27% | |
| AUD | -0.30% | 0.07% | 0.00% | -0.24% | -0.18% | 0.18% | 0.05% | |
| NZD | -0.52% | -0.11% | -0.17% | -0.42% | -0.35% | -0.18% | -0.11% | |
| CHF | -0.37% | -0.01% | -0.06% | -0.31% | -0.27% | -0.05% | 0.11% |
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).
MUFG’s Lloyd Chan notes that Indonesian Rupiah (IDR) has been supported by Bank Indonesia’s proactive tightening and FX measures, but elevated US yields and domestic policy uncertainty are testing this buffer. Chan expects Bank Indonesia (BI) to hike to 6.25% by year-end, providing a stronger cushion and slowing the pace of Rupiah depreciation against the Dollar.
Rupiah support from further BI hikes
"The rupiah has been supported by Bank Indonesia’s recent proactive policy tightening and FX support measures, but elevated US yields and domestic policy uncertainty around the government’s commodity export control plan are testing this buffer."
"In addition, MSCI has deferred its decision on Indonesian’s equity market classification till November."
"We expect further BI tightening to 6.25% by year-end to provide stronger cushion for the rupiah, helping to slow the pace of rupiah depreciation against the dollar."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
ING’s Commodities Strategist Ewa Manthey notes that Gold has sold off sharply after record highs, pressured by higher Treasury yields, a stronger Dollar and weaker ETF demand. ING now expects Gold to rise more slowly and with greater volatility, cutting its 2026 Q3 and Q4 average price forecasts while stressing that structural supports such as central bank buying and geopolitical risks remain intact.
Forecast downgrade but structure intact
"While we remain constructive on gold over the medium term, the near-term environment has become more challenging. As a result, we are lowering our gold price forecasts."
"Higher yields, a stronger dollar and weaker ETF demand are likely to weigh on gold for longer than we previously anticipated."
"The primary driver behind gold’s recent decline has been a significant repricing of interest rate expectations."
"Gold’s correction has prompted a reset in our forecasts, but not in our broader view of the market. We continue to believe the structural drivers supporting gold remain intact, though the path higher is likely to be slower and more volatile than we previously expected."
"We now expect gold to average $4,300/oz in the third quarter of 2026 and $4,600/oz in the fourth quarter, down from our previous forecasts of $4,850/oz and $5,000/oz, respectively."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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