Forex News
- Gold attracts some follow-through selling as rising Fed rate hike bets continue to boost the USD.
- Easing inflationary concerns fail to impress bullish traders or lend any support to the commodity.
- The bearish technical setup backs the case for further losses as the focus shifts to the US PCE data.
Gold (XAU/USD) maintains its offered tone below the $4,100 mark through the first half of the European session, within striking distance of a nearly two-week low touched earlier this Wednesday. This marks the second straight day of a negative bias – also the fifth day in the previous six – and is sponsored by hawkish Federal Reserve (Fed)-inspired US Dollar (USD) buying interest. Despite easing inflationary concerns amid the recent fall in Crude Oil prices, traders have been pricing in a greater chance of a rate hike by the Fed. This, in turn, pushes the USD to a fresh high since May 2025 and keeps the non-yielding bullion close to the year-to-date low, touched earlier this month.
Crude Oil prices have fallen significantly over the past month or so and touched a fresh low since early March this Wednesday amid the resumption of traffic through the Strait of Hormuz. In fact, an Iranian military source told Fars news agency that a limited number of vessels are being allowed to pass through the strait each day under coordination with Iran’s Revolutionary Guards Navy. Furthermore, the US Treasury Department issued a temporary 60-day sanctions waiver that authorizes the production, delivery, and sale of Iranian crude oil, petroleum, and petrochemical products. This eases global supply concerns and continues to weigh on Oil prices, helping alleviate upstream pressure on consumer inflation.
Nevertheless, investors have significantly upped their bets that the US central bank will raise borrowing costs by at least 25 basis points (bps) in 2026 following the Fed's hawkish signal last week. Nine of the Fed's 19 committee members believed that they would need to raise the policy rate to combat inflation. Adding to this, the new Fed Chair, Kevin Warsh, focused strongly on price stability during the post-meeting press conference, suggesting that the central bank might not rush to cut interest rates even in the face of declining growth. Moreover, mixed US-Iran messages on Tehran's nuclear issues act as a tailwind for the Greenback, which is seen as another factor exerting downward pressure on the Gold price.
US Vice President JD Vance said on Monday that peace talks in Switzerland had resulted in Iran agreeing to invite inspectors from the International Atomic Energy Agency (IAEA) to its nuclear facilities. Moreover, US President Donald Trump said that Iran had "fully and completely" agreed to the highest level of nuclear inspections long into the future. However, Iran's state media, citing the foreign ministry, reported that Tehran had made no new commitments on nuclear inspections. This keeps geopolitical risk premiums in play, favoring the USD bulls and backing the case for deeper losses for the Gold. Traders now look to the US Personal Consumption Expenditures (PCE) Price Index, due on Thursday, for a fresh impetus.
XAU/USD 4-hour chart
Gold remains vulnerable amid bearish technical setup
Against the backdrop of the recent repeated failures near the 100-period Simple Moving Average (SMA) on the 4-hour chart, a convincing break and acceptance below the $4,100 mark could be seen as a fresh trigger for the XAU/USD bears. Moreover, momentum indicators are weak, with the Relative Strength Index (RSI) hovering near oversold territory around 31, while the Moving Average Convergence Divergence (MACD) stays in negative territory with a declining line. This, in turn, suggests that downside risks remain dominant even if occasional short-covering bounces emerge and backs the case for a decline toward retesting the year-to-date low, around the $4,024-$4,023 area, touched earlier this month.
On the topside, the 100-period SMA at $4,287.33 is the first meaningful resistance, and a sustained recovery above this barrier would be needed to ease the prevailing bearish bias and open the door to a more constructive consolidation phase. Until then, any approach toward the $4,280-$4,290 region is likely to be treated as an opportunity to re-establish selling interest while momentum signals fail to show a durable bullish reversal.
(The technical analysis of this story was written with the help of an AI tool.)
US Dollar Price Last 7 Days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 2.27% | 1.85% | 0.91% | 1.67% | 2.46% | 3.28% | 2.34% | |
| EUR | -2.27% | -0.42% | -1.50% | -0.60% | 0.20% | 0.97% | 0.07% | |
| GBP | -1.85% | 0.42% | -1.02% | -0.17% | 0.63% | 1.42% | 0.48% | |
| JPY | -0.91% | 1.50% | 1.02% | 0.89% | 1.66% | 2.50% | 1.54% | |
| CAD | -1.67% | 0.60% | 0.17% | -0.89% | 0.79% | 1.59% | 0.65% | |
| AUD | -2.46% | -0.20% | -0.63% | -1.66% | -0.79% | 0.79% | -0.13% | |
| NZD | -3.28% | -0.97% | -1.42% | -2.50% | -1.59% | -0.79% | -0.93% | |
| CHF | -2.34% | -0.07% | -0.48% | -1.54% | -0.65% | 0.13% | 0.93% |
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).
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight an abrupt 1.22% plunge in AUD/USD to 0.6908, leaving the pair deeply oversold but still biased lower. Intraday, they see potential for a brief break below 0.6900 while expecting it not to hold. On a 1–3 week view, the impulsive decline points to further downside, with 0.6835 as a key support if 0.7000 caps.
Impulsive downside keeps Aussie under pressure
"24-HOUR VIEW: After our expectation for AUD to trade with a downside bias did not materialise two days ago, we highlighted yesterday that “the bias remains on the downside, but AUD still does not appear to have enough momentum to reach 0.6980.” However, in an abrupt move, AUD broke below 0.6980 and plunged to a low of 0.6908. The outsized selloff appears to be overdone, but there is no sign of stabilisation yet. Today, as long as 0.6960 (minor resistance is at 0.6935) is not breached, AUD could drop below 0.6900. Given the deeply oversold conditions, AUD is unlikely to be able to maintain a foothold below this level."
"1-3 WEEKS VIEW: We revised our AUD view to negative last Thursday (18 Jun, spot at 0.7025). We indicated that “downward momentum is increasing, and AUD is likely to drop toward the month-to-date low, near 0.6980.” AUD traded sideways for a few days, but in a sudden move yesterday, it staged a sharp drop that sent it plunging to a low of 0.6908. AUD closed lower by a whopping 1.22% at 0.6916. While the impulsive decline suggests further AUD downside, it remains to be seen if the major weekly support at 0.6835 (see 1-3 months view below) is within reach during this phase of weakness. On the upside, a break above 0.7000 would mean that the weakness is stabilising."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Oil prices dropped below $72.00 for the first time since the US-Iran war started.
- News from the Strait of Hormuz shows a significant increase in traffic through the corridor.
- Trump accused Oil firms of gouging consumers by keeping prices inflated.
Crude Oil prices keep trending lower, with the US benchmark West Texas Intermediate (WTI) barrel extending its decline below the $72.00 line on Wednesday, and reaching its lowest level since the UA and Israel attacked Iran in late February.
News reporting an increase in traffic through the Strait of Hormuz and the US decision to waive sanctions on Iran's crude during the 60-day ceasefire seem to have offset investors’ concerns about friction over nuclear inspections and doubts about the outcome of the peace deal.
Iran's nuclear inspections remain in the air
US President Donald Trump and Vice President JD Vance claimed that Iranian authorities agreed to allow entry to International Atomic Energy Agency (IAEA) inspectors to the country, although the Iranian Foreign Ministry Spokesperson, Esmaeil Baradei, said that there is no schedule for those inspections.
Meanwhile, the Strait of Hormuz Live Tracker, which monitors traffic through the Persian Gulf corridor, has reported 39 ships crossing the key waterway in the last 24 hours. This is still a fraction of the average 130 vessels passing through the corridor before the war started, but a sharp increase over the traffic seen before the US-Iran peace deal.
Beyond that, US President Donald Trump lashed out at oil firms in a post on Truth Social, accusing them of keeping fuel prices high at the pump despite the “lower prices they are paying for Oil.” He added that he has urged the Department of Justice (DOJ) to look for unfair commercial practices.
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.
ING’s Francesco Pesole notes that the US Dollar (USD) is benefiting from equity market turmoil and hawkish Federal Reserve (Fed) commentary, with safe-haven demand reinforcing its strength. He argues that while this may not mark a new long-term bullish USD cycle, near-term momentum remains positive. Pesole also warns that any future dovish repricing of the Fed curve could weaken the Dollar medium term.
Hard to pick a top
"The tech-led equity sell-off has started to significantly spill over into FX. Since the sentiment jitters originated in Asia and are centred on semiconductor stocks, the Aussie and Kiwi dollar have been hit hard, alongside SEK and NOK, which tend to underperform as liquidity dries up in risk-off conditions."
"The canonical safe havens USD, JPY, CHF are doing well, but only one – the dollar – can also offer an attractive domestic story from a growth and carry perspective."
"Whether this is a moderate correction in a stellar year for AI stocks or the start of a more prolonged equity downturn, USD should outperform while risk aversion holds. In the latter scenario, however, a potential dovish repricing in the Fed curve – if met with actual easing – could leave the greenback much weaker in the medium term."
"We still don’t think this is the start of a new bullish USD cycle, but near-term momentum remains bullish. Fespeak has also added support, with the generally neutral FOMC member Austan Goolsbee saying yesterday that inflation is too high and going the wrong way."
"US and Europe’s equity futures are stabilising this morning, suggesting consolidation may be more likely than another major leg higher in the dollar. But for now, we remain very cautious about picking a top in this USD move."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
The German IFO Institute Business Climate Index improves to 85.6 in June, as expected, from 85.0 in May, revised higher from 84.9.
The IFO Current Assessment Index arrives at 87, higher than 86.4 estimates and the previous reading of 86.0.
Expectations Index also improves to 84.1 from 83.9 in May, revised higher from 83.8. However, it missed 85.0 estimates.
Market reaction
There seems to be no immediate reaction by the Euro (EUR) towards German IFO sentiment data. At press time, EUR/USD trades 0.26% lower to near 1.1350 due to upbeat US Dollar (USD).
German economy FAQs
The German economy has a significant impact on the Euro due to its status as the largest economy within the Eurozone. Germany's economic performance, its GDP, employment, and inflation, can greatly influence the overall stability and confidence in the Euro. As Germany's economy strengthens, it can bolster the Euro's value, while the opposite is true if it weakens. Overall, the German economy plays a crucial role in shaping the Euro's strength and perception in global markets.
Germany is the largest economy in the Eurozone and therefore an influential actor in the region. During the Eurozone sovereign debt crisis in 2009-12, Germany was pivotal in setting up various stability funds to bail out debtor countries. It took a leadership role in the implementation of the 'Fiscal Compact' following the crisis – a set of more stringent rules to manage member states’ finances and punish ‘debt sinners’. Germany spearheaded a culture of ‘Financial Stability’ and the German economic model has been widely used as a blueprint for economic growth by fellow Eurozone members.
Bunds are bonds issued by the German government. Like all bonds they pay holders a regular interest payment, or coupon, followed by the full value of the loan, or principal, at maturity. Because Germany has the largest economy in the Eurozone, Bunds are used as a benchmark for other European government bonds. Long-term Bunds are viewed as a solid, risk-free investment as they are backed by the full faith and credit of the German nation. For this reason they are treated as a safe-haven by investors – gaining in value in times of crisis, whilst falling during periods of prosperity.
German Bund Yields measure the annual return an investor can expect from holding German government bonds, or Bunds. Like other bonds, Bunds pay holders interest at regular intervals, called the ‘coupon’, followed by the full value of the bond at maturity. Whilst the coupon is fixed, the Yield varies as it takes into account changes in the bond's price, and it is therefore considered a more accurate reflection of return. A decline in the bund's price raises the coupon as a percentage of the loan, resulting in a higher Yield and vice versa for a rise. This explains why Bund Yields move inversely to prices.
The Bundesbank is the central bank of Germany. It plays a key role in implementing monetary policy within Germany, and central banks in the region more broadly. Its goal is price stability, or keeping inflation low and predictable. It is responsible for ensuring the smooth operation of payment systems in Germany and participates in the oversight of financial institutions. The Bundesbank has a reputation for being conservative, prioritizing the fight against inflation over economic growth. It has been influential in the setup and policy of the European Central Bank (ECB).
Deutsche Bank strategists note that United States (US) equities experienced a classic risk-off session, with major indexes pressured by a sharp sell-off in chipmakers. The NASDAQ dropped more than the S&P 500 as semiconductor weakness dragged broader benchmarks lower. Despite the decline, some chip names remain strong year-to-date. US equity futures suggest a modest recovery following the prior session’s losses.
Semiconductor slump drives broader weakness
"Ahead of those overnight developments, markets saw a classic risk-off move yesterday, with equities sliding and bonds rallying."
"Given the importance of semiconductors for US equities, that dragged down the broader indices, with the NASDAQ slumping -2.21% yesterday, whilst the S&P 500 fell -1.44%."
"Indeed, the concentration of the decline was striking, as it was the first time this year that the S&P 500 was down more than 1% on a day when majority of companies in the index were actually higher."
"And this morning, US equity futures have risen, with those on the S&P 500 (+0.17%) pointing to a modest recovery after the index fell -1.44% yesterday, while Nasdaq 100 futures are up +0.39%."
"This decline included Sandisk (-13.64%) and Micron (-13.18%) as the two worst performers in the S&P 500 yesterday, though they remain among top four performers YTD."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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