Forex News

Scotiabank strategists Shaun Osborne and Eric Theoret describe USD/CAD trading close to their fair value estimate around 1.3842 as the Canadian Dollar (CAD) reacts to trade headlines and weaker Oil prices. They note CAD downside may stay limited absent a major trade shock, while short-term technicals remain neutral with the broader downtrend intact but scope for a push towards the mid to upper 1.39s.

CAD trades near model fair value

"It’s been a bit of a trade whirlwind for the CAD since Friday—tariffs, counter tariffs, more tariffs and (somewhat surprisingly) the concession from VP Vance yesterday that talks are still going on."

"It is notable that Canada’s tariff response won’t take effect until early September while the US threat of 50% tariffs on all autos, auto parts and steel won’t land until January. There’s a built-in cooling off period in both cases."

"The CAD is marginally lower this morning but that may have as much (or more) to do with lower oil prices as with trade worries or other drivers."

"Front-end spreads are little changed on the session and the risk backdrop is positive. Spot is trading right about where our fair value estimate (1.3842 today) says it should be. Absent any major deterioration in the trade backdrop in the short run, downside pressure on the CAD may remain contained. "

"Neutral—Spot has edged a little above the 200-day MA (1.3843) but the broader technical picture remains little changed by the USD rebound. The downtrend in place since late June remains intact while daily and weekly trend oscillators remain bearish."

"There is a mild, bullish crossover evident on the intraday DMI oscillator which supports the outlook for some additional USD gains in the short run, however, and a push towards the mid/upper 1.39s. Support is 1.3825/30 and (stronger) 1.3775/85."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

ING’s Francesco Pesole notes the Dollar is drawing support from the US bond market as long-dated yields stabilise, while US-Canada trade tensions and Iran-related sanctions risks complicate the outlook. He argues renewed US-China trade frictions could hurt the Dollar, and sees downside risks dominating, although USD is expected to consolidate into the upcoming Jackson Hole event.

Dollar steadies with bond-led support

"The dollar continues to take cues from the US bond market, with a good session for the back-end allowing the greenback to find some support."

"CNBC reported yesterday that the Treasury may use its account at the Fed (TGA) to fund its buyback operations for long-dated debt."

"Our rates colleagues argue that this would not be a big deal for the bond market, as buybacks funded through bill issuance today versus buybacks funded by running down the TGA and issuing bills later are largely equivalent."

"Any serious revival of the US-China trade spat would be negative for the dollar in our view, mirroring last year’s USD correlation with the issue."

"The balance of risks for the dollar remains skewed to the downside, but our baseline is for further consolidation into the Jackson Hole risk event later this week."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Commerzbank’s Carsten Fritsch reports that Gold has surged to a three‑month high near USD 4,700 per ounce as US–Canada tariff tensions escalate and concerns over US debt intensify. Silver and Platinum have also rallied. Strong ETF inflows, particularly in North America, suggest sustained investor interest, and the bank sees indications that Gold prices will continue to rise.

Tariffs and ETFs support rally

"The rise in the price of gold continued at the start of the new trading week. Having already risen by more than 5% last week, the price reached almost USD 4,700 per troy ounce overnight, its highest level in more than three months."

"As in previous phases of escalation in the tariff dispute, the price of gold rose significantly, as this could further damage the US dollar’s reputation as a reserve currency and safe haven."

"According to the World Gold Council, gold ETFs recorded their strongest weekly inflows in 10 months, totalling 46.7 tons. Of this, 30.4 tons were attributed to North America and 13.8 tons to Europe."

"Given the current news situation, there are strong indications that ETF purchases will continue and that the price of gold will rise further."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• NZD/USD advances modestly on Tuesday, even as safe-haven demand supports the US Dollar.
• US-Iran tensions keep uncertainty elevated over the Middle East conflict and the Strait of Hormuz.
• Elevated inflation in New Zealand fuels expectations of a September rate hike and supports the Kiwi.

NZD/USD edges slightly higher on Tuesday and trades around 0.5965 at the time of writing, up 0.08% on the day. The pair withstands a firmer US Dollar (USD), which benefits from increased safe-haven demand as geopolitical tensions between the United States (US) and Iran remain at the center of market attention.

The US is stepping up economic pressure on Iran and its international trading partners. US Treasury Secretary Scott Bessent has outlined a strategy aimed at further isolating Tehran from the global economy, including sanctions targeting countries and entities that continue to trade with Iran.

US President Donald Trump has also warned that foreign entities have a limited period to end their commercial ties with Tehran or face US financial sanctions. However, the campaign is keeping markets uncertain, with investors questioning whether it will help bring the conflict closer to a resolution or instead prolong hostilities and delay the reopening of the Strait of Hormuz.

The resulting safe-haven demand supports the US Dollar and limits the advance in NZD/USD. However, the Greenback also faces headwinds after the US Treasury's decision to expand its buyback operations for longer-dated bonds. Scott Bessent could deploy up to $1 trillion from the Treasury General Account to finance these operations, a prospect that could affect US market liquidity and bond yields.

On the economic front, the latest US private employment data points to a modest improvement. The four-week average ADP Employment Change stands at 11.75K jobs per week for the period ending August 8, up from 9.5K previously. The acceleration suggests some recovery in private-sector hiring without triggering a significant move in the US Dollar.

Meanwhile, the New Zealand Dollar (NZD) remains supported by monetary policy expectations. Persistently elevated inflation reinforces the possibility that the Reserve Bank of New Zealand (RBNZ) could raise interest rates again in September, helping limit downside pressure on the Kiwi despite a geopolitical environment that remains unfavorable for risk-sensitive assets.

Investors now turn their attention to several major events in the United States. Consumer confidence data is due on Tuesday, followed by the Personal Consumption Expenditures (PCE) Price Index on Wednesday. Federal Reserve (Fed) Chair Kevin Warsh is then scheduled to speak on Friday at the annual Jackson Hole symposium, an event that could provide fresh clues about the path of US monetary policy.

NZD/USD technical analysis

In the one-hour chart, NZD/USD trades at 0.5964, holding a mild bullish bias as it consolidates above the 100-period simple moving average (SMA) at 0.5956 and the 200-period SMA at 0.5918. The pair has pushed through a recently broken downward trend-line around 0.5959, which now acts as nearby support, while the Relative Strength Index (RSI) around 55 suggests modest positive momentum rather than an overstretched rally.

On the downside, initial support is seen near the broken trend-line zone around 0.5959, followed by the 100-period SMA at 0.5956 and the horizontal floor at 0.5940, ahead of stronger backing from the 200-period SMA at 0.5918. On the topside, immediate resistance is located at the horizontal barrier around 0.5989, and a clear break above this level would open the way for a further recovery toward higher highs in the short term.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Brown Brothers Harriman’s (BBH) Elias Haddad notes the Australian Dollar (AUD) largely ignored the Reserve Bank of Australia's (RBA) August Minutes, which reiterated Governor Michele Bullock’s warning that another rate hike is quite possible. Futures imply around 60% odds of a final 25 bps hike to 4.60% by year-end. Haddad sees risks skewed toward an extended pause but highlights Australia’s attractive carry and strategic commodity exposure as key AUD tailwinds.

RBA path and AUD tailwinds

"AUD ignored the release of the RBA August meeting Minutes. The Minutes reinforced Governor Michele Bullock’s warning that another rate hike was “quite possible.”"

"According to the Minutes “Several members judged that it was quite possible that the upside risks to the inflation forecast would crystallise, requiring some further tightening.”"

"RBA cash rate futures continue to imply 60% odds of one final 25bps hike by year end to 4.60%."

"In our view, the risk is skewed towards a more extended pause in the RBA tightening cycle because policy is already somewhat restrictive."

"Still, Australia’s attractive carry alongside the country’s strategic exposure to commodities linked to energy, AI, and defense remain key AUD tailwinds."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Rabobank's Senior FX Strategist Jane Foley discusses the British Pound's (GBP) recent performance, noting it is currently the top G10 currency on a 1‑day view but only middling over longer horizons. Foley expects EUR/GBP to trade in a range over the coming weeks, with a mild upside bias later in the year as fiscal realism and reduced BoE rate hike risk weigh on Sterling.

Sterling resilience and fiscal constraints

"The pound is sitting pretty this morning as the top performing G10 currency on a 1-day view, though its performance in most other time frames can be better described as ‘middling’."

"There have been some better-than-expected UK economic data released in recent weeks. This means that the UK economy, along with that of the Eurozone, can be described as ‘resilient’ through Q2 and into the summer."

"We expect further range trading in EUR/GBP over the coming weeks, with a mild upside bias later in the year as fiscal realism weighs and BoE rate hike risk is further priced out."

"In view of the energy price crisis stemming from the Iran war, this is a better outcome than most forecasters had expected."

"It remains Rabobank’s central view that the MPC will continue to side-step a rate hike this year."

"Since the market still sees some risk of higher rates this year, steady policy, in line with our view, could undermine the pound."

"We maintain a 3-month EUR/GBP forecast of 0.87."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)