Forex News
OCBC’s Sim Moh Siong and Christopher Wong observe that while the European Central Bank (ECB) left rates unchanged in July and is expected to deliver at least one more 25 bp hike to 2.50% in September, rising energy prices still tilt terms-of-trade in favor of the US Dollar (USD) over the Euro (EUR). Europe’s status as a net energy importer versus the US as an exporter leaves the Euro more vulnerable to sustained Oil strength.
Energy terms-of-trade still favor Dollar
"Meanwhile, the ECB kept rates unchanged in July as expected and did not push back against market pricing for a 25bp hike in September."
"We continue to expect a final 25bp increase to 2.50% in September, although the risks are tilted towards an additional hike."
"Even with the ECB maintaining a hawkish bias amid rising energy prices, relative terms-of-trade dynamics favour the USD over the EUR."
"Europe remains a net energy importer, while the US is a net energy exporter, making the euro more vulnerable to sustained increases in oil prices."
"Energy-linked currencies such as NOK have outperformed, while net energy importers including NZD and SEK have lagged."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Commerzbank’s Bernd Weidensteiner expects the Federal Reserve to leave the policy rate at 3.50%–3.75% at the upcoming meeting, while debating potential hikes if inflation fails to ease. Weidensteiner’s baseline assumes core Personal Consumption Expenditures (PCE) Price Index slows toward a 2% path, allowing the Fed to avoid further tightening and possibly start cutting rates from mid‑2027, though higher Oil prices pose upside inflation risks.
Policy on hold, cuts seen in 2027
"The recent escalation in the Persian Gulf has led to another noticeable rise in oil prices. Even if core inflation remains stable, this could delay the decline in headline inflation during the summer months, increasing the risk of second-round effects."
"Even under these favorable assumptions—the monthly increase so far in 2026 has averaged 0.35%—the 2% mark would not be reached until spring 2027."
"The Fed is likely to keep its key interest rates unchanged again at its meeting next week. While the debate over a rate hike has gained momentum, the Fed might get lucky and avoid having to raise rates in the second half of the year if the inflation rate falls again."
"The Fed will first want to gain more clarity on inflation trends before seriously considering an interest rate hike. It will therefore likely leave the target range for its policy rate at 3.50%–3.75% at next week’s meeting."
"In this case, the Fed would likely refrain from raising interest rates and could even lower its policy rate starting in mid-2027."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Societe Generale strategists highlight that the Indian Rupee (INR) stayed defensive as Brent Oil rose to $100, countering support from recent policy steps to attract capital inflows. The Reserve Bank of India (RBI) intervened in onshore and offshore markets with USD/INR near record highs, while inflows of about $20bn were reported. Higher Oil prices and a rebound in 1Y INR OIS to 6.05% dominate sentiment.
Rupee pressured by Oil and rates
"In contrast, the INR remained on the defensive as Brent surged to $100/bbl, offsetting support from recent policy measures aimed at attracting capital inflows."
"The RBI stepped up intervention in both onshore and offshore markets as USD/INR traded close to the record highs in May."
"The central bank noted that measures announced alongside the June MPC meeting had generated around $20bn of inflows through FCNR deposits, external commercial borrowings and overseas foreign currency funding."
"However, rising oil prices have overshadowed the positive flow story."
"Reflecting this shift, the 1Y INR OIS has rebounded to 6.05%, retracing nearly 25bp from the post-RBI lows."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Deutsche Bank strategists note that the European Central Bank (ECB) kept its deposit rate at 2.25%, while its communication continued to leave the door open to further tightening. They now see a September increase to 2.50% as highly likely, with the risk of an additional hike if energy prices remain persistently elevated or evidence of second-round effects emerges.
ECB guidance underpins Euro rate expectations
"Staying with the ECB, in their latest policy decision yesterday they kept their deposit rate at 2.25% as widely expected, while implying that further hikes were still likely."
"Both the short decision statement and Lagarde’s press conference noted that the latest outlook was broadly unchanged relative to the ECB’s June baseline scenario which had been predicated on market pricing of three hikes this cycle (so two more after the June hike)."
"Lagarde also said yesterday that the ECB’s reaction function was "very well understood" by markets, showing no desire to push back on market pricing."
"Our European economists now see a September hike to 2.50% as a near done deal."
"Risks are clearly skewed towards a further hike thereafter, but this would require persistently elevated energy prices and/or evidence of second-round effects."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- NZD/USD rebounds modestly on Friday after falling to its lowest level in more than a week.
- Strong New Zealand inflation supports expectations of further Reserve Bank of New Zealand tightening.
- Geopolitical tensions and resilient US economic data continue to underpin the US Dollar ahead of next week's Fed meeting.
NZD/USD trades around 0.5790 on Friday at the time of writing, up 0.27% on the day as the pair recovers from a one-and-a-half-week low, although bullish momentum remains limited by the underlying strength of the US Dollar (USD).
The Greenback continues to draw support from rising geopolitical tensions in the Middle East after the United States (US) carried out another round of military strikes against Iran, while Iran and its allies responded with attacks targeting US-linked military assets across the region. Additional attacks on shipping routes in the Red Sea and the closure of the Strait of Hormuz have heightened concerns over global Oil supply disruptions, pushing energy prices higher and reviving inflation fears.
The prospect of higher energy-driven inflation reinforces expectations that the Federal Reserve (Fed) could keep monetary policy restrictive for longer and potentially deliver another interest rate hike before the end of the year. Thursday's Initial Jobless Claims data, which fell to 187K and significantly beat expectations, also highlighted the continued resilience of the US labor market, providing further support to the US Dollar.
At the same time, the New Zealand Dollar (NZD) finds support after stronger-than-expected inflation data reinforced expectations that the Reserve Bank of New Zealand (RBNZ) will continue tightening monetary policy, with markets still anticipating another rate increase at the September meeting.
Looking ahead, investors will focus on the preliminary S&P Global Purchasing Managers Index (PMI) data from the United States later on Friday. Beyond the headline figures, traders will closely monitor business sentiment and input price components for fresh clues on inflationary pressures ahead of next week's Federal Open Market Committee (FOMC) policy meeting, while NZD/USD is likely to remain driven primarily by broader US Dollar sentiment.
New Zealand Dollar Price Today
The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.09% | -0.05% | -0.03% | -0.04% | -0.33% | -0.25% | 0.00% | |
| EUR | 0.09% | -0.00% | 0.00% | -0.00% | -0.30% | -0.24% | 0.04% | |
| GBP | 0.05% | 0.00% | 0.02% | 0.00% | -0.28% | -0.21% | 0.05% | |
| JPY | 0.03% | 0.00% | -0.02% | 0.00% | -0.30% | -0.23% | 0.02% | |
| CAD | 0.04% | 0.00% | -0.00% | -0.00% | -0.30% | -0.24% | 0.03% | |
| AUD | 0.33% | 0.30% | 0.28% | 0.30% | 0.30% | 0.08% | 0.32% | |
| NZD | 0.25% | 0.24% | 0.21% | 0.23% | 0.24% | -0.08% | 0.25% | |
| CHF | -0.00% | -0.04% | -0.05% | -0.02% | -0.03% | -0.32% | -0.25% |
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 New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).
European Central Bank (ECB) Governing Council member and head of Lithuania's central bank, Gediminas Simkus, said during European trading hours on Friday that the chances of an interest rate hike in the near term are higher than maintaining the status quo. Simkus also ruled out fears of second-round effects of higher inflation.
Additional remarks
$100 oil will have repercussions on inflation.
Inflationary environment has increased.
No value in rushing with a decision now.
In September, again we'll have additional inflation data.
Still see probability of rate hike higher than hold.
We do not see second-round effects of higher inflation.
Inflation seen higher than target for a long time.
Market reaction
A slight recovery move is seen in the Euro (EUR) following ECB Simkus's remarks. At press time, EUR/USD trades 0.1% higher to near 1.1386.
(This story was corrected at 11:20 GMT to say in the last paragraph that EUR/USD trades 0.1% higher to near 1.1386, and not 1.3325.)
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger 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.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
According to Commerzbank’s Tatha Ghose, the Central Bank of the Republic of Türkiye (CBRT) kept its one-week repo rate at 37.0% and maintained the corridor at 35.5%-40.0%. With the repo window still closed, effective funding remains near 40%, which Ghose views as Lira-supportive. Renewed Oil price gains, rising inflation expectations and fragile FX reserves justify CBRT’s cautious stance.
High effective rate seen lira-positive
"Turkey’s central bank (CBRT) left its one-week repo rate at 37.0% yesterday, as unanimously expected; and also left the interest rate corridor unchanged at 35.5%-40.0%. The repo rate is still not the effective interest rate because CBT has kept the weekly repo window closed since the Iran shock, pushing funding towards the 40% overnight lending facility."
"Hence, we think that whenever CBRT officials hint at gradually bringing back repo, that will tantamount to a rate cut – and prove problematic for the exchange rate. CBRT did not provide such a signal, or hint about timing, yesterday, which counts as positive news."
"But, it was not entirely surprising given the renewed jump in oil prices. The statement cited rising energy prices and geopolitical uncertainty, while noting that the underlying inflation trend had softened slightly in June, but would rise again in July. This is precisely the problem. "
"June’s CPI data looked better in raw month-on-month terms, but even that still implied 1.8%m/m after seasonal adjustment. July may move back above 2%m/m, helped by administered price increases and the unwinding of the fuel tax discount."
"So the question is: should we still look back at an outdated data-point and be encouraged by it? Or, should we ignore it? Inflation expectations have worsened again, FX reserves are not yet comfortable, and the balance of payments remains vulnerable."
"For now, CBRT gave no immediate signal about when effective funding could be normalised back down from 40% to 37%. And that, by itself, has to count as lira-positive, at the margin."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- EUR/GBP trades around 0.8550 on Friday, little changed on the day.
- Flash PMIs from Germany, the Eurozone and the United Kingdom all beat market expectations.
- Risk aversion driven by Middle East tensions limits the reaction of European currencies.
EUR/GBP trades around 0.8550 at the time of writing on Friday, remaining broadly stable despite a series of stronger-than-expected economic releases from the Eurozone and the United Kingdom (UK). Investors continue to favor a cautious stance as escalating geopolitical tensions in the Middle East overshadow the positive macroeconomic data and keep currency market moves limited.
Preliminary S&P Global surveys point to a stronger-than-expected improvement in economic activity across Germany and the Eurozone. Germany's Manufacturing Purchasing Managers Index (PMI) jumps to 52.2 in July from 50.3 in June, well above the 50.1 consensus forecast. Germany's Composite PMI also returns to expansion territory at 51.2, supported by a strong rebound in manufacturing activity, while the services sector remains slightly below the 50 threshold.
Across the Eurozone, Manufacturing PMI also accelerates, rising to 52 from 51.4 and beating expectations of 51.3. Services activity also returns to expansion territory with a reading of 51.6, lifting the Composite PMI to 51.9, comfortably above market expectations. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said the Eurozone economy is enjoying a welcome revival in July, while warning that the geopolitical environment continues to cloud the outlook.
The British Pound (GBP) also draws support from stronger domestic data. UK Retail Sales rise by 1% MoM in June, defying expectations for a 0.3% decline. Meanwhile, the preliminary S&P Global surveys show the Services PMI returning to expansion at 51.8, while the Manufacturing PMI accelerates to 52.8, both exceeding market forecasts. As a result, the Composite PMI climbs to 52.1, pointing to stronger overall business activity at the start of the third quarter.
On the monetary policy front, European Central Bank (ECB) Governing Council member Martin Kocher said he sees no hard evidence of second-round inflation effects, while stressing that the ECB remains vigilant and stands ready to act should the inflation outlook deteriorate. He nevertheless acknowledged that recent developments in Oil markets remain a source of concern.
Despite the encouraging economic releases, the Euro (EUR) and the British Pound struggle to extend their gains. Concerns about the economic consequences of the conflict in the Middle East, higher energy prices and the latest tariff announcements from the US President Donald Trump administration continue to fuel risk aversion, supporting safe-haven assets and limiting moves in EUR/GBP.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.11% | 0.00% | -0.07% | -0.04% | -0.27% | -0.19% | -0.01% | |
| EUR | 0.11% | 0.07% | 0.00% | 0.02% | -0.23% | -0.14% | 0.05% | |
| GBP | -0.00% | -0.07% | -0.07% | -0.04% | -0.29% | -0.18% | -0.02% | |
| JPY | 0.07% | 0.00% | 0.07% | 0.03% | -0.22% | -0.13% | 0.04% | |
| CAD | 0.04% | -0.02% | 0.04% | -0.03% | -0.25% | -0.17% | 0.01% | |
| AUD | 0.27% | 0.23% | 0.29% | 0.22% | 0.25% | 0.10% | 0.25% | |
| NZD | 0.19% | 0.14% | 0.18% | 0.13% | 0.17% | -0.10% | 0.16% | |
| CHF | 0.00% | -0.05% | 0.02% | -0.04% | -0.01% | -0.25% | -0.16% |
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 Friday, according to FXStreet data. Silver trades at $58.40 per troy ounce, up 1.98% from the $57.27 it cost on Thursday.
Silver prices have decreased by 17.84% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 58.40 |
1 Gram | 1.88 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 69.50 on Friday, down from 70.72 on Thursday.
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 Chris Turner notes the US Dollar (USD) is supported as higher energy prices fuel expectations of further central bank tightening, with markets pricing more hikes from the European Central Bank (ECB) and Bank of England (BoE). While ING does not expect the Federal Reserve (Fed) to hike next week, Turner warns it is dangerous to fight the trend and sees US Dollar Index (DXY) potentially breaking above June’s 101.80 high.
Fed credibility and energy-driven support
"The dollar continues to perform well as high energy prices raise expectations for a central bank response."
"President of the ECB, Christine Lagarde, made it pretty clear yesterday that the central bank would be hiking in September, and markets now price a further 75bp of tightening for both the ECB and the Bank of England. That seems excessive, but is hard to fight unless energy prices turn sharply lower soon."
"Crucially – and after the June FOMC meeting – the market believes the Federal Reserve will have to respond as well. Since that June FOMC meeting, two-year real USD swap rates have risen 30bp as investors buy into the only message we have heard from the Fed – the need to restore credibility when it comes to fighting inflation."
"US data today is relatively light – just July S&P PMI readings and new home sales. But with US President Donald Trump threatening a fresh military onslaught on Iran, expect investors to hold onto their long dollar balances into the weekend. DXY is not far from June's 101.80 high and an upside break-out cannot be ruled out."
"While we do not think the Fed will hike next week, it remains very dangerous to fight this trend and, as we have been saying all week, we expect the dollar to outperform."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
