Forex News
- USD/CAD falls 0.53% to 1.3940 after a much weaker-than-expected US employment report.
- US payrolls turn negative in July, while sharp downward revisions to previous months deepen concerns over the labor market.
- The Canadian Dollar is supported by stronger-than-expected employment data and a lower unemployment rate.
USD/CAD declines sharply on Friday, trading around 1.3940 at the time of writing, down 0.53% on the day, hitting its lowest level since June. The pair remains under pressure after the release of a much weaker-than-expected US employment report, while Canadian data provides additional support to the Canadian Dollar (CAD).
The US Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls (NFP) fell by 23K in July, compared with market expectations for an increase of 80K. Revisions were also particularly significant, with Juen and May payrolls revised down by a combined 103K jobs. Despite this sharp deterioration, the Unemployment Rate edged down to 4.1% from 4.2%, while annual Average Hourly Earnings growth slowed to 3.2%, adding to evidence that the US labor market is gradually cooling.
Following the release, the US Dollar (USD) weakened sharply as investors scaled back expectations for monetary tightening by the Federal Reserve (Fed). According to the CME FedWatch Tool, the chance of a 25-basis-point rate hike at the September meeting fell to 42%, down from 55% a day earlier. Markets, however, continue to price in a high chance of at least one rate hike before the end of the year.
Comments from Fed Richmond President Thomas Barkin failed to support the Greenback. Barkin said the latest employment figures point more to a labor market characterized by low hiring and low firing than to an outright deterioration. He nevertheless noted that corporate earnings remain strong and that he is monitoring whether they eventually feed through to the labor market.
The Canadian Dollar also draws support from upbeat domestic data. Statistics Canada reported that the Unemployment Rate fell to 6.4% in July, below market expectations. Employment increased by 75.1K jobs, comfortably beating forecasts of 15K, while the Labor Force Participation Rate rose to 65.1%. These figures strengthen the Canadian currency and add further downside pressure on USD/CAD.
Other Canadian data released on Friday was more mixed. The Ivey Purchasing Managers Index (PMI) eased to 55.1 in July from 56.2 in June, missing market expectations of 55.5. Despite the softer-than-expected reading, the indicator remains comfortably above the 50 threshold, signaling continued expansion in business activity. However, the weaker PMI had little impact on the Canadian Dollar, as markets remained primarily focused on the stronger-than-expected employment report, which continued to underpin the Loonie.
USD/CAD slips below support as market awaits US CPI test for Fed pricing
According to TD Securities, the latest payrolls releases triggered a notable move in FX markets, with "payrolls data broke USD/CAD below 1.40," as contrasting US and Canadian outcomes drove a sharp reaction. The firm argues that the move has underscored that "the sharp USD/CAD reaction to the contrasting payroll outcomes suggests the market remains focused on both central-bank divergence and Canada's domestic outlook."
On the Canadian side, TD notes that "recent developments in the Canadian economy have evolved broadly in line with our forecasts," and that the data surprise was sufficient to "briefly pushing USD/CAD below the 1.40 support level." However, the team cautions that "we think the bearish USD momentum may not sustain unless US CPI also surprises lower to allow market to price out near-term Fed rate hiking odds." In their view, "sustained USD weakness will likely require softer US CPI," with "next week's US CPI report" flagged as "the next major test for near-term Fed rate hike pricing."
USD/CAD technical analysis
In the four-hour chart, USD/CAD trades at 1.3943, extending its retreat below the 100-period simple moving average (SMA) at 1.4057 and the 200-period SMA at 1.4119, which keeps the near-term bias bearish. The downward resistance trend line, now projected from the 1.4241 area with a break reference near 1.4072, reinforces the overhead supply together with the horizontal barrier at 1.4000, while the Relative Strength Index (RSI) slipping to 28 suggests the pair is entering oversold territory but not yet showing a clear reversal signal.
On the topside, initial resistance is seen at the 1.4000 horizontal line, followed by the 100-period SMA at 1.4057 and the descending trend-line reference near 1.4072, with the 200-period SMA at 1.4119 acting as a broader cap if a rebound extends. On the downside, the immediate focus sits on the horizontal support at 1.3900, where a decisive break would open the way for further losses, while holding above this floor would allow for a corrective bounce within the prevailing bearish structure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- DXY slides after Nonfarm Payrolls unexpectedly show 23K job losses.
- Treasury yields fall as September hike odds sink sharply.
- Focus shifts to CPI and PPI for inflation confirmation.
The US Dollar Index (DXY), which tracks the buck’s value against a basket of six currencies, is down 0.36% to 99.58 following a weaker-than-expected US jobs report. The DXY hit 99.41 after the jobs report release, its lowest level since June 15. The data has also eased pressures on the Federal Reserve (Fed) to hike rates, as inflation remains stubbornly above the Fed’s 2% goal.
DXY falls after July payrolls contracted, pushing yields lower and shifting attention to next week’s CPI
July Nonfarm Payrolls showed that the economy slashed 23K jobs from the workforce, below forecasts of an 80K jobs expansion. The figures for May and June were revised lower, with the former at 63K, down from 129K, and the latter at 20K, down from 57K. Although the report was negative, the Unemployment Rate ticked lower from 4.2% to 4.1%.
On the data, Richmond Fed Thomas Barkin said that the labor market is more low-hire, low-fire, and noted that corporate earnings “are quite strong.”
Following the data, US Treasury yields, particularly the 10-year T-note yield, fell by 3.5 basis points to 4.637%.
Fed expected to hold rates in September
Money markets trimmed expectations for a rate hike in September. The odds of a hold reversed from around 42% to nearly 70%, while the chances of a 25-basis-point increase eased from 58% to 30%, according to Prime Terminal data.
Traders' focus shifts towards the release of the US Consumer Price Index (CPI) for July next week, on Wednesday. Economists project inflation to drop from 3.5% to 3.4% YoY, and Core CPI to tick lower from 2.6% to 2.5% YoY.
A day after CPI, the Producer Price Index (PPI) is released, which is used to calculate the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index.
Next week's US economic calendar
US Dollar Index Price Forecast: Technical outlook
In the daily chart, Dollar Index Spot trades at 99.63, retaining a bearish near-term bias as it slips below the clustered simple moving averages (SMA) pack, whose latest composite reading sits near 100.57 and now acts as overhead resistance. Price is testing the rising support trend line around 99.63, highlighting a pivotal area where a daily close lower would reinforce the downside case, while the Relative Strength Index (14) at 36.19 hovers just above oversold territory, suggesting that selling pressure is still dominant but could be nearing fatigue.
On the topside, a recovery above the SMA cluster at 100.57 would be the first signal that the downside is easing, with the descending resistance trend line break level at 101.57 acting as the next barrier and capping any stronger rebound for now. On the downside, a sustained move below the rising support trend line at 99.63 would open the door for a deeper slide, while the RSI’s position near 36.19 hints that additional losses could become progressively harder to extend even as the broader technical structure remains under pressure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
Commerzbank’s Carsten Fritsch sees continued volatility in Brent as Strait of Hormuz negotiations remain unresolved and inventories tighten. Fritsch expects energy agency reports to support prices near term but project a significant decline once an agreement emerges, cutting their year-end Brent forecast to USD 75 per barrel from USD 80 previously.
Hormuz talks and low inventories
"Ultimately, everything remains up in the air and we think that it will still take some time until a final agreement is found. In our view, price fluctuations on the oil market are therefore likely to continue for a while. Once an agreement emerges towards the end of the year, however, the oil price is likely to fall significantly, as it did in the case of the recent hopes of an agreement."
"We have therefore revised down our price forecast for a barrel of Brent oil at year-end to USD 75 (previously: USD 80)."
"Next week, the three energy agencies will also take a look at developments on the physical oil market in their monthly reports, which should rather support prices."
"The shortfall is largest in US inventories of middle distillates: They are almost 12% below the usual level and are at their lowest for this time of year in 30 years."
"Nevertheless, any disruption is critical in an already tight market."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
ING’s Chief International Economist James Knightley notes that the weak July US jobs report has pushed market pricing away from a September Federal Reserve rate hike, with the Dollar softening and 2-year yields falling. He highlights that upcoming data – another jobs report, two CPI releases and the Jackson Hole Symposium – will be crucial for the Fed’s decision, but ING still expects an extended pause.
Markets scale back Fed hike odds
"The US jobs report for July was surprisingly weak, with payrolls falling 23k while there were 103K of downward revisions to the past two months' data, leaving the 3M average at 20,000. The unemployment rate fell to 4.1% from 4.2%, but not for good reasons. It was primarily because of a further drop in the participation rate – unemployed people leaving the workforce entirely. Average hourly earnings growth slowed to just 3.2% year-on-year from 3.5%."
"Reaction has been significant, with 2Y yields down 8bp and the dollar softening, while Fed funds futures contracts are now only pricing 10bp of a potential 25bp hike on 16 September. Today’s outcome supports our call for a prolonged pause from the Federal Reserve, but remember that ahead of the September FOMC meeting we have a further jobs report, two inflation prints and the Federal Reserve’s Jackson Hole Symposium"
"In terms of jobs, we would tentatively suggest a rebound is possible for August, but the Fed’s decision is more likely to come down to what happens on inflation. We expect next week’s July CPI to show headline prices rising 0.1% month-on-month and core prices rising 0.2%."
"Given we are expecting encouraging news on disinflation, we are consequently expecting the Fed to remain on hold well into 2027."
"Assuming we get a deal to reopen the Strait of Hormuz, that can feed through into lower gasoline prices and keep the disinflation trend in place through to year-end and beyond."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Thomas Barkin, President of the Federal Reserve (Fed) Bank of Richmond, participated in an online event hosted by the National Association for Business Economics on Friday. He said that the latest employment figures point to a labor market in weak balance rather than one in decline, describing the picture as low hiring alongside low firing. He added that corporate earnings remain strong and that he is watching them for signs of how they feed through to jobs.
Key takeaways:
Jobs data was very consistent with a sector in weak balance.
Jobs data is more low hire, low fire.
The jobs data doesn't feel very good, but it's where it is.
Corporate earnings are quite strong and growing nicely.
We're watching corporate earnings for linkages to the job market.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.30% | -0.31% | -0.47% | -0.57% | -0.49% | -0.38% | -0.59% | |
| EUR | 0.30% | -0.02% | -0.13% | -0.24% | -0.20% | -0.09% | -0.28% | |
| GBP | 0.31% | 0.02% | -0.11% | -0.25% | -0.18% | -0.07% | -0.28% | |
| JPY | 0.47% | 0.13% | 0.11% | -0.11% | -0.04% | 0.06% | -0.16% | |
| CAD | 0.57% | 0.24% | 0.25% | 0.11% | 0.06% | 0.19% | -0.04% | |
| AUD | 0.49% | 0.20% | 0.18% | 0.04% | -0.06% | 0.12% | -0.10% | |
| NZD | 0.38% | 0.09% | 0.07% | -0.06% | -0.19% | -0.12% | -0.21% | |
| CHF | 0.59% | 0.28% | 0.28% | 0.16% | 0.04% | 0.10% | 0.21% |
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).
ING Commodities Strategist Ewa Manthey highlights that Copper has surged back near record highs as traders accelerate shipments into the US ahead of potential import tariffs, tightening physical markets and draining LME inventories. She notes constrained mine supply, low treatment charges and strong electrification-related demand, but warns that any policy disappointment or narrower-than-expected tariffs could trigger a correction and partially unwind recent gains.
Tariff expectations and market tightness
"Copper is trading above $14,000/t, close to its record high. At the same time, LME inventories have fallen further, and the cash-to-three-month spread has moved deeper into backwardation, highlighting increasingly tight physical market conditions."
"Copper shipments into the US have accelerated ahead of a potential tariff decision, pushing COMEX inventories to a record high. US copper imports exceeded 200,000 tonnes in July alone – the highest monthly level in at least 12 years."
"At the same time, the London copper market is showing increasing signs of tightness. LME inventories have fallen to a five-month low, while the cash-to-three-month spread has widened to around $120/t backwardation– up from about $40 a week ago and the widest since October, pointing to a squeeze on short-term supplies."
"Mine supply growth remains constrained, while low treatment charges continue to point to tight concentrate availability. Demand linked to electrification, power grid investment and AI infrastructure also remains supportive. We continue to expect the global refined copper market to record a deficit of around 35k tonnes in 2026."
"Much of the recent rally reflects expectations that tariffs will be implemented broadly as expected. But if the final measures are delayed, narrower than expected or exempt refined copper, part of the recent rally could unwind. Stockpiling into the US would slow, inventory flows would begin to normalise, and some of the current tightness outside the US would ease. Any correction could be amplified if investors unwind positions built on tariff expectations."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
TD Securities economists Robert Both and Emma Lawrence highlight a strong Canadian labour market, with July employment up 75k and unemployment at 6.4%. Despite employment outpacing population growth and the employment rate at its highest since February 2025, they expect the Bank of Canada to stay on hold through 2026, returning to neutral policy in early 2027.
Jobs outpace population, BoC still patient
"The Canadian labour market was firing on all cylinders in July with another 75k jobs created to easily surpass expectations (TD & market) for another 20k print, as the unemployment rate fell another 0.1pp to 6.4% (lowest since 2024) despite a 0.1pp increase to the participation rate."
"Details were upbeat, with the private sector leading job growth and an even split between full/part-time employment. Hours worked rose 0.6% m/m, while wage growth slowed to 3.0% y/y with help from base-effects."
"The Bank of Canada was reluctant to embrace the recent stabilization at its last policy decision, where it acknowledged the job growth over May/June but repeated that labour market conditions remain soft. With job growth outpacing the population over the last six months, we could see the Bank shift its tone in September."
"However, there is still material slack in the economy even with a 6.4% unemployment rate, and with core inflation running below 2% the Bank can stay patient. We still look for the Bank to stay on hold through 2026, with a return to neutral in early 2027."
"On the CAD side, recent developments in the Canadian economy have evolved broadly in line with our forecasts. While the data surprise is briefly pushing USD/CAD below the 1.40 support level, we think the bearish USD momentum may not sustain unless US CPI also surprises lower to allow market to price out near-term Fed rate hiking odds."
"The sharp USD/CAD reaction to the contrasting payroll outcomes suggests the market remains focused on both central-bank divergence and Canada's domestic outlook. On the USD side, next week's US CPI report will be the next major test for near-term Fed rate hike pricing."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Societe Generale’s Dev Ashish reports that Banxico left its policy rate at 6.50%, signalling an extended pause as inflation hovers near target and real rates sit close to neutral. The bank now sees inflation converging to target in 4Q27, while external risks from Oil prices and a potentially hawkish Federal Reserve argue against further easing, keeping Mexican rates on hold for an extended period.
Banxico signals prolonged neutral stance
"Banxico kept the policy rate unchanged at 6.50% and reiterated guidance favouring an extended pause."
"Middle East-driven oil price risks and a potentially hawkish Fed reduce the scope for further policy easing."
"We continue to expect Banxico to keep rates on hold for an extended period."
"As widely expected, the Bank of Mexico kept its policy rate unchanged at 6.50%, with the current growth-inflation mix and external backdrop justifying a policy stance that is neither overtly accommodative nor restrictive."
"Overall, the August decision strengthens the case that the easing cycle has ended."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- Silver climbs nearly 4% as weak US payrolls pressure the US Dollar and Treasury yields.
- XAG/USD strengthens above the 50-day SMA, while rising RSI and MACD readings point to firm bullish momentum.
- The $65 mark caps the immediate upside, with a break higher bringing the 100-day SMA near $69 into focus.
Silver (XAG/USD) jumps nearly 4% on Friday as buying accelerates following a decisive break above the 50-day Simple Moving Average (SMA) near $62. At the time of writing, the grey metal trades around $63.94 after briefly testing the $65 psychological mark.
The advance comes after disappointing US Nonfarm Payrolls (NFP) figures drag the US Dollar (USD) and Treasury yields lower. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.50, down nearly 0.45% on the day.
The US economy lost 23K jobs in July, even though experts had expected an increase of 80K. The job growth for June was also revised down to 20K from the previously reported 57K.
As a result, traders quickly trimmed bets on a September Fed rate hike, with the probability falling to around 42% from 67% a week ago, according to the CME FedWatch Tool. Lower interest rates reduce the opportunity cost of holding non-yielding assets such as Silver.
Technical analysis: Daily chart
On the daily chart, XAG/USD holds a bullish near-term bias as price stands above the 21-day and 50-day Simple Moving Averages (SMAs). Momentum backs the constructive tone, with the Relative Strength Index (RSI) rising into the low-60s and the Moving Average Convergence Divergence (MACD) indicator extending further into positive territory with a firm bullish spread and expanding histogram.
On the topside, initial resistance is aligned at $65, ahead of the 100-day SMA barrier at $69. A sustained break above this cluster would open the way toward the higher horizontal resistance near $75.
On the downside, immediate support is found at the 50-day SMA at $62, followed by the psychological horizontal floor at $60. Below there, the 21-day SMA at $58 and the lower horizontal level at $55 form a deeper demand zone.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
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.
