Forex News

UOB’s Quek Ser Leang and Lee Sue Ann highlight that USD/CNH was little changed on Monday around 6.7652, but the underlying tone has softened. They expect the pair to drift lower intraday within 6.7595–6.7690 rather than stage a sharp decline. Over coming weeks, their negative view persists, with scope for a move toward 6.7500 unless 6.7800 strong resistance is breached.

Soft tone points to gradual CNH strength

"24-HOUR VIEW: Yesterday, USD traded between 6.7627 and 6.7708, closing largely unchanged at 6.7652 (+0.01%). Despite the relatively quiet price action, the underlying tone has softened. That said, this is likely to lead to USD drifting lower within a range of 6.7595/6.7690 rather than a sustained decline."

"1-3 WEEKS VIEW: Tracking our negative USD view from early last week, in our previous update from last Friday (29 May, spot at 6.7740), we highlighted that “downward momentum remains mild, but there is room for USD to decline further to 6.7620.” USD subsequently edged to a low of 6.7605. Downward momentum remains mild, but the decline has not stabilised. Overall, only a breach of 6.7800 (‘strong resistance’ previously at 6.7900) would indicate that the decline has stabilised. Until then, USD could continue to edge lower. The next level to watch is 6.7500."

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

• EUR/USD trades at 1.1631, virtually unchanged after peaking at 1.1655.
• JOLTS vacancies jump, easing fears over US labor weakness.
• ECB officials signal timely action as inflation tops forecasts.
• NFP, ISM Services and Beige Book headline this week.

The Euro (EUR) consolidates within familiar levels on Tuesday, flatlining around 1.1630 as the US Dollar (USD) recovers some ground, underpinned by high Oil prices amid halted US-Iran talks, even though US President Donald Trump says this is fake news.

EUR/USD flatlines as Oil risks counter AI-fueled risk appetite

Risk appetite is positive, driven by the AI frenzy. However, uncertainty around the US and Iran negotiations, and the resumption of hostilities between Israel and Hezbollah, drive ebbs and flows towards the safety of the Greenback

The US Dollar Index (DXY), which measures the US Dollar against six currencies, is flat at 99.17. The US 10-year Treasury note yield is up one bps to 4.461%.

Data in the US showed that April’s Job Openings and Labor Turnover Survey (JOLTS) job vacancies rose to 7.618 million from 6.866 million, well above the 6.88 million forecast.

Cleveland Fed's Beth Hammack noted that the “job data indicates stability” and that the “unemployment rate is near full employment levels.” However, she expressed ongoing concerns about inflation, suggesting that the Fed might need to act “soon” if inflation persists.

In Europe, inflation across the bloc exceeded expectations, driven by high energy and services prices, but the Euro barely blinked. The European Union (EU) Harmonized Index of Consumer Prices (HICP) in May rose by 3.2% YoY, up from 3%, aligned with forecasts.

Some European Central Bank (ECB) policymakers crossed the wires. ECB’s Olli Rehn said that a June rate move would be an insurance hike, even though he stated that inflation expectations remain anchored. ECB Gediminas Simkus noted that inflation expectations are similar to four years ago, stressing the importance of reacting in a “timely manner.”

Traders are focusing on Friday's release of May’s Nonfarm Payrolls report, while Wednesday will see market interest in the Fed’s Beige Book and the ISM Services PMI.

In Europe, the docket will feature Flash PMIs, the Producer Price Index (PPI) and speeches by ECB officials.

EUR/USD Price Forecast: Technical outlook

In the daily chart, EUR/USD trades at 1.1630, holding a modestly bearish near-term bias as it sits under the clustered triple simple moving average (SMA) at 1.1667. The pair still hovers above an upward support trend line projected from the 1.1592 break area, but soft momentum, with the 14-period Relative Strength Index (RSI) around 45, hints that bounces may struggle while prices remain capped beneath these overhead averages and descending resistance lines.

On the topside, immediate resistance is seen at the triple SMA near 1.1667, with a more substantial barrier aligning with the higher downward resistance trend line around the 1.1804 break zone. On the downside, initial support emerges from the rising trend line tied to the 1.1592 break level, while a deeper setback would expose the former resistance trend structure that now acts as a broader floor around 1.1219.

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

OCBC's strategists Sim Moh Siong and Christopher Wong lower their Indonesian Rupiah (IDR) forecasts despite Bank Indonesia’s (BI) larger-than-expected 50 bp hike, arguing that renewed domestic policy uncertainty and an unfavourable external backdrop are weighing on IDR. They see elevated Oil prices, geopolitical risks and higher developed-market yields pressuring high-beta Asia FX, with a durable IDR recovery needing clearer policy signals and external relief.

Policy uncertainty and oil weigh on Rupiah

"IDR remains under pressure despite BI’s larger-than-expected 50bp hike. "

"The move underscored BI’s commitment to IDR stability, but its impact has been diluted by renewed domestic policy uncertainty, including plans to tighten state control over key commodity exports — a move that may support revenue collection and FX reserves over time, but could unsettle investor confidence near term."

"The external backdrop remains unfavourable, with elevated oil prices, geopolitical risks and higher DM yields weighing on oil-importing, high-beta Asia FX."

"We are lowering our IDR forecasts to reflect this tougher mix."

"Further BI tightening may help anchor sentiment, but a durable IDR recovery likely requires clearer domestic policy signals and relief from oil, geopolitics and global yields."

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

Philip Wee at DBS Group Research has raised his USD/PHP year-end 2026 forecast to 62.7 from 57.8, reflecting persistent external and domestic pressures. The closure of the Strait of Hormuz and higher Oil prices have widened trade deficits and pushed inflation well above target. Bangko Sentral ng Pilipinas (BSP) has reversed earlier easing but is reluctant to repeat the large hikes of 2022 amid weaker growth.

Peso outlook darkens with external shocks

"We have revised our USD/PHP forecasts, now projecting it to end 2026 around 62.7, up from our previous estimate of 57.8."

"USD/PHP first traded above 60 one month after Operation Epic Fury led to the Strait of Hormuz’s closure, triggering higher energy prices and supply disruption."

"Given its heavy reliance on imported oil from the Gulf, the Philippine economy was hit by the return to record trade deficits and a surge in inflation."

"CPI inflation surged to 7.2% YoY (2.6% MoM) in April from 4.1% YoY (1.4% MoM) in March, forcing the BSP to reverse February 19’s 25 bps rate cut into a 25-bps hike to 4.50% on April 23."

"BSP sees this Friday’s inflation rising to 7.1-7.9% in May, further above its 2-4% target range."

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

Here is what you need to know for Wednesday, June 3:

The US Dollar Index (DXY) strengthened near the 99.20 price zone after the latest JOLTS Job Openings report surged to 7.618 million in April from 6.887 million in March, well above market expectations of 6.88 million.

Meanwhile, markets also digested news that United States (US) President Donald Trump signed an executive order promoting artificial intelligence innovation and security, including measures to strengthen cybersecurity standards across government agencies.

EUR/USD trades muted near the 1.1630 area as broad US Dollar (USD) strength pressures the shared currency. Traders remain focused on incoming Eurozone data and European Central Bank (ECB) commentary for additional clues about the region's economic outlook.

GBP/USD elevated slightly toward the 1.3470 region as the stronger Greenback dominates market sentiment. Additional pressure emerged after comments from Bank of England (BoE) Monetary Policy Committee (MPC) member Megan Greene warned that households and businesses are increasingly sensitive to inflation and argued that the risks of failing to act against persistent inflation outweigh the risks of tightening policy too aggressively.

USD/JPY advances toward the 159.90 zone amid a broader USD strength. The Japanese Yen (JPY) remains under pressure as widening yield differentials continue to favor the US Dollar, despite lingering expectations that the Bank of Japan may continue to normalize policy gradually.

AUD/USD climbs toward the 0.7180 level as Investors are now turning their attention to Australia's upcoming Q1 Gross Domestic Product (GDP) report and S&P Global Purchasing Managers Index (PMI) releases, which could provide fresh clues about the health of the Australian economy and the Reserve Bank of Australia's policy outlook.

Gold trades little changed near the $4,490 area as the stronger US Dollar and rising Treasury yields reduce demand for the non-yielding precious metal.

West Texas Intermediate (WTI) Oil trades near the $93.60 region as markets balance resilient US economic data against concerns about global demand.

What’s next in the docket:

Wednesday, June 3:

• Spain Services PMI
• Germany PMI
• Eurozone PMI
• Eurozone PPI
• US ADP Employment Change 4-week average
• US PMI
• US Factory Orders
• AU Trade Balance

Thursday, June 4:

• CH CPI
• Eurozone Retail Sales
• US Challenger Job Cuts
• US Initial Jobless Claims
• US Nonfarm Productivity
• US Unit Labor Costs
• JP Labor Cash Earnings

Friday, June 5:

• Eurozone GDP
• Eurozone Employment Change
• CA Employment Report
• CA Average Hourly Wages
• CA Unemployment Rate
• US Nonfarm Payrolls
• US Unemployment Rate
• US Average Hourly Earnings
• US Labor Force Participation Rate
• CA Ivey PMI

• The Australian Dollar is among the day's top-performing majors even as a batch of domestic data disappointed.
• China's firmer factory activity and resilient Iron Ore prices are carrying the move, not anything homegrown.
• The carry trade behind the rally is crowded and already fully priced.

The Australian Dollar (AUD) is sitting near the top of the major currency leaderboard, adding close to 0.3% on the day and pushing back toward 0.7200 after defending 0.7150. Almost none of that strength is homegrown. Tuesday's local data was a mess and the Aussie climbed anyway, which tells you the move is coming out of Beijing and the commodity complex, not from the Australian economy itself.

The home front is quietly ugly

Building Permits for April fell 3.4% MoM against expectations for a 1.5% drop, a soft print only flattered by a low prior base. Company Gross Operating Profits contracted 1.3% quarter-on-quarter (QoQ) in Q1 against a 0.5% consensus gain, and the Current Account deficit widened past A$27 billion, wider than the A$23 billion expected. None of this is the profile of a currency that should be leading the pack; on a normal session it would have the Aussie on the back foot.

Beijing does the heavy lifting

The offset is China. Monday's RatingDog China Manufacturing Purchasing Managers Index (PMI) for May came in at 51.8, easing from April's five-year high of 52.2 but still topping the 51.4 consensus, enough to remind the market why the Aussie still trades as the cleanest liquid proxy for Chinese growth. That private read flatters the picture, though. The official National Bureau of Statistics (NBS) Manufacturing PMI for May, out Sunday, sat exactly on the 50.0 line, matching consensus and softer than April's 50.3, so the large state-owned factories it captures are neither growing nor shrinking. The bid under the Aussie is leaning on the smaller private firms, not the broad official gauge. Iron Ore, Australia's signature export, has held above US$109 per tonne, well above the US$90 to US$100 range many analysts had budgeted for the year, and with the big miners near record highs and Copper firm, the commodity channel is doing what the soft local data could not.

The crowd is already long

There is a rates story too, and it is the part most exposed to a re-rating. The Reserve Bank of Australia (RBA) has hiked three times this year to a 4.35% cash rate, comfortably above the Federal Reserve (Fed) target, and the market now prices roughly an 80% chance of another 25 basis point move, to 4.60%, by August. That hawkish path is consensus, not an edge, so plenty of good news is already in the price. Positioning says the same: speculative net long Aussie bets have built to multi-year extremes, the kind of one-sided crowd that unwinds quickly on a single disappointment, much as it did when a similar setup cracked in early 2025. And it is happening while the US Dollar is not even weak, with the Dollar Index (DXY) firm on safe-haven and energy flows as US-Iran tensions flared and Crude Oil pushed higher. The Aussie is climbing into a bid Dollar, on a fully-priced rate story, with the crowd already leaning the same way: a lot has to keep going right.

What the charts actually say

On the daily chart the pair holds above its 50-day Exponential Moving Average (EMA) near 0.7150 and well above the 200-day EMA around 0.6900, so the uptrend off the April low is intact. Momentum is less convincing: the daily Stochastic Relative Strength Index (Stoch RSI) has rolled toward the mid-20s even as price holds firm, while the five-minute Stoch RSI sits close to overbought after the bounce back toward the highs. The constructive bias holds while 0.7150 does, the zone that now also captures the rising 50 EMA. A break and hold above 0.7200 opens the late-May high region toward 0.7300, with 0.7250 the first hurdle; losing 0.7150 shifts focus to the 0.7100 handle. With a commodity-and-carry rally this stretched, the swing factors are the China headlines and the crowd's pain threshold, not the local numbers.

The real tests are still ahead

The marquee event lands Wednesday at 01:30 GMT, when Australia reports Q1 Gross Domestic Product (GDP). Consensus looks for 0.5% QoQ and 2.7% YoY, a step down from the prior 0.8% pace. The RBA's hawkishness is inflation-driven, with first-quarter inflation near 3.8% and the oil shock on top, not growth-driven, so a soft GDP print would leave the bank tightening into a slowing economy and the carry trade leaning on a rate path the data is undercutting. RBA Governor Bullock then speaks Thursday at 05:00 GMT, where any hint she is weighing sticky inflation against weaker activity will matter more than today's tape. Tonight's S&P Global and Ai Group surveys at 23:00 GMT are second-order.

AUD/USD 5-minute chart

Standard Chartered’s Tommy Wu reports that the bank’s revamped Renminbi Globalisation Index shows higher global RMB usage in February–April 2026 versus late 2025. The index, rebased to January 2015, rose to 224.8 in April from 212.1 in January, indicating usage has more than doubled over roughly a decade. Policy support and geopolitical factors are key drivers, with Hong Kong central to RMB internationalisation efforts.

Index revamp highlights rising RMB usage

"We have revamped the Standard Chartered Renminbi Globalisation Index (RGI), our proprietary measure of international Renminbi (RMB) usage, to better capture the relative importance and representativeness of its index components. We rebase the index to January 2015 (100); use a broader measure of cross-border payments; and change the weighting method for the index components."

"The revised RGI model shows increased RMB usage in February-April compared to the previous three months. The index picked up to 224.8 in April from 212.1 in January, which also indicates that RMB usage has more than doubled versus a decade or so ago."

"The recent RGI rise partly reflects increased global RMB usage for settlements due to the Middle East conflict, and partly initiatives by mainland China and Hong Kong to promote RMB internationalisation."

"China’s recent actions to curb unauthorised capital outflows are unlikely to affect its RMB internationalisation ambitions, as outlined in the 15th Five-Year Plan (FYP); rather, we expect the mainland and Hong Kong authorities to increase the range of RMB assets for investment, and continue to actively promote global RMB usage."

"Additionally, an increase in Dim Sum bond issuance and a broadening of the China and overseas issuer bases have supported offshore RMB bond market momentum."

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

MUFG’s Michael Wan argues that strong AI-related demand and semiconductor exports are offsetting Strait of Hormuz spillovers for some Asian markets, especially South Korea. He highlights hawkish Bank of Korea signals, robust exports and inflation, and expects South Korean rates to stay sticky. MUFG sees USD/KRW moving toward 1400 over the next 12 months.

AI tailwinds and hawkish BOK support

"While Asia’s markets continue to gyrate around the rollercoaster of US-Iran negotiations, what's important to note is that the positive impact of AI has offset the negative spillovers from the Strait of Hormuz for some Asian markets – in particular South Korea and Taiwan, and to a smaller extent Singapore and Malaysia."

"What’s notable for South Korea were hawkish comments by BOK Governor Shin Hyun-song, which essentially seemed like he was prepping markets for a July rate hike."

"In particular, he said that strong semiconductor exports have boosted growth rates and eliminated the dilemma for BOK around monetary policy, with many indicators including household debt and exchange rates pointing in the same direction."

"With the inflation numbers coming in stronger than expected at 3%yoy and exports in May on a working day adjusted basis coming in at a phenomenal 60%yoy, it does seem like it’s still an environment for South Korea rates to remain sticky moving forward."

"On our end, we think that will change and KRW is one of our top picks from an FX perspective moving forward, given cheap valuations, a more hawkish BOK, the gravity defying exports, a likely further improvement in the current account surplus, coupled with improvement in earnings expectations likely to offset resident outflows over time."

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