Forex News
TD Securities’ commodity strategists, led by Bart Melek, note that Gold investors have sharply reduced long exposure as higher Oil prices from the US‑Iran conflict threaten recent disinflation progress. With markets increasingly pricing a late‑2026 Fed hike, higher carry and opportunity costs alongside a firmer US Dollar are expected to keep Gold near support around $3,900/oz, with speculative length likely to erode further.
Higher yields weigh on bullion positioning
"Gold investors aggressively cut their long exposure as it became apparent that the escalating US-Iran conflict will continue to keep oil prices at very elevated levels, which is set to reverse recent progress made on inflation."
"With the energy complex likely driving aggregate prices higher in the coming months, the market is increasingly pricing a Fed hike towards the end of the year."
"The resulting increase in carry costs, yield-driven opportunity costs and a firming US dollar will likely keep gold prices near support at $3,900/oz."
"Money managers have also reduced their long silver exposure, which will apply downward pressure on prices due to weakening industrial and investment demand."
"As such, both silver and gold length are likely to erode for now."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Brown Brothers Harriman’s (BBH) Elias Haddad expects the ECB to leave rates at 2.25% this week after June’s 25 bps hike, maintaining a data-dependent stance without new projections. Markets fully price a September hike and over 50 bps of tightening in twelve months, but the Haddad argues tighter policy with the Eurozone below potential is more likely to cap Euro downside than drive significant appreciation.
ECB on hold with hawkish pricing
"The ECB policy decision is Thursday. The ECB is widely expected to leave the policy rate unchanged at 2.25% after delivering a well-telegraphed 25bps hike in June. Eurozone CPI indicators are tracking slightly below the ECB’s baseline forecast while the rebound in energy prices are still traling the ECB’s base case assumption."
"The ECB is also poised to stick to its data-dependent, meeting-by-meeting approach without pre-committing to any particular rate path. There are no updated macroeconomic projections associated with this meeting."
"The swaps curve fully price in a 25bps hike in September and more than 50bps of tightening over the next twelve months to 2.75%. That would leave the policy rate near the top of the ECB’s estimated neutral range (1.75%-3.00%)."
"However, tighter monetary policy when the Eurozone economy is still operating below potential is more likely to limit EUR downside than push the currency higher because it raises the likelihood of a downward adjustment to ECB rate expectations."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- The New Zealand Dollar gains against the US Dollar, with NZD/USD trading around 0.5850, up 0.14% on the day.
- Expectations of a more accommodative Federal Reserve policy continue to support the Kiwi.
- Geopolitical tensions in the Middle East are limiting risk appetite without derailing the New Zealand Dollar's advance.
NZD/USD moves higher on Monday and trades around 0.5850 at the time of writing, up 0.14% on the day, as the US Dollar (USD) weakens following the latest US inflation data. Investors have scaled back expectations of further interest rate hikes from the Federal Reserve (Fed), weighing on the Greenback and supporting higher-yielding currencies.
The New Zealand Dollar (NZD) is also drawing support from monetary policy divergence with the Reserve Bank of New Zealand (RBNZ). New Zealand's central bank raised its Official Cash Rate earlier this month and signaled that further tightening remains likely if inflationary pressures persist. Several banks, including BBH and HSBC, believe that elevated inflation and an improving domestic economic outlook argue for additional rate hikes, a supportive factor for the Kiwi.
In the United States (US), data released last week showed slower Consumer Price Index (CPI) and Producer Price Index (PPI) inflation, reinforcing expectations that the Fed will keep interest rates unchanged at its next policy meeting. Markets now see a rate hold as the most likely outcome, although several Fed officials continue to call for caution regarding inflation risks.
In Asia, the People's Bank of China (PBoC) left its benchmark lending rates unchanged for a fourteenth consecutive month, a widely expected decision that had little impact on the New Zealand Dollar.
Geopolitical tensions continue to limit the upside for risk-sensitive currencies. Iran said intermediaries have delivered messages aimed at de-escalating tensions in recent days, while Yemen's Houthis announced a naval blockade against Saudi Arabia, adding to concerns over energy markets. So far, these developments have boosted demand for safe-haven assets without derailing NZD/USD's advance as the persistent weakness in the US Dollar remains the pair's main driver.
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 Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.21% | -0.02% | 0.05% | 0.16% | -0.42% | -0.08% | 0.28% | |
| EUR | -0.21% | -0.19% | -0.13% | -0.07% | -0.62% | -0.33% | 0.07% | |
| GBP | 0.02% | 0.19% | 0.07% | 0.14% | -0.43% | -0.12% | 0.24% | |
| JPY | -0.05% | 0.13% | -0.07% | 0.11% | -0.48% | -0.13% | 0.20% | |
| CAD | -0.16% | 0.07% | -0.14% | -0.11% | -0.57% | -0.23% | 0.10% | |
| AUD | 0.42% | 0.62% | 0.43% | 0.48% | 0.57% | 0.33% | 0.71% | |
| NZD | 0.08% | 0.33% | 0.12% | 0.13% | 0.23% | -0.33% | 0.34% | |
| CHF | -0.28% | -0.07% | -0.24% | -0.20% | -0.10% | -0.71% | -0.34% |
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).
Royal Bank of Canada’s (RBC) Abbey Xu notes that Canadian inflation eased in June, with Consumer Price Index (CPI) slowing to 2.8% year-over-year and energy prices reversing part of their earlier surge. Underlying measures such as CPI-trim and CPI-median dipped below 2%, and inflation breadth remained contained. Xu says this supports expectations that the Bank of Canada (BoC) will keep the overnight rate unchanged through 2026.
Cooling CPI backs steady BoC policy
"A pull-back in headline inflation was widely expected in June with oil prices moving lower in after surging earlier this year, but broader measures of price growth outside of energy prices also surprised on the downside."
"CPI excluding food and energy remained below target, while the Bank of Canada's preferred measures, CPI-trim and CPI-median, also dipped below 2%."
"Measures of inflation breadth were also contained, with limited evidence that earlier increases in input costs had spread significantly across the CPI basket."
"Overall, June's report was consistent with the Bank of Canada's latest assessment that underlying inflation remains close to target. Although the path for headline inflation remains highly sensitive to unpredictable global developments, contained broader price pressures and firming economic growth support our view that the Bank will keep the overnight rate unchanged through the remainder of 2026."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
United Overseas Bank’s (UOB) Quek Ser Leang reports GBP/USD slipping but lacking strong downside momentum, with intraday trade expected between 1.3420 and 1.3475. The prior bullish view has faded after a break of 1.3450 support, and the pair is now seen in a 1.3385–1.3495 range. Over 1–3 months, broader supports lie at 1.3210 and 1.3160.
Pound loses momentum and consolidates
"24-HOUR VIEW: We expected GBP to “trade in a range between 1.3450 and 1.3520” last Friday. We did not expect GBP to drop to 1.3427. Despite the decline, there has been no clear increase in downward momentum and the current price movements are likely part of a range-trading phase, expected to be between 1.3420 and 1.3475."
"1-3 WEEKS VIEW: We turned positive on GBP last Thursday (16 Jul, spot at 1.3540), indicating that “the renewed upward momentum suggests that GBP has resumed its advance.” We also indicated that “the level to monitor is 1.3590.” On Friday, GBP fell and broke below our ‘strong support’ level at 1.3450. The build-up in momentum has faded, and GBP has likely entered a range-trading phase between 1.3385 and 1.3495."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
TD Securities expects the Federal Reserve to keep the Fed funds rate unchanged through 2026, as inflation stays above target and the labor market stabilizes. The bank notes a mixed Fedspeak backdrop, a blurrier reaction function under new leadership, and judges that if policy changes this year, a hike is more likely than a cut.
Rates seen steady, hike risk skew
"June CPI came in far softer than expected last week, signaling underlying inflation is not yet running rampant."
"The report should ease near-term Fed inflation concerns, reinforcing our expectations that policy will remain on hold indefinitely. We have revised down our near-term CPI path, with core CPI ending at 2.6% y/y in 2026 Q4."
"Fedspeak before the blackout period painted a mixed picture on the policy outlook. Chair Warsh characterized last week's CPI report as good news, but far from "mission accomplished," while remaining relatively dovish on inflation risks."
"Waller was open to a July hike if CPI had surprised to the upside but is likely to support a hold after the soft report, while Hammack effectively signaled a dissent in favor of a hike and Logan remained hawkish; Jefferson, meanwhile, struck a more neutral tone."
"We expect the Fed to remain on hold over our forecast horizon. Inflation should remain high for the rest of the year, and the labor market has stabilized, allowing the FOMC to shift focus to its inflation mandate."
"If the Fed were to move this year, we believe that move is more likely to be a hike than a cut. Under a new management that espouses a blurrier reaction function, data dependence will gain prominence for determining the path ahead for monetary policy."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/CAD edges higher as softer Canadian inflation data weighs on the Canadian Dollar.
- Headline CPI falls 0.4% MoM in June, marking the sharpest monthly decline since December 2024.
- A firmer US Dollar and weaker Oil prices add pressure on the commodity-linked Loonie.
USD/CAD edges higher on Monday as softer-than-expected Canadian inflation data and a firmer US Dollar (USD) weigh on the Canadian Dollar (CAD), while tensions in the Middle East keep financial markets volatile. At the time of writing, the pair is trading around 1.4045, up 0.17% on the day.
Headline inflation fell 0.4% MoM in June, compared with market expectations for a 0.2% decline. The drop reversed May’s 1.0% increase and marked the sharpest monthly fall since December 2024.
On an annual basis, inflation eased to 2.8% from 3.2%, slightly below the 2.9% forecast.
The Bank of Canada’s (BoC) preferred core CPI rose just 0.1% in June after increasing 0.6% in May, while the annual rate edged down to 2.1% from 2.2%.
“Gasoline prices rose at a slower pace year over year in June compared to May, contributing most to the slowdown in overall CPI growth,” Statistics Canada said.
However, Oil prices have rebounded sharply since renewed hostilities in the Middle East, reviving inflation concerns. With core inflation still hovering near the BoC’s 2% target, the latest figures support the view that the central bank will maintain its current policy setting.
At its July meeting, the BoC raised its 2026 inflation forecast to 2.5% from 2.3% and said it expects inflation to return to the 2% target by early 2027.
On the geopolitical front, Iranian Foreign Ministry spokesperson Esmaeil Baghaei said on Monday that intermediaries had exchanged messages with Tehran in recent days and that any negotiations with the United States would be pursued based on Iran's national interests.
Oil prices and the US Dollar initially came under pressure as the comments raised hopes of renewed diplomacy. However, the Greenback later recovered all its losses after Reuters reported that Yemen’s Iran-aligned Houthis had declared an immediate naval blockade against Saudi Arabia. Oil prices, however, stayed lower, adding pressure on the commodity-linked Loonie.
West Texas Intermediate (WTI) crude Oil trades around $81.00, retreating from $84.42, its highest level in more than a month. Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades near 100.90 after recovering from an intraday low of 100.65.
Bank of Canada FAQs
The Bank of Canada (BoC), based in Ottawa, is the institution that sets interest rates and manages monetary policy for Canada. It does so at eight scheduled meetings a year and ad hoc emergency meetings that are held as required. The BoC primary mandate is to maintain price stability, which means keeping inflation at between 1-3%. Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Canadian Dollar (CAD) and vice versa. Other tools used include quantitative easing and tightening.
In extreme situations, the Bank of Canada can enact a policy tool called Quantitative Easing. QE is the process by which the BoC prints Canadian Dollars for the purpose of buying assets – usually government or corporate bonds – from financial institutions. QE usually results in a weaker CAD. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The Bank of Canada used the measure during the Great Financial Crisis of 2009-11 when credit froze after banks lost faith in each other’s ability to repay debts.
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 Bank of Canada purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the BoC stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Canadian Dollar.
BNY’s Geoff Yu notes that Iran’s signals of continued military response alongside active mediation keep the Middle East conflict in a managed but unstable phase. This backdrop leaves Oil prices higher after recent strikes, though the survival of a diplomatic track marginally supports broader risk sentiment. Markets are watching whether diplomacy can contain escalation risks.
Managed conflict underpins crude prices
"After nine days of strikes, Iran is still signaling a military response, but it is also keeping diplomacy alive. Foreign Ministry spokesman Esmaeil Baghaei said Tehran has received proposals from mediators aimed at preventing a wider conflict and rejected the idea that Iran faces a binary choice between negotiations and war."
"Spokesman Esmaeil Baghaei said diplomatic efforts had remained active in recent days and that Iran would continue talks aimed at halting U.S. actions even as its armed forces responded militarily. He rejected the idea that Tehran faces a simple choice between negotiations and war, arguing that both diplomacy and defense serve the same national interest."
"For markets, that keeps the conflict in a managed but unstable phase. Oil is still up after the strikes, but the survival of a diplomatic track is helpful for risk sentiment at the margin."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Brown Brothers Harriman’s (BBH) Elias Haddad expects Australia’s June labor force report to show a modest 15k job gain and unemployment steady at 4.4%, slightly above the Reserve Bank of Australia's (RBA) projection. Futures imply a 60% chance of one final 25 bps hike to 4.60%, but Haddad sees risks skewed toward a longer pause, citing below-potential Gross Domestic Product (GDP) growth and a cash rate already near the top of neutral estimates, weighing on Australian Dollar (AUD).
Jobs report and neutral rate cap upside
"The economy is projected to add +15k jobs vs. +40.3k in May and the unemployment rate is seen unchanged at 4.4% for a second straight month."
"That would be marginally higher than the RBA’s June unemployment rate projection of 4.2% and support the case for an extended pause to the bank’s tightening cycle."
"First, the RBA projects real GDP growth to be below potential over the next two years. Second, the RBA cash rate at 4.35% currently sits near the top of the range of model-based central estimates of the nominal neutral rate."
"RBA cash rate futures 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 which is a headwind for AUD."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
HSBC strategists see NZD/USD supported by New Zealand’s strengthening growth data and an aggressive Reserve Bank of New Zealand (RBNZ) hiking path. The RBNZ has begun raising rates and HSBC Economics projects 25bp hikes per quarter to 3.50% by Q3 2027. The stance is viewed as NZD-positive, though the currency’s high sensitivity to global growth and Middle East-related risks is highlighted.
Kiwi buoyed by policy but growth risks
"New Zealand’s growth upswing appears to be gaining traction, with retail sales rebounding, consumer sentiment improving and the PMI rising to 59.7 in June."
"The Reserve Bank of New Zealand (RBNZ) delivered its first hike in July, lifting its cash rate by 25bp to 2.50%."
"HSBC Economics expects 25bp of tightening per quarter, taking the cash rate to 3.50% in Q3 2027, while markets are pricing a faster path."
"We see the RBNZ’s stance as NZD-positive: it is priced to hike the most in G10 over the next year yet remains comfortably below the upper end of estimates for the neutral rate."
"Key risks stem from NZD’s high sensitivity to global growth, particularly if spillovers from the Middle East conflict weigh on activity, an exposure amplified by New Zealand’s high oil-to-GDP intensity among G10 net energy importers."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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