Forex News
- Silver could drop further as rising US-Iran tensions stoke energy inflation fears, keeping Fed interest rates higher for longer.
- Trump threatened further airstrikes and a naval blockade following recent oil tanker attacks in the Strait of Hormuz.
- FOMC Meeting Minutes reveal policymakers are split over keeping the 3.6% interest rate steady or raising it.
Silver price (XAG/USD) inches higher after three days of losses, trading around $58.30 per troy ounce during the Asian hours on Thursday. The price of non-yielding white metal could drop even further as renewed tensions between the United States (US) and Iran are sparking fears of energy-driven inflation, which will likely push the Federal Reserve to keep interest rates higher for longer to bring prices down.
The US President Donald Trump stated on Wednesday that an interim agreement to end the conflict with Iran was officially "over," stoking concerns that a renewal of war could again drive inflation and push up interest rates. Trump also threatened a second day of airstrikes and vowed to reimpose a US naval blockade in retaliation for recent attacks on oil tankers transiting the Strait of Hormuz.
The minutes of the Fed’s June 16-17 meeting released Wednesday showed that a few policymakers said there was a case for hiking rates, though they ultimately supported the decision to leave rates on hold. The minutes reflected growing concern among Fed officials over inflation just as worries about the labor market slightly receded. Swap traders are now pricing the likelihood of a rate hike at the next Fed meeting at more than 30%, up from less than 20% last Thursday, according to the CME FedWatch tool.
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.
Iranian Parliament speaker Mohammad Bagher Ghalibaf warned the United States (US) after two days of renewed US strikes, saying that any U.S. military action will prompt retaliation. Ghalibaf emphasized that access to the Strait of Hormuz remains under Iranian control.
“America still hasn’t learned that bullying and breaking promises are no longer cost-free. Let me put it plainly: if you strike, you’ll get hit. Don’t flail around pointlessly, or you’ll sink even deeper: the Strait of Hormuz will only open with ‘Iranian arrangements,’ not American threats,” said Ghalibaf on X.
The Kuwaiti military said on Thursday that the country’s air defenses are intercepting “hostile missile and drone attacks,” and Kuwait is responding to 'hostile’ missile, drone attacks. Meanwhile, missile alerts are sounding in Bahrain and Qatar after the US launched fresh airstrikes against Iran.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is down 0.79% on the day at $73.95.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
- EUR/USD trades with a positive bias for the second straight day, though it lacks bullish conviction.
- The USD remains on the defensive in the absence of a hawkish surprise from the FOMC Minutes.
- Rising US-Iran tensions offer some support to the safe-haven USD, capping the upside for the pair.
The EUR/USD pair attracts some buyers for the second straight day, though it lacks follow-through and remains confined within the previous day's range during the Asian session on Thursday. Spot prices currently trade around the 1.1420 area, up less than 0.10% for the day, and remain at the mercy of the US Dollar (USD) price dynamics.
The USD Index (DXY), which tracks the Greenback against a basket of currencies, remains on the defensive below the weekly top, touched on Wednesday, amid reduced expectations for Federal Reserve (Fed) rate hikes. Against the backdrop of last week's soft US Nonfarm Payrolls (NFP) report, the Minutes of the June 16-17 FOMC meeting revealed that policymakers noted high uncertainty about the outlook on interest rates.
However, Fed officials indicated that some policy firming would likely be warranted to return inflation to 2%. According to the CME Group's FedWatch Tool, traders are still pricing in around a 70% chance that the US central bank will raise borrowing costs in September. This, along with a fresh escalation of tensions between the US and Iran, acts as a tailwind for the safe-haven USD and acts as a headwind for the EUR/USD pair.
The US military unleashed a new wave of strikes against Iran in retaliation for Tehran’s attacks on commercial ships in the Strait of Hormuz. Iran retaliated by targeting approximately 85 US military installations and assets across Bahrain and Kuwait. Adding to this, US President Donald Trump said on Wednesday that the memorandum of understanding with Iran aimed at ending the conflict in the Middle East is now over.
Meanwhile, European Central Bank (ECB) rate hike bets have recently faced downward pressure in the wake of an unexpected fall in Eurozone inflation. This might hold back traders from placing aggressive bullish bets on the shared currency, which could further cap gains for the EUR/USD pair. Traders now look to the release of ECB Monetary Policy Meeting Accounts and the US Weekly Initial Jobless Claims for a fresh impetus.
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the 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.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- AUD/USD remains steady despite China's weaker-than-expected June CPI data slowing down from previous figures.
- FOMC Meeting Minutes reveal policymakers are split over keeping the 3.6% interest rate steady or raising it.
- Escalating US-Iran conflict fuels safe-haven demand and pushes rate hike expectations past 30%.
AUD/USD gains ground after remaining flat in the previous day, trading around 0.6930 during the Asian hours on Thursday. The currency pair maintains its position as the Australian Dollar (AUD) moves little following the Consumer Price Index (CPI) inflation data release from New Zealand’s close trading partner, China. Market attention will shift toward the US weekly Initial Jobless Claims report for further direction.
The National Bureau of Statistics (NBS) of China reported that inflation came in at 1.0% year-over-year (YoY) in June, against the 1.2% in May. The market consensus was for 1.1% in the reported period. CPI inflation arrived at -0.3% MoM in June versus a decline of 0.1% prior, softer than the expectation of a 0.2% fall.
Meanwhile, the US Dollar (USD) faces headwinds following the release of Wednesday's Federal Reserve (Fed) Meeting Minutes. The committee remains deeply divided over the trajectory of inflation, specifically whether it will remain sticky or begin to cool as geopolitical conflict in the Middle East eases.
Notably, during Kevin Warsh’s debut meeting as FOMC Chairman on June 16-17, policymakers were split: while many participants noted the benchmark rate would likely finish the year unchanged or slightly below its current 3.6% level, an equally vocal contingent argued that rates would need to move higher by year-end.
However, the Greenback's downside may be limited. Renewed tensions between the US and Iran are stoking energy-driven inflation fears, boosting safe-haven demand for the USD. This geopolitical friction has reinforced expectations that the Fed may lock in higher interest rates for longer to combat stubborn price pressures. According to the CME FedWatch tool, swap traders have raised the probability of a rate hike at the next Fed meeting to over 30%, a sharp jump from less than 20% just last week.
Adding fuel to the fire, US President Donald Trump stated on Wednesday that an interim agreement to end the conflict with Iran was officially "over." The US President also threatened a second day of airstrikes and vowed to reimpose a US naval blockade in retaliation for recent attacks on oil tankers transiting the Strait of Hormuz.
(The story was corrected on July 9 at 01:20 GMT to say in the last paragraph that Trump stated on Wednesday, and not on Thursday.)
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
- NZD/USD holds gains following CPI inflation data from China.
- China’s June CPI rose 1.0% YoY and fell 0.3% MoM, missing expectations and slowing from May's inflation figures.
- FOMC Meeting Minutes reveal policymakers are split over keeping the 3.6% interest rate steady or raising it.
NZD/USD extends its gains for the second successive day, trading around 0.5720 during the Asian hours on Thursday. The pair holds gains as the New Zealand Dollar (NZD) remains stronger following the Consumer Price Index (CPI) inflation data release from New Zealand’s close trading partner, China.
The National Bureau of Statistics (NBS) of China reported that inflation came in at 1.0% year-over-year (YoY) in June, against the 1.2% in May. The market consensus was for 1.1% in the reported period. CPI inflation arrived at -0.3% MoM in June versus a decline of 0.1% prior, softer than the expectation of a 0.2% fall.
The NZD/USD pair appreciates as the US Dollar (USD) continues to lose ground following the release of Wednesday's Federal Reserve (Fed) Meeting Minutes. The committee remains deeply divided over the trajectory of inflation, specifically whether it will remain sticky or begin to cool as geopolitical conflict in the Middle East eases.
During Kevin Warsh’s debut meeting as FOMC Chairman on June 16-17, policymakers were split: while many participants noted the benchmark rate would likely finish the year unchanged or slightly below its current 3.6% level, an equally vocal contingent argued that rates would need to move higher by year-end.
However, renewed tensions between the US and Iran are stoking energy-driven inflation fears, which could boost safe-haven demand for the Greenback. This geopolitical friction has reinforced expectations that the Fed may lock in higher interest rates for longer to combat stubborn price pressures. According to the CME FedWatch tool, swap traders have raised the probability of a rate hike at the next Fed meeting to over 30%, a sharp jump from less than 20% just last week.
US President Donald Trump stated on Wednesday that an interim agreement to end the conflict with Iran was officially "over." The US President also threatened a second day of airstrikes and vowed to reimpose a US naval blockade in retaliation for recent attacks on oil tankers transiting the Strait of Hormuz.
Economic Indicator
Consumer Price Index (YoY)
The Consumer Price Index (CPI), released by the National Bureau of Statistics of China on a monthly basis, measures changes in the price level of consumer goods and services purchased by residents. The CPI is a key indicator to measure inflation and changes in purchasing trends. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Renminbi (CNY), while a low reading is seen as bearish.
Read more.Last release: Thu Jul 09, 2026 01:30
Frequency: Monthly
Actual: 1%
Consensus: 1.1%
Previous: 1.2%
Source: National Bureau of Statistics of China
China’s Consumer Price Index (CPI) climbed 1.0% in June from a year ago after arriving at a rise of 1.2% in May, the National Bureau of Statistics of China reported on Thursday. The market consensus was for 1.1% in the reported period.
Chinese CPI inflation arrived at -0.3% MoM in June versus a decline of 0.1% prior, softer than the expectation of a 0.2% fall.
China’s Producer Price Index (PPI) rose 4.1% YoY in June, following a 3.9% increase in May. The data came in line with the market consensus.
Market reaction to China’s CPI, PPI data
The China-proxy Australian Dollar (AUD) edges slightly lower following the China’s CPI and PPI data. At the press time, the AUD/USD pair is down 0.01% on the day to trade at 0.6927.
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
- GBP/USD gains ground to around 1.3395 in Thursday’s Asian session.
- Fed officials were split on the direction of interest rates at the June meeting, minutes showed.
- The US launched new airstrikes on Iran.
The GBP/USD pair gathers strength near 1.3395 during the Asian trading hours on Thursday, bolstered by fading domestic political uncertainty. However, hawkish minutes from the Federal Reserve (Fed) and renewed tensions between the US and Iran might support the US Dollar (USD) and cap the upside for the major pair.
Following the resignation of Keir Starmer in late June, UK political risk has eased significantly, lifting the Cable. The formal race to replace outgoing Prime Minister Keir Starmer begins on July 9. Frontrunner Andy Burnham is widely expected to become Prime Minister by July 20.
The release of minutes from the Fed’s June meeting, which was Chairman Kevin Warsh’s first, reflected a divided central bank not sure how to proceed on rates without more information on inflation.
The minutes said that “many participants indicated that the appropriate level of the federal funds rate would be within or slightly below the current target range at the end of this year,” while also saying that “many other participants, however, assessed that the appropriate level of the federal funds rate would be above the current target range.”
Early Thursday, the US launched new airstrikes hitting Iran, sparking retaliatory Iranian fire targeting Bahrain, Kuwait and Qatar in a crossfire that again threatened an interim deal aimed at finding a way to end the war gripping the Persian Gulf.
The US military hit a variety of military sites and port facilities on Wednesday following Iran’s targeting of several merchant vessels off the coast of Oman, sparking Iranian fire then as well. Escalating tensions in the Middle East could boost a safe-haven currency such as the Greenback and create a headwind for the major pair.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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