GBP/USD se drží poblíž 1,3325, i když britská data byla silnější, než se čekalo. Scotiabank ale upozorňuje, že libra dál naráží na politickou a fiskální nejistotu.
The Pound to Dollar exchange rate held near 1.3325 on Friday, having retreated more than two cents from July’s high around 1.3558.
GBP/USD is still around 0.6% higher this month, but Sterling has struggled to respond to a stronger run of UK economic data.
Over the past year, the pair has traded between approximately 1.3010 and 1.3858.
Scotiabank noted that June retail sales were far stronger than expected, while the preliminary July business surveys also surprised positively.
The manufacturing PMI rose to 52.8, signalling a solid expansion, while the services index recovered from contraction territory to 51.8.
Despite the upbeat figures, the bank said “market participants are clearly not responding to fundamentals”, with political uncertainty and concerns over the UK’s fiscal position continuing to weigh on the Pound.
Attention now turns to next Thursday’s Bank of England meeting. Rates are expected to remain unchanged, but Scotiabank anticipates a hawkish hold alongside updated economic forecasts.
Markets currently price around 16 basis points of tightening by September and 32 basis points by November.
Pound Sterling could gain if policymakers strengthen the case for a rate rise at the following meeting.
The options market is sending a more cautious signal, however, with demand increasing for protection against renewed GBP weakness.
Scotiabank linked the shift to geopolitical risks and domestic political concerns, both of which have pushed gilt yields higher.
The bank’s technical outlook remains neutral.
GBP/USD has slipped below the support previously expected near 1.3350, leaving 1.3300 as the immediate level to watch.
Stronger support is located at 1.3150, with resistance around 1.3550.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The Euro remains supported by expectations of further ECB tightening, but EUR/USD is still struggling to escape the lower end of its July range. EUR/USD traded close to 1.1371 at the end of the latest session, leaving the pair near July’s low after a subdued week for the single currency.
The Euro has fallen in six of the past eight completed sessions and is down around 0.4% for July, having retreated from a monthly high near 1.1481 to within one cent of June’s 1.1325 low.
Both ING and Nordea expect the European Central Bank to maintain a hawkish bias, with further interest-rate increases still likely.
However, neither the rate outlook nor the latest ECB meeting has generated enough momentum to push EUR/USD out of its narrow trading range.
ING expects the pair to remain supported by higher Eurozone rates, but retains a near-term downside bias towards 1.1380.
Nordea goes further, forecasting three additional 25-basis-point rate increases that would lift the ECB deposit rate from 2.25% to 3.00% by March 2027.
Latest — Exchange Rates:
Euro to Dollar (EUR/USD): 1.137117 (-0.05%)
Pound to Dollar (GBP/USD): 1.332498 (+0.09%)
Dollar to Yen (USD/JPY): 163.85169 (0.00%)
ING Sees September Hike Remaining in Play ING had expected the ECB to leave rates unchanged while preserving the hawkish market pricing already embedded in Eurozone interest rates.
Its baseline was for a hawkish hold, with policymakers attempting to prevent inflation expectations from becoming unanchored as European gas and global energy prices remain elevated.
“The aim today could be – once again – to preserve market pricing to limit the risk of inflation expectations de-anchoring,” says ING FX strategist Francesco Pesole.
ING argued that achieving this might require a clear indication that a September rate increase remained possible, either through the press conference or subsequent guidance.
The bank noted that the market had already priced approximately 45 basis points of tightening by the end of 2026, setting a relatively high hurdle for the ECB to deliver an additional Euro-positive surprise.
“The hawkish bar set by the market via pricing isn’t low,” says Pesole.
ING nevertheless expected a firm ECB stance to limit the downside for short-dated Eurozone rates and, by extension, the Euro.
The difficulty is that supportive rate differentials have not translated into a decisive EUR/USD advance.
“A central bank meeting would normally be a prime catalyst for EUR/USD to break out of its tight trading range, but we do not expect that to happen,” ING says.
The bank retained a near-term downside bias, arguing that currency markets remained too relaxed about the potential consequences of further escalation in the Gulf.
“Unless the newsflow becomes more constructive, we look for EUR/USD to slip towards 1.1380 in the coming days.”
That target has already been reached, with the pair ending the latest session near 1.1371.
Nordea Forecasts Three More ECB Rate Increases Nordea believes the ECB remains in a genuine tightening cycle rather than delivering one or two isolated increases.
The bank forecasts 25-basis-point hikes in September, December and March 2027, which would raise the deposit rate to 3.00%.
“The ECB did not touch rates today, but the message was in line with more rate hikes to come,” Nordea says.
“Our updated forecast still sees three more rate increases, but at a quarterly pace as opposed to a faster speed before.”
Nordea says the ECB’s latest communication left the door “wide open” to a September increase.
It highlights the central bank’s assessment that energy prices remained close to the assumptions used in its June forecast, which showed core inflation staying above 2% throughout the projection period even with two further rate increases already included.
The bank’s conviction does not depend on another major escalation in the Middle East or a renewed surge in oil.
Instead, Nordea expects broader price pressures and a relatively resilient Eurozone economy to keep the ECB tightening for longer.
“We think that we are amidst a hiking cycle rather than one or two isolated rate moves, and continue to expect the ECB to raise rates three more times.”
The bank has slowed the expected pace of tightening because oil prices have fallen from their earlier highs and the growth outlook has become less certain.
A rapid improvement in the geopolitical backdrop could reduce the need for further action, while a prolonged conflict and renewed energy-price increase could produce faster or additional rate increases.
Image: Nordea chart showing 25-basis-point ECB hikes in September, December and March 2027, taking the deposit rate to 3.00% - Courtesy of Nordea. Energy Inflation May Take Time to Spread Nordea argues that markets and policymakers may still be underestimating the delayed second-round effects of higher energy costs.
Its research notes that during the previous inflation cycle it took several months for rising energy prices to feed into food, goods and services inflation.
It also took considerably longer for forward inflation expectations to peak than for spot inflation itself.
“We still see risks biased towards more second-round impact on inflation than what markets and the ECB expect,” Nordea says.
This possibility supports the case for further tightening even if the immediate increase in oil and gas prices begins to reverse.
The bank also points to inflation expectations that remain above the ECB’s target across several measures.
Its report shows five-year market inflation expectations around 2.26%, while household and large-company measures remain closer to 2.9%.
Nordea expects Eurozone growth of approximately 1% in 2026, although it acknowledges that the risks are tilted to the downside.
The bank nevertheless says the economy has remained more resilient than weak purchasing managers’ surveys would suggest.
Manufacturing output and retail sales increased in the available April and May data, while second-quarter growth may have been around 0.3%.
Nordea expects household consumption to remain the primary source of positive growth, supplemented by investment in technology and defence.
EUR/USD Technical Outlook Despite the increasingly hawkish ECB outlook, the EUR/USD chart shows little evidence of sustained buying momentum.
The pair is trading close to 1.1371, below its 20-period moving average near 1.1372 and beneath session VWAP around 1.1381.
It also remains below the 200-period moving average near 1.1392, leaving the immediate intraday structure tilted to the downside.
EUR/USD attempted to recover towards 1.1390 during the latest session but failed to sustain the move.
The retreat confirms a band of resistance between approximately 1.1380 and 1.1392, with the 1.1400 level providing the next major barrier.
RSI stands around 44, having recovered from levels close to 30.
This indicates that selling pressure has eased and the pair is no longer oversold, but momentum remains below the neutral 50 threshold.
The technical picture is therefore consistent with consolidation near the lows rather than the start of a convincing Euro recovery.
Initial support is located around 1.1368, followed by July’s low near 1.1362.
A sustained break below that area would expose the June low around 1.1325.
On the upside, EUR/USD must first recover above 1.1375 and 1.1381.
A move through the 1.1390-1.1400 region would provide the first meaningful evidence that the Euro is developing greater breakout power.
Image: EUR/USD 15-minute chart showing support at 1.1362, resistance at 1.1380 and the 1.1390-1.1400 breakout zone Why ECB Hikes Have Not Lifted the Euro The lack of a stronger EUR/USD response reflects the fact that much of the hawkish ECB outlook is already priced into the market.
Nordea notes that almost a full rate increase is priced by September, another is largely priced by December and part of a further hike is reflected in March 2027 contracts.
This leaves limited room for interest-rate expectations to move further in the Euro’s favour without a fresh inflation shock or more forceful ECB guidance.
The US Dollar also retains support from higher US rates, geopolitical uncertainty and the risk that elevated energy prices eventually damage global risk appetite.
ING says the current low-volatility environment may be underestimating how quickly Dollar demand could return if financial markets lose their tolerance for higher oil and gas prices.
The Euro is therefore receiving support from ECB tightening expectations, but not enough to overcome simultaneous demand for the Dollar.
Euro Forecast 2026: Latest Bank Projections ING and Nordea both see a hawkish ECB, but the implications for EUR/USD remain restrained.
Nordea expects three further rate increases and a 3.00% deposit rate by March 2027, while ING believes policymakers will keep a September hike in play and defend current market pricing.
These forecasts should limit the risk of an immediate collapse in the Euro.
However, the rate outlook is already heavily reflected in market prices, while geopolitical and energy risks continue to favour the Dollar.
EUR/USD therefore remains vulnerable while below 1.1390-1.1400.
A break beneath 1.1362 would expose the June low near 1.1325, while only a sustained recovery above 1.1400 would suggest that hawkish ECB expectations are finally generating a meaningful upside breakout.
Kurz EUR/CHF vystoupal na zhruba 0,9304, nejvýše od ledna. UBS říká, že bezpečný přístav švýcarského franku slábne a čeká obchodování na nebo nad 0,93.
The Euro to Swiss Franc exchange rate has strengthened to around 0.9304, its highest closing level since January and close to July’s peak at 0.9315.
EUR/CHF has gained 0.8% this month and 1.3% in June, extending its recovery from the March low near 0.8981.
The pair nevertheless remains below the 12-month high around 0.9454 recorded in August 2025.
UBS believes the Swiss Franc’s traditional safe-haven appeal has faded since the opening phase of the Iran conflict, when EUR/CHF briefly fell below 0.90.
The bank says most major central banks responded to higher inflation with tighter policy, while the Swiss National Bank remained far from raising rates because domestic inflation stayed contained.
This divergence has widened the Swiss Franc’s yield disadvantage and weakened its performance against other G10 currencies.
According to UBS, “the Swiss franc’s perceived ‘safe-haven’ appeal has faded”, with the currency failing to strengthen during subsequent escalations in the Middle East.
UBS expects the Franc to underperform the Euro on both a spot and total-return basis.
The Euro offers a yield advantage of roughly 2.5%, while European fiscal stimulus should support growth and encourage greater demand for higher-returning assets.
The bank forecasts EUR/CHF at 0.93 in September, December, March and June, describing the longer-term trend as sideways.
It expects resistance around 0.9350 and sees the market establishing a new medium-term equilibrium close to current levels.
UBS added: “We expect EURCHF to trade at or above 0.93.”
A renewed global recession or sharp increase in risk aversion would threaten that view by restoring demand for the Franc, while stronger risk appetite and greater use of CHF-funded carry trades could push EUR/CHF higher.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Rabobank expects renewed pressure on Pound exchange rates as concerns over Prime Minister Andy Burnham’s spending plans unsettle the gilt market. The British Pound concluded this trading week facing a difficult combination of political uncertainty, elevated UK bond yields and doubts over how the new government intends to fund its policy agenda.
UK economists at Rabobank say the initial market response to Burnham’s cabinet and early policy announcements has been notably cautious.
Latest — Exchange Rates:
Pound to Euro (GBP/EUR): 1.171822 (+0.14%)
Pound to Dollar (GBP/USD): 1.332498 (+0.09%)
Euro to Dollar (EUR/USD): 1.137117 (-0.05%)
The UK 10-year gilt yield has moved above 5.0%, while Pound Sterling has ranked as the weakest G10 currency over the latest one-day period.
Although the appointment of an experienced Chancellor has offered some reassurance, the bank warns that uncertainty surrounding the government’s fiscal strategy could keep both gilts and the Pound under pressure.
Rabobank analysts expect EUR/GBP to rise to 0.8650 over the next three months and sees scope for GBP/USD to fall back towards 1.3200.
At current rates, those forecasts imply a weaker Pound against both the Euro and the US Dollar.
Rabobank Warns Burnham’s Honeymoon Could Be Brief Rabobank says the appointment of Healey as Chancellor is a stabilising factor because the country’s finances have been placed in the hands of an experienced politician with previous Treasury exposure and respect across Parliament.
However, the larger question is how Burnham plans to finance his agenda.
The Prime Minister has said he intends to use “flexibility” within the fiscal rules, which Rabobank says could point towards placing some infrastructure-related debt on the balance sheets of public financial institutions.
Although such borrowing might sit outside the most closely watched fiscal measures, it would still need to be absorbed by the bond market.
“The market will be wary about whether this constitutes ‘back door’ funding,” Rabobank says.
The government’s first cost-of-living measure is a reduction in VAT on household electricity bills from October.
Officials have indicated that the measure will be funded by cancelling the previous government’s digital identity programme, although reports have raised doubts over whether that scheme was fully funded in the first place.
Rabobank notes that use of greater flexibility within the fiscal rules could potentially mobilise an additional £16 billion for infrastructure projects over the remainder of the decade.
Infrastructure investment could improve productivity in parts of the UK outside London and the South East, but those benefits may take years to materialise.
Burnam, by contrast, faces a general election in less than three years.
That leaves the government under pressure to deliver visible improvements quickly, increasing the risk that spending commitments expand before the economic benefits become apparent.
“The market is now bracing itself for a list of further announcements,” Rabobank says.
“This suggests that funding issues will remain at the fore of the market’s mind and hints that Burnham’s honeymoon may be short-lived.”
Gilt Market Particularly Sensitive The latest UK borrowing figures were slightly better than expected for June, but borrowing over the first three months of the fiscal year remains above projections from the Office for Budget Responsibility.
At an early stage of the financial year, that overshoot might ordinarily attract limited attention.
Rabobank argues that the political backdrop makes investors more sensitive than usual.
Burnham is associated with the softer left of the Labour Party and has said he wants government to become less reliant on what he described as the “imperial” Treasury.
Against this backdrop, the bond market is likely to demand clear reassurance that new spending plans will remain compatible with the fiscal rules.
Rabobank also highlights structural vulnerabilities in the UK economy.
The country has a low household savings ratio and a substantial current-account deficit, increasing its dependence on overseas capital.
These characteristics can amplify market reactions when confidence deteriorates.
“The UK may not have the largest debt-to-GDP ratio in the developed world, but arguably it has one of the most sensitive debt markets,” Rabobank says.
Lower BoE Expectations Are Another Pound Risk The reduction in VAT on household electricity bills should mechanically lower inflation.
Rabobank also expects headline UK CPI inflation to ease to 2.7% year on year, offering some short-term reassurance to the gilt market.
The inflation outlook remains complicated by higher spot energy prices following the escalation in the US-Iran conflict, but Rabobank believes current Bank of England pricing is too aggressive.
Markets are pricing approximately 43 basis points of BoE tightening over the next six months.
Rabobank expects the central bank to avoid raising rates this year.
“On our view, this is overdone and a reduction in market expectations for BoE policy tightening is another headwind for the pound,” the bank says.
This is important because elevated UK interest-rate expectations have provided Sterling with some protection against fiscal and political concerns.
Were investors to remove those expected rate increases, the Pound would lose part of its yield advantage at the same time as the gilt market remains uneasy about government borrowing.
Image: Exchange Rates UK Research polling shows GBP/USD median bank forecast chart showing the live rate near 1.3325, a Q3 median near 1.32 and the longer-term forecast path GBP/USD Forecast: 1.3200 Comes Back Into View GBP/USD ended the latest session around 1.3325, recording a modest daily gain after Thursday’s 0.47% decline.
The pair has nevertheless fallen by more than two cents from the 15 July close near 1.3540 and remains well below July’s high of 1.3558.
The short-term chart shows Sterling attempting to stabilise around 1.3320 after repeated failures to sustain advances above 1.3340.
GBP/USD is trading close to the 20-period moving average at 1.3327 and session VWAP near 1.3323.
That positioning suggests the pair is currently balanced around its immediate fair-value area rather than developing a strong recovery.
The 200-period moving average near 1.3340 remains the more important overhead barrier.
A recent rebound failed close to that level, confirming the 1.3340-1.3350 region as the first substantial resistance zone.
RSI has recovered to approximately 48 from below 40, showing that downside momentum has eased.
However, the indicator remains below 50 and does not yet signal that buyers have regained control.
Initial support is located around 1.3310, followed by 1.3290.
Rabobank’s 1.3200 objective would come into clearer view following a break below these levels, while July’s low at 1.3221 represents a significant intermediate support area.
On the upside, a sustained move above 1.3340 would reduce immediate downside pressure, although GBP/USD would still need to recover through 1.3400 to suggest the broader July correction has ended.
Image: GBP/USD 15-minute chart with 1.3310 support, 1.3340 resistance and Rabobank’s 1.3200 forecast marked The median bank forecast path also points to near-term weakness before a later recovery.
The Q3 2026 median projection is close to 1.3200, broadly matching Rabobank’s three-month forecast, while the consensus path then rises towards 1.35 in early 2027 and approximately 1.38 by the end of that year.
Rabobank’s view is therefore consistent with the wider consensus in anticipating near-term pressure, although it does not rule out a longer-term recovery.
Image: EUR/GBP survey poll forecasts July 2026 EUR/GBP Forecast: Rabobank Targets 0.8650 EUR/GBP closed around 0.8534 after falling 0.14% in the latest session.
The cross has recovered from July’s low near 0.8455, but remains almost 1% lower for the month and below the July opening level near 0.8614.
The 15-minute chart shows that EUR/GBP has surrendered part of its recent rebound after failing above 0.8550.
The cross is trading close to its 20-period moving average near 0.8533, but remains below session VWAP around 0.8541 and beneath the 200-period moving average near 0.8539.
This leaves the immediate technical picture mixed.
The latest recovery from below 0.8530 shows that selling pressure has moderated, while RSI near 46 has moved above its signal line.
However, the cross remains below the neutral 50 level and has yet to overcome the main intraday resistance cluster.
Initial resistance is located around 0.8539-0.8542, followed by 0.8547 and the recent highs around 0.8550-0.8555.
A break through that area would strengthen the case for a return towards 0.8600.
Rabobank’s 0.8650 forecast lies above the current technical range and would require a more decisive deterioration in Sterling sentiment.
On the downside, support is located around 0.8530, followed by 0.8525.
A break below these levels would weaken the immediate recovery and raise the risk of a renewed move towards 0.8500.
Image: EUR/GBP 15-minute chart with 0.8530 support, 0.8550 resistance The wider bank consensus also leans towards a higher EUR/GBP rate over the coming quarters.
The median forecast stands close to 0.8700 from the third quarter of 2026 through early 2028, before easing towards 0.8600 and then 0.8450 by the end of 2028.
Rabobank’s 0.8650 target is therefore slightly below the near-term consensus median but still implies a meaningful Sterling decline from current levels.
Pound Sterling: Rabobank’s forecasts leave GBP exposed on two fronts Against the Euro, the bank expects EUR/GBP to rise towards 0.8650 as investors question the government’s fiscal plans and reassess the likelihood of Bank of England tightening.
Against the Dollar, it sees GBP/USD falling towards 1.3200 as political uncertainty, gilt-market sensitivity and lower UK rate expectations weigh on the Pound.
The technical charts show that neither move has yet been fully confirmed.
GBP/USD is attempting to stabilise around 1.3320, while EUR/GBP remains below resistance around 0.8550.
However, the fundamental risks identified by Rabobank remain unresolved.
A reduction in expected BoE tightening would remove an important source of Sterling support, while further spending announcements without a convincing funding plan could renew pressure on gilts.
The base case is therefore for Pound Sterling to remain vulnerable, with a GBP/USD break below 1.3290 strengthening the path towards 1.3200 and an EUR/GBP move above 0.8550 opening the way towards Rabobank’s 0.8650 target.
GBP/EUR se po pátečním odrazu drží nad 1,1700, ale zůstává pod rezistencí 1,1760–1,1780. Britská data zlepšila výhled libry, avšak trh čeká na rozhodnutí Bank of England.
Stronger UK retail sales and improving business activity support the pound, but GBP/EUR must break 1.1760 to revive July’s rally. The Pound to Euro exchange rate recovered on Friday after suffering three consecutive daily declines earlier in the week.
GBP/EUR traded at 1.1718 late on Friday, up 0.14% on the day but below the previous week’s close of 1.1763.
Sterling reached a July high of 1.1827 on July 15 before retreating as softer UK inflation encouraged some investors to take profits and the Euro received support from improving Eurozone economic data.
Despite the setback, GBP/EUR remains around 0.9% above the July opening level near 1.1610 and comfortably above the June close at 1.1610.
The pullback has also stopped close to 1.1700, suggesting buyers remain willing to defend the exchange rate above the former July consolidation zone.
Image: GBP/EUR chart showing July rally to 1.1827 and pullback towards 1.1700 The technical outlook is therefore constructive but no longer decisively bullish.
GBP/EUR has formed resistance between 1.1760 and 1.1780, an area containing several recent daily closes. A recovery above this zone would improve the prospect of another challenge to 1.1800 and the July high at 1.1827.
Initial support is located around 1.1700, followed by the July 14 low and earlier cluster of closes around 1.1725.
A sustained break below 1.1700 would expose the June high at 1.1623 and the July opening area between 1.1600 and 1.1610.
UK Economy Ends the Week on a Stronger Footing Friday’s UK data offered some encouragement after employment and inflation figures had raised questions over the strength of the economy earlier in the week.
The Office for National Statistics reported that retail sales volumes increased 1.0% in June, defying expectations for a 0.3% decline.
Sales were also 4.2% higher than a year earlier, with warm weather, promotions and stronger online demand supporting spending.
Non-store retail sales rose 4.4% during the month, while the proportion of sales made online reached its highest level since April 2021.
The figures followed a 1.2% monthly increase in May and meant retail sales expanded 0.6% during the second quarter.
UK business activity also strengthened during July.
The flash composite purchasing managers’ index rose to 52.1, its highest level since February and above the 50 threshold separating expansion from contraction.
Services activity benefited from hospitality, domestic tourism and improved consumer confidence, while business cost pressures showed signs of easing.
The combination of stronger retail spending and renewed private-sector growth provides a better starting point for the new government and should reduce immediate concern over a sharp economic slowdown.
However, the improvement may prove vulnerable if higher oil and gas prices squeeze household incomes during the second half of the year.
Softer Inflation Limits the Pound’s Recovery Sterling’s response to Friday’s data was positive but limited because the latest inflation report has reduced the urgency for further Bank of England tightening.
The UK consumer price index increased 2.6% in the year to June, down from 2.8% in May and below the Bank of England’s previous projections.
Monthly inflation was just 0.1%, while CPIH inflation declined from 3.0% to 2.8%.
The figures followed evidence that private-sector wage growth has slowed and vacancies have fallen to 712,000.
Together, these reports suggest that underlying domestic inflation pressures are easing, even though the renewed increase in energy prices threatens to push headline inflation higher later this year.
The Bank of England will announce its latest interest-rate decision next week.
Policymakers are widely expected to leave Bank Rate unchanged at 3.75%, but markets will focus on the vote split and any guidance concerning the remainder of the year.
A cautious statement that emphasises weaker wage growth and lower June inflation could weigh on the Pound, particularly if policymakers push back against expectations for further rate increases.
Pound Sterling would receive stronger support if the Bank concentrates on the inflation risks created by rising energy costs and signals that another increase remains possible.
For GBP/EUR, the decision will be important because the Pound’s interest-rate advantage over the Euro remains one of its main sources of support.
ECB Leaves the Door Open to Higher Rates The European Central Bank left its three principal interest rates unchanged on Thursday, keeping the deposit rate at 2.25%.
In its latest monetary-policy decision, the ECB warned that the full inflationary consequences of the energy shock had yet to emerge.
The central bank maintained a data-dependent, meeting-by-meeting approach and said it would monitor the duration of the shock and the risk of indirect or second-round effects.
That kept the prospect of another increase in September alive.
Money markets continue to see a strong chance of two additional ECB increases before the end of the year, although weak growth could restrict how far policymakers are willing to tighten.
The economic picture improved on Friday as the Eurozone composite PMI rose from 50.0 to 51.9 in July.
The reading was well above expectations for 50.3 and signalled the strongest expansion in five months.
New orders returned to growth, while the survey was consistent with quarterly economic growth of approximately 0.3%.
An ECB survey published on Friday nevertheless showed economists expect Eurozone growth of only 0.6% during 2026, down from an earlier estimate of 1.0%.
The same survey placed average inflation at 2.7% this year and 2.2% in 2027.
The Euro therefore benefits from the possibility of further ECB tightening, but the outlook is constrained by weak underlying growth and the risk that higher energy costs damage the region’s manufacturing economy.
What’s the Forecast for the Pound versus the Euro? The broader Pound-to-Euro exchange rate trend remains positive, but the failure above 1.1800 and three consecutive daily declines indicate that the July rally has entered a consolidation phase.
Friday’s rebound from 1.1700 is technically encouraging and suggests the correction has not yet developed into a more significant reversal.
The central forecast is for GBP/EUR to remain within a 1.1680–1.1780 range ahead of the Bank of England decision.
A break above the cluster of recent closes around 1.1760–1.1780 would suggest buyers are regaining control and expose 1.1800, followed by the July high at 1.1827.
A close above 1.1827 would confirm a fresh breakout and bring 1.1900 into consideration.
The downside risk would increase if GBP/EUR closes below 1.1700.
That would indicate the recent rebound has failed and expose 1.1620–1.1630, where the June high and former resistance are located. The July opening level near 1.1610 would provide additional support.
Stronger UK activity data and the Pound’s existing interest-rate advantage favour eventual recovery, but the Euro has gained support from a more hawkish ECB outlook and a surprisingly strong July PMI.
The Bank of England will therefore determine whether GBP/EUR can return towards 1.1800 or whether the correction extends towards the former breakout area above 1.1600.
ING’s forecast for EUR/USD to retreat towards 1.1380 has already been realised, with the pair now testing its lowest levels of July as higher energy prices support the US Dollar. The Euro-to-Dollar exchange rate traded close to 1.1371 late on Friday, extending its retreat from the mid-July peak near 1.1470.
EUR/USD fell 0.30% on Thursday and has now declined in seven of the past eight completed sessions.
The pair is also down by around 0.3% for July, having traded between 1.1362 and 1.1481 during the month.
ING had expected EUR/USD to drift back towards 1.1380 as elevated energy prices continued to favour the Dollar.
That objective has now been reached and modestly exceeded, leaving the market focused on whether support around 1.1360 can prevent a deeper Euro decline.
Latest — Exchange Rates:
Euro to Dollar (EUR/USD): 1.137117 (-0.05%)
Pound to Dollar (GBP/USD): 1.332498 (+0.09%)
Dollar to Yen (USD/JPY): 163.85169 (0.00%)
ING Sees US Dollar Support from Higher Energy Prices ING describes a global investment environment in which equity-market sentiment remains relatively resilient even as higher energy prices push interest rates upwards.
According to the bank, investors are favouring currencies that provide both attractive yields and some protection against a further escalation in energy costs.
“The dollar and the Norwegian krone remain the go-to currencies here,” says Chris Turner, ING’s Global Head of Markets and Regional Head of Research for the UK and Central and Eastern Europe.
The Dollar’s yield advantage and the relative resilience of the US economy leave it better positioned than lower-yielding currencies during a period of elevated oil and gas prices.
ING expects the Dollar Index to remain supported within its 100.35-101.80 range and continues to favour the upside over the short term.
Higher energy prices are particularly relevant for EUR/USD because the Eurozone is a major net energy importer.
An extended increase in oil and natural gas costs can weaken the region’s terms of trade, squeeze household spending and raise costs for European businesses, while simultaneously supporting the Dollar through higher US yields and safe-haven demand.
Image: EUR/USD 15-minute technical chart showing support around 1.1360 and resistance between 1.1380 and 1.1392 EUR/USD Reaches ING’s 1.1380 Target Analysts at ING noted that EUR/USD had initially held up relatively well despite the rebound in energy prices and a rise in European natural gas towards €60 per megawatt hour.
Interest-rate expectations helped explain that resilience.
Higher energy costs encouraged investors to price a more aggressive tightening response from the European Central Bank than from the Federal Reserve, temporarily supporting Eurozone yields and the single currency.
However, ING questioned how much further ECB expectations could move in a hawkish direction.
“It is hard to see the market pricing in even higher ECB rates, regardless of the language delivered at tomorrow’s ECB meeting and press conference,” says Turner.
“Barring a near-term move towards another cease-fire between the US and Iran, our bias remains for EUR/USD to drift back to 1.1380.”
That forecast has proved accurate, with EUR/USD falling through 1.1380 and approaching July’s low around 1.1362.
The question now is whether the retreat represents the completion of the corrective move or the beginning of a more sustained decline.
EUR/USD Technical Outlook Remains Fragile The short-term chart continues to favour the US Dollar, although the Euro is attempting to stabilise near the bottom of its recent range.
EUR/USD trades below its 20-period moving average near 1.1372 and beneath session VWAP around 1.1381.
The pair is also well below the 200-period moving average near 1.1392, confirming that the immediate intraday trend remains bearish.
Repeated failures between 1.1390 and 1.1400 have established this region as significant resistance. The Euro would need to recover above this area to suggest that the sequence of lower short-term highs has been broken.
RSI has recovered to approximately 44 after previously approaching oversold territory.
The indicator remains below the neutral 50 level, showing that bearish momentum is still present, but the recovery from its lows suggests selling pressure is no longer accelerating.
This is consistent with a market consolidating after a decline rather than one already embarking on a convincing rebound.
Initial resistance is located around 1.1374, followed by ING’s former target at 1.1380.
A recovery above 1.1380 would allow EUR/USD to challenge 1.1387 and the 200-period moving average close to 1.1392.
The 1.1400 area then represents the more important technical barrier. A sustained break above it would weaken the immediate bearish case and suggest the pair is returning to a broader range.
On the downside, July’s low at 1.1362 is the key near-term support.
A decisive break beneath that level would confirm that the decline has extended beyond ING’s original objective and expose the lower portion of June’s range.
Energy Market Remains the Key Risk ING’s EUR/USD assessment was conditional on the geopolitical and energy-market backdrop.
A ceasefire or meaningful de-escalation between the US and Iran would reduce the energy-price premium supporting the Dollar and could allow the Euro to recover.
The opposite scenario presents the larger downside risk.
A renewed rise in oil or European gas prices would probably reinforce demand for the Dollar while increasing concerns over the Eurozone growth outlook.
The policy implications are also complicated.
Higher energy prices can raise headline inflation and encourage expectations of tighter ECB policy, but they simultaneously weaken real incomes and economic activity.
ING’s argument is that the market has limited capacity to price substantially more ECB tightening, reducing the potential support available to the Euro from interest-rate expectations.
The Federal Reserve, meanwhile, benefits from a stronger US growth backdrop and a currency that tends to attract demand when geopolitical uncertainty increases.
EUR/USD Technical Forecast ING’s move towards 1.1380 has been completed, but the short-term technical picture does not yet provide a convincing signal that the decline is over.
EUR/USD remains below its main intraday moving averages and continues to trade near the bottom of July’s range.
The 1.1362 monthly low is now the immediate dividing line.
Holding above this level could produce a corrective recovery towards 1.1380 and potentially 1.1390, particularly if energy prices ease or geopolitical tensions subside.
A break below 1.1362 would instead strengthen the Dollar’s advantage and leave EUR/USD vulnerable to a deeper extension lower.
The base case is therefore for the Euro to remain under pressure while below 1.1390-1.1400, with energy prices and developments in the Gulf determining whether the pair stabilises or resumes its decline.
EUR/USD zůstává pod tlakem po týdnu, kdy euro oslabilo o více než 0,4 % za poslední 2 obchodní seance. ECB nepřinesla euru větší podporu, zatímco dolar zůstává silný.
It was not an easy week for the euro. Now, EUR/USD has accumulated a decline of more than 0.4% over the last 2 trading sessions, reflecting significant short-term weakness in the European currency.
For now, selling pressure remains relevant, in a context where the European Central Bank decision failed to generate greater appeal for the euro. In addition, the U.S. dollar continues to show some strength as global risk events drive demand for liquidity and more defensive assets.
If this dynamic continues, selling pressure could continue to shape EUR/USD movements over the next few trading sessions.
Does the ECB fail to support the euro? During the week, the European Central Bank held its interest rate decision. The deposit rate remained unchanged at 2.25%, while the refinancing rate stayed stable at 2.4%.
In its message after the meeting, the central bank maintained a cautious pause. The institution noted that inflationary pressures could remain relevant, but also highlighted that economic dynamics in Europe may not support consistent interest rate increases.
For this reason, the ECB showed a fairly neutral stance toward possible changes in monetary policy. It also emphasized that future decisions will depend on economic data meeting by meeting, without committing to a specific path in the short term.
After the event, the central bank’s neutrality did not generate a relevant increase in the euro’s relative appeal. This is mainly because the ECB did not confirm an outlook for higher rates, while in the United States, the Federal Reserve continues to show signs that it could adopt a more aggressive stance over the coming months.
This difference keeps in place a dynamic that has been relevant for several months in the bond market. Currently, U.S. 10-year Treasury yields remain above 4.6%, while European bond yields barely reach the 3.6% area.
Source: TradingEconomics
The differential between both markets continues to favor dollar-denominated investments. The United States maintains a more attractive bond market, supported by a potentially more aggressive Fed, while Europe faces a more indecisive central bank and a less competitive bond yield.
This dynamic could continue to limit appetite for the euro in the short term. If the rate differential remains in place, EUR/USD could continue to face selling pressure over the next few trading sessions.
Is uncertainty becoming relevant? The week was also marked by important risk events for markets. On one hand, new escalations in the Middle East conflict pushed WTI crude oil above 90 dollars per barrel. On the other hand, new comments from the U.S. government pointed to a global tariff plan of up to 12.5% for several countries.
Both events have revived market concerns about a broader trade conflict and possible additional inflationary pressure. This combination could be affecting risk sentiment and driving flows toward safe-haven assets in the short term.
In this scenario, the behavior of the U.S. dollar is key. In previous months, the currency had already acted as one of the market’s main liquidity safe havens. During this week, that dynamic became evident again in the DXY index, which measures the dollar’s strength against its main peers.
As risks increased across markets, the DXY maintained consistent gains and moved back above the 101-point area, approaching the year’s highs again. This behavior reflects relevant demand for the dollar in an environment of greater uncertainty.
Source: TradingEconomics
The role of the U.S. dollar remains fundamental. If the market once again sees the currency as a liquidity safe haven, and risk events continue to generate uncertainty, demand for the USD could remain strong.
This would make a consistent recovery in the euro more difficult and could continue to generate selling pressure on EUR/USD over the next few trading sessions.
Technical forecast for EUR/USD Source: StoneX, Tradingview
Sideways range begins to emerge: Although the daily EUR/USD chart still maintains a major long-term bearish trend line, a short-term sideways range has also started to form. This range has an upper barrier near 1.14742 and a lower area around 1.13538. If selling pressure fails to stabilize consistently, this sideways structure could remain relevant over the next few trading sessions.
RSI: Now, the RSI remains below the neutral 50 level, suggesting that selling impulses continue to dominate the average of the last 14 sessions. If this dynamic continues, the indicator could keep highlighting a relevant selling bias in EUR/USD over the next few sessions.
TRIX: The TRIX also remains below the neutral 0 line, indicating that bearish strength in the exponential moving averages remains relevant. This reading reinforces the possibility that the selling bias could continue to be important in the short term.
Key levels:
1.14742 – Relevant resistance: This recent weekly high coincides with the area of the 50-period simple moving average. Price movements above this level could start to put the bearish structure and current sideways range at risk, opening room for a more relevant buying bias over the coming weeks.
1.14125 – Near-term barrier: This level corresponds to an important retracement area on the daily chart. If price fails to move consistently away from this reference, it could continue to highlight a phase of indecision and give more relevance to the current sideways channel over the next few sessions.
1.13538 – Definitive support: This level corresponds to the 2026 low zone and represents the most important bearish barrier in the short term. Moves below this area would mark new relevant lows for the year and could reinforce a dominant selling bias, potentially extending the long bearish trend line over the coming weeks.
Written by Julian Pineda, CFA, CMT – Market Analyst
GBP/AUD klesl na téměř měsíční minimum poté, co australská zaměstnanost v červnu vzrostla o 76 300, výrazně nad odhadem 15 000. Silnější data podpořila očekávání dalšího zvýšení sazeb RBA.
The Pound to Australian Dollar (GBP/AUD) exchange rate fell to a near one-month low on Thursday after stronger-than-expected Australian employment figures boosted the ‘Aussie’.
At the time of writing, GBP/AUD was trading around AU$1.9091, having recovered from an intraday low of approximately AU$1.9066.
Latest — Exchange Rates:
Pound to Australian Dollar (GBP/AUD): 1.911595 (-0.12%)
Pound to Dollar (GBP/USD): 1.332 (-0.41%)
DAILY RECAP:
The Australian Dollar (AUD) strengthened during Thursday’s Asian trading session following the release of Australia’s latest employment report.
The data showed employment increased by 76,300 in June, comfortably beating forecasts for a rise of 15,000.
The stronger-than-expected labour market reinforced expectations that the Reserve Bank of Australia (RBA) could continue raising interest rates later this year.
However, the risk-sensitive ‘Aussie’ struggled to hold onto all of its gains as a cautious market mood weighed on demand during European trade.
Meanwhile, the Pound (GBP) remained subdued as markets continued to assess Andy Burnham’s first week as Prime Minister.
Sterling had strengthened in the run-up to Burnham entering Downing Street as investors unwound the political risk premium previously built into the currency.
However, the Pound has since trended lower amid ongoing questions over how the government's spending commitments and tax cut pledges will be financed.
This uncertainty continued to limit Sterling on Thursday.
Near-Term GBP/AUD Forecast: PMI Surveys in Focus Looking ahead, Friday's Asian session brings Australia's preliminary PMI surveys.
If private sector activity slowed to near-stagnation in July, as expected, the Australian Dollar could face renewed pressure.
European trading then begins with the UK's June retail sales figures. A forecast 0.3% contraction in sales could weigh on Sterling.
Later in the morning, attention turns to the UK's preliminary PMI surveys, with investors particularly focused on the services reading. Any improvement in business activity could provide the Pound with modest support.
Meanwhile, broader market risk appetite and UK political developments are also likely to influence GBP/AUD trading, potentially leading to increased volatility.
The EUR/JPY extends its advance for the third straight day, set to end the week with solid gains as traders brace for the end of the week. The shared currency didn’t capitalise on the hawkish forward guidance by the European Central Bank (ECB), as Bloomberg, citing sources, revealed that officials are ready to raise rates in September.
Euro gains as ECB hawkishness offsets BoJ intervention cautionDigging into ECB President Christine Lagarde’s press conference, she said that inflation risks are tilted to the upside and growth to the downside, but stated that the central bank would set monetary policy to ensure that inflation returns to the 2% goal in the medium term. She added that they would remain data-dependent and would not pre-commit to an interest rate path.
Meanwhile, the Japanese Yen weakened less than expected against the Euro as investors remain wary that the Bank of Japan (BoJ) might intervene in the foreign exchange markets to push its local currency.
On Friday, EUR/JPY traders will be watching the release of Japanese inflation data. The National CPI excluding Fresh Food is expected to rise from 1.4% to 1.6% YoY. Also, traders would be looking for updates on Jibun Bank Flash PMIs, with the manufacturing activity index measure expected to ease from 54.8 to 54.5.
In the Eurozone, traders will also digest HCOB Flash PMIs for Germany, France, and the European Union (EU). The EU’s HCOB Manufacturing PMI is expected to drop from 51.4 to 51.3, while the Services PMI is expected to improve, but will remain in contractionary territory, from 49.4 to 49.8.
EUR/JPY Price Forecast: Technical outlook
The EUR/JPY daily chart shows that momentum is tilted to the upside, further confirmed by a rising Relative Strength Index (RSI). Additionally, a trendline break since last week shifted the market structure from sideways trading to an uptrend, as prices drift higher at a modest pace.
For a bullish continuation, the EUR/JPY needs to clear the April 30, high at 187.56, before buyers can eye 187.95, the year-to-date (YTD) high. Above lies the psychological 188.00 and 190.00 levels.
On the downside, sellers could trigger a break of the market structure, but first they need to clear Thursday’s low of the day (LOD) at 186.05. Once done, they could test the confluence of the 50 and 100-day SMAs at 185.16/02, before targeting the 200-day SMA at 183.44.
EUR/JPY Price Chart – Daily
EUR/JPY daily chart Japanese Yen Price This week The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the strongest against the Swiss Franc.
USDEURGBPJPYCADAUDNZDCHFUSD0.43%1.03%0.92%0.48%-0.03%1.08%1.01%EUR-0.43%0.61%0.43%0.07%-0.43%0.65%0.58%GBP-1.03%-0.61%-0.17%-0.54%-1.03%0.03%0.02%JPY-0.92%-0.43%0.17%-0.36%-0.90%0.11%0.20%CAD-0.48%-0.07%0.54%0.36%-0.47%0.46%0.58%AUD0.03%0.43%1.03%0.90%0.47%1.11%1.07%NZD-1.08%-0.65%-0.03%-0.11%-0.46%-1.11%-0.02%CHF-1.01%-0.58%-0.02%-0.20%-0.58%-1.07%0.02% 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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
The latest trading sessions continue to show weakness in the Japanese yen. This dynamic is reflected in USD/JPY, which has gained more than 0.7% over the last 3 sessions, highlighting the loss of strength in the Japanese currency.
For now, buying pressure in the pair remains supported by the wide rate differential with the United States, which could even widen over the coming months. In addition, renewed dollar strength, driven by updates in the Middle East, has also supported the advance in USD/JPY.
If these catalysts remain in place, buying pressure in the pair could continue to be relevant over the next few trading sessions.
Is the rate differential still weighing on the yen? Over the last few months, the rate differential between the United States and Japan has been one of the main factors behind yen weakness. While the Federal Reserve maintains a reference rate of 3.75%, Japan keeps one of the lowest interest rates in the world, near 1.00%.
This difference is also reflected in the bond market. Although bonds in both countries have shown recent increases in yields, the gap remains wide. U.S. 10-year Treasury yields have already reached a new yearly high near 4.7%, while Japan’s 10-year bond yields remain much lower, around 2.7%.
Source: TradingEconomics
This dynamic continues to limit the appeal of the Japanese yen. Higher U.S. bond yields favor dollar-denominated investments over yen-denominated assets, a relationship that has remained in place for several months and has restricted demand for the Japanese currency.
What is relevant now is that this differential could widen even further. So far, there have been no major updates from the Bank of Japan pointing to a possible rate hike. In contrast, the Federal Reserve has started to reflect a higher probability of higher rates over the coming months.
According to the CME Group probability table, for the September 16 decision, there is still a dominant probability above 56% that the United States could deliver a rate hike, which would further widen the differential with Japan.
Source: CMEGROUP
As a result, if the market continues to see a stable Bank of Japan with no relevant changes, compared with a potentially more aggressive Federal Reserve, the rate differential could continue to favor the relative appeal of the dollar. This dynamic may make a sustained yen recovery more difficult and could maintain buying pressure in USD/JPY over the next few sessions.
Is Middle East becoming relevant again? New updates in the Middle East suggest that risk may be increasing not only around the Strait of Hormuz, but also in the Red Sea, following attacks carried out by Iran-backed groups from Yemen. This event adds to new U.S. military actions and reflects a scenario that still appears far from a negotiated solution in the short term.
The escalation continues to support oil prices, increase uncertainty and lift the market’s risk premium.
In this context, the U.S. dollar has started to show a renewed recovery. This is reflected in the DXY index, which measures the dollar’s strength against its main peers, and which has already moved above the 101-point area after several consecutive advances.
This suggests that, as seen in previous months, the dollar could be acting as a liquidity-driven safe-haven currency amid rising tensions in the Middle East.
Source: TradingEconomics
This dynamic is also important for the yen. If the conflict continues to escalate and the dollar maintains its strength as a safe-haven asset, the Japanese currency could struggle to regain ground consistently. For this reason, USD/JPY could continue to show buying pressure over the next few trading sessions.
Technical forecast for USD/JPY
Source: StoneX, Tradingview
Bullish trend appears unstoppable: For several months, USD/JPY has maintained a dominant bullish trend line. This structure remains the most relevant pattern on the chart, especially due to the lack of selling moves strong enough to put the main trend at risk. As long as buying pressure remains in place, this trend line could continue to act as the dominant technical reference over the next few sessions.
RSI: The RSI remains above the neutral 50 level, reflecting dominant buying impulses in the short term. However, it is also important to note that the indicator has started to form lower highs, while USD/JPY price action continues to register higher highs. This dynamic has created a possible bearish divergence, which could warn of excessive recent buying pressure and open room for potential short-term corrections
MACD: The MACD shows a histogram increasingly close to the neutral 0 area. This suggests that the strength of short-term moving averages is starting to balance out. For this reason, the indicator could also be anticipating a phase of greater neutrality on the chart over the next few sessions.
Key levels:
164.238 – Key resistance: Given the lack of relevant references from previous years, this level coincides with the 61.8% area of a trend-based Fibonacci extension. If price manages to approach this zone again, it could reinforce the buying bias and keep the bullish trend line as the dominant structure.
161.898 – Near-term barrier: This area works as an important technical reference, as it coincides with the highs recorded in previous weeks. It could also act as a tentative barrier in case of possible short-term corrections.
160.214 – Main support: This area remains the most relevant support on the chart. In addition to coinciding with recent retracements and acting as a psychological market level, it also aligns with the base of the major bullish trend line. Moves that approach this level again could put the bullish structure at risk and open room for a more relevant selling bias over the coming weeks.
Written by Julian Pineda, CFA, CMT – Market Analyst
USD/CAD klesl pod 1,4100 na zhruba 1,4080, protože rostoucí ceny ropy a slabší dolar podpořily kanadský dolar. Nová americká 50% cla na vybrané kanadské zboží ale dál drží pár pod tlakem.
Rising crude oil prices and a weakening greenback pushed USD/CAD back below 1.4100, threatening a return to its July downward channel Central bank divergence remains a risk, as a cautious Bank of Canada (BoC) and hawkish Federal Reserve could limit further loonie gains The Bank of Canada’s steady policy rate keeps interest rate differentials tilted in favor of greenback dip-buyers on deeper pullbacks The US dollar briefly halted the Canadian dollar’s recent climb earlier this week. But it started falling again yesterday and still looks weak today. Now trading below 1.4100, around 1.4080, investors wonder if USD/CAD will return to the steady decline it had between late June and mid-July.
What Broke the Downtrend The brief pause in the downtrend had a clear cause. On Monday, the US administration announced new 50% tariffs on various Canadian goods, including wine, dairy, and cement. This action was stated as a response to what the US described as discriminatory practices against American products in Canada.
Canadian Prime Minister Mark Carney called this the latest in a series of unilateral US trade actions. He said Canada had “merely matched” prior US measures. Headlines like that usually hit the loonie first and hardest, which explains why the dollar strengthened Monday and Tuesday.
What Is Driving the Loonie’s Rebound? A significant increase in global crude oil prices is the primary driver behind the Canadian dollar’s resurgence. As a major exporter of commodities, Canada benefits directly from rising crude prices. Oil prices have reached new multi-week highs, which has helped to offset recent domestic challenges and provide strong fundamental support for the Canadian dollar.
Potential Risks Beneath the Surface Despite the current trend, a return to a consistent downtrend is not guaranteed. The tariffs announced on Monday will take effect in 30 days. If trade tensions escalate further before then, sentiment towards Canadian assets could shift negatively, irrespective of oil prices or interest rate movements.
While the current trend favors a stronger Canadian dollar, underlying risks require careful assessment. Uncertainties surrounding the USMCA trade agreement renewal and potential tariff discussions remain significant factors that could strengthen the US dollar if tensions increase.
Market expectations indicate that the Bank of Canada (BoC) might maintain a supportive monetary policy stance, influenced by recent lower domestic consumer price index (CPI) figures. In contrast, persistent US inflation data suggests the Federal Reserve is likely to continue its restrictive monetary policy for a longer period.
Investors should consider USD/CAD with a balanced view. Those expecting further gains in the Canadian dollar might explore strategies that leverage CAD strength, such as hedging US dollar exposure or investing in Canadian assets sensitive to commodity prices.
Effective risk management remains crucial. Diversification and close attention to central bank statements, oil market developments, and trade news will be essential for navigating market fluctuations. Adopting a flexible approach that adapts to evolving data, rather than making large directional bets, is likely to better serve long-term investment goals.
Is USD/CAD returning to its prior downward channel?
The recent weakness in the US dollar suggests a potential return to the late June to mid-July downtrend if current momentum continues.
What risks could impact USD/CAD trajectory?
Trade tensions related to the USMCA, geopolitical shocks in the energy sector, and differing monetary policies between the Federal Reserve and the Bank of Canada present notable risks of upward movement for the pair.
How do central bank interest rate expectations affect the USD/CAD outlook?
A potentially cautious Bank of Canada alongside a hawkish Federal Reserve could limit severe downside losses for USD/CAD.
GBP/EUR oslabil o 0,5 % za posledních pět obchodních dnů, protože nižší britská inflace a zpomalující růst mezd snížily očekávání dalšího zvýšení sazeb BoE. Euro navíc drží ECB před dnešním rozhodnutím.
After gaining over 1% past month, the British pound dropped 0.5% against the euro due to cooling UK inflation and wage growth Lowering expectations for Bank of England rate hikes narrowed the yield gap between the pound and euro, triggering recent short-term profit-taking Anticipation of a hawkish policy stance from the European Central Bank provided additional underlying support for the euro against the British pound The British pound saw a significant monthly increase against the euro, rising over 1% to reach levels near 1.1800, last seen in mid-July. However, the pound has since given back some of these gains, falling about 0.5% in the last five trading days and moving back towards 1.1715. Understanding these movements offers valuable insight for market participants.
The Month’s Rally Explained Two central banks did most of the heavy lifting here. In the Eurozone, June inflation cooled to 2.8%, reducing the likelihood of further interest rate hikes from the European Central Bank following their June increase to a 2.25% deposit rate.
Additionally, a more stable political environment in the UK under new leadership has boosted market sentiment and lessened previous concerns that had impacted the pound. Andy Burnham’s uncontested succession brought an end to the nation’s political uncertainty. This removed a risk premium previously built into the currency.
Why the Pound Lost Its Grip The UK’s latest Consumer Price Index (CPI) report showed headline inflation slowing to 2.6% year-over-year in June, below market expectations of 2.7%. While core CPI held steady at 2.6%, the slower headline figures, combined with slowing wage growth, tempered investor expectations for immediate rate hikes from the Bank of England (BoE).
As the British pound struggled for direction, the euro gained support. Investors were positioning themselves ahead of the European Central Bank’s (ECB) latest monetary policy announcement. Expectations that ECB policymakers would maintain a hawkish stance helped the single currency stay resilient.
What This Means Going Forward Looking ahead, the immediate focus will be on the ECB’s decision today and the BoE’s meeting on July 30. If the ECB maintains its current stance and suggests a potential September hike, it may not significantly affect the pound.
The BoE meeting, however, carries more weight. With a new Monetary Policy Report, the outcome could range from a cautious approach to signals of a potential rate increase, particularly as the number of dissenting votes favoring tighter policy has increased.
For the UK, slowing inflation combined with stable growth metrics suggests the BoE can prioritize economic stability without resorting to aggressive easing measures. This scenario could indicate confidence in the pound’s underlying strength, bolstered by the credibility of domestic policy.
In the Eurozone, persistent challenges related to energy costs and subdued growth forecasts highlight potential weaknesses, even with the ECB’s stated commitment to its 2% inflation target. The euro’s current softness relative to the pound may reflect investor preference for sterling, although both currencies face external pressures from global economic trends.
How Investors Might Position With two significant central bank meetings occurring closely together, this period presents heightened uncertainty for investors, making substantial directional bets less advisable. Those with substantial sterling transactions or exposure due in the next two weeks should account for this increased event risk.
For investors with a longer-term perspective, the current trends, including a more cautious ECB and a BoE possibly moving towards tightening policy, may continue to favor the pound. However, that view should be held loosely until both decisions land.
What key economic data release caused the pound to lose momentum against the euro over the last five sessions?
Softer UK headline inflation of 2.6% and cooling wage growth lowered market expectations for imminent Bank of England rate hikes.
How has the ECB’s upcoming policy announcement influenced the euro’s performance against the Sterling?
Anticipation of a hawkish rate hold by the European Central Bank provided support for the euro against the pound.
How should investors approach GBP/EUR right now?
Investors should avoid large directional bets until both central bank decisions land; the medium-term uptrend looks intact but near-term volatility is elevated.
EUR/USD ve čtvrtek vzrostl na 1,1429, protože dolar dál oslaboval. Trh sleduje geopolitické napětí a očekává, že Fed příští týden sazby ponechá beze změny.
EUR/USD rose to 1.1429 on Thursday, with the US dollar continuing its moderate decline from the previous session. The market is assessing rising inflation risks driven by elevated energy prices against a backdrop of weakening economic data, while seeking further signals on Federal Reserve policy.
At next week's meeting, the regulator is expected to keep rates unchanged. However, uncertainty about future decisions has increased due to the lack of clear guidance from the new Fed Chairman Kevin Warsh.
Dollar declines are being limited by persistent demand for safe-haven assets. Tensions remain high in the Middle East, with Donald Trump stating that the US will strike Iranian infrastructure in response to attacks on vessels in the Strait of Hormuz. Tehran has threatened retaliation against energy and infrastructure facilities in the region.
Additional concerns have been raised by attacks on tankers in the Red Sea – the first such incidents since late February. Markets are worried about the potential expansion of the conflict and new disruptions to global trade.
Technical analysis
On the H4 chart of EUR/USD, the market has formed a consolidation range around the 1.1410 level, currently extending down to 1.1405 and up to 1.1434. This consolidation range is nearing completion. An upside breakout would suggest a corrective move towards 1.1500, followed by a decline to 1.1260. A direct downside breakout would open the way for a move to 1.1260. The MACD indicator supports this scenario, with its signal line below zero and pointing firmly downwards, reflecting continued bearish momentum.
On the H1 chart, the market has completed an upward move to the 1.1434 level. A consolidation range is currently forming below this level. Today, a move lower to 1.1400 is expected, followed by a move higher to 1.1420, and then a continuation of the downward trend to 1.1370. The Stochastic oscillator confirms this scenario, with its signal line above 80 and pointing downwards towards 20, indicating increasing short-term downside pressure.
ConclusionEUR/USD has recovered modestly as the dollar softened amid heightened geopolitical uncertainty and a lack of clear guidance from the Federal Reserve. Rising energy prices and tensions in the Middle East – including threats of strikes on Iranian infrastructure and renewed attacks in the Red Sea – continue to fuel inflation concerns and risk-off sentiment. Markets expect the Fed to hold rates steady next week, while the outlook beyond that remains uncertain. Technically, the pair may see a temporary corrective move towards 1.1500, but the broader bearish structure remains intact, with downside potential towards 1.1260 in the medium term. The direction will largely depend on geopolitical developments and any future signals from the Fed.
The New Zealand Dollar (NZD) extends losses for the third consecutive day against the US Dollar (USD) on Thursday, with the NZD/USD pair dipping below 0.5800, after being rejected at the 0.5875 area earlier in the week. The Kiwi Dollar is giving away previous gains as higher Oil prices and concerns about the escalation of the Middle East conflict have offset the positive impact of the hawkish Reserve Bank of New Zealand's (RBNZ) monetary policy stance.
The dismal market mood is finally taking a toll on the risk-sensitive Kiwi, as tensions in the Middle East remain high and reports of attacks on vessels sailing through the Red Sea raise concerns that the conflict might extend through the region, boosting fears of disruptions in Oil supply.
Against this background, the barrel of Brent Oil has crossed the $90 line for the first time in the last six weeks. This has prompted investors to shift their focus from inflation to the negative impact on economic growth of another energy shock, which will, ultimately, limit the central bank’s margin to tighten its monetary policy.
Technical Analysis: Key support is at the 0.5750 area
NZD/USD trades just below 0.5800, with bears gathering pace as intraday momentum indicators tread further within negative territory. The 4-hour Relative Strength Index (14) has retreated to 35, approaching oversold levels, while the Moving Average Convergence Divergence (MACD) remains slightly negative, altogether hinting at waning downside momentum but not yet at a clear reversal.
The pair might find some support at previous resistance around 0.5790 (July 10, 13 highs), although the key support area lies at the confluence of the immediate trendline support and the July 13 low, in the area of 0.5750. A confirmation below here would put bears in control, and bring the July 6 and 8 lows, around 0.5675, into focus.
Upside attempts, on the contrary, have been contained below 0.5825 on Thursday, while the key resistance area is in the area between the 61.8% Fibonacci retracement of the June selloff, at 0.5855, and Tuesday's high, at the mentioned 0.5875, which has capped bulls several times during the current month.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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 Japanese Yen.
USDEURGBPJPYCADAUDNZDCHFUSD-0.08%0.02%0.11%-0.13%-0.08%0.26%0.05%EUR0.08%0.11%0.21%-0.05%0.00%0.36%0.13%GBP-0.02%-0.11%0.11%-0.17%-0.11%0.25%0.02%JPY-0.11%-0.21%-0.11%-0.25%-0.20%0.13%-0.08%CAD0.13%0.05%0.17%0.25%0.04%0.39%0.16%AUD0.08%-0.00%0.11%0.20%-0.04%0.36%0.16%NZD-0.26%-0.36%-0.25%-0.13%-0.39%-0.36%-0.24%CHF-0.05%-0.13%-0.02%0.08%-0.16%-0.16%0.24% 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).
ING’s Francesco Pesole expects the ECB to leave rates unchanged but deliver a hawkish hold, with Middle East tensions and rising European gas prices keeping hawks in control. He argues policymakers aim to preserve market pricing of around 45bp of tightening by year-end, likely via a familiar post-meeting media leak, which should support front-end Euro rates even as ING’s near-term EUR/USD bias remains tilted lower toward 1.1380.
"The ECB is widely expected to leave rates unchanged today, but a surprise hike cannot be fully ruled out."
"Our baseline is a hawkish hold. The re-escalation in the Middle East and European gas prices rising faster than oil prices should keep hawkish voices dominant in the governing council, in our view."
"The aim today could be – once again – to preserve market pricing (45bp by year-end) to limit the risk of inflation expectations de-anchoring."
"Achieving that may well require some indication that a September hike remains in play – more likely through a familiar post-meeting media leak than directly in the press conference."
"A central bank meeting would normally be a prime catalyst for EUR/USD to break out of its tight trading range, but we do not expect that to happen today. Our near-term bias remains tilted to the downside, as we believe FX markets are dangerously complacent about developments in the Gulf. Unless the newsflow becomes more constructive, we look for EUR/USD to slip towards 1.1380 in the coming days."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The AUD/USD pair catches fresh bids during the Asian session on Thursday following the release of the upbeat Australian jobs report, which lifted bets for another interest rate hike by the Reserve Bank of Australia (RBA). Furthermore, a modest US Dollar (USD) weakness lifts spot prices to the 0.7020 region in the last hour, back closer to an over one-month high set on Tuesday.
Meanwhile, escalating US-Iran tensions and rising supply disruption concerns lift crude oil prices to a fresh high since June 11, fueling inflationary concerns and bolstering hawkish US Federal Reserve (Fed) expectations. This could help limit deeper losses for the safe-haven Greenback and hold back traders from placing aggressive bullish bets on the risk-sensitive AUD/USD pair.
From a technical perspective, spot prices retain a modest bullish near-term bias above the 38.2% Fibonacci retracement level of the decline from 0.7200 (late May high) and the 100-period Exponential Moving Average (EMA) on the 41-hour chart. Adding to this, the Relative Strength Index (RSI) at 59.45 validates the constructive outlook without signaling overbought conditions.
However, the Moving Average Convergence Divergence (MACD) histogram flattens just below the zero line, hinting that upside momentum is positive but not aggressive. Hence, any subsequent move up is likely to confront initial resistance at the 50.0% level at 0.7033. Furthermore, the 61.8% Fibo. retracement at 0.7072 should act as the next hurdle in the current recovery sequence.
Further up, the 78.6% level at 0.7129 and the cycle high region at 0.7201 mark stronger barriers. On the downside, immediate support is seen at the 38.2% retracement at 0.6993, ahead of the 100-period EMA at 0.6976. A deeper pullback would expose the 23.6% retracement at 0.6944, with the broader bullish structure only threatened on a slide toward the anchor low near 0.6865.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
AUD/USD 4-hour chart
Australian Dollar Price Today The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.14%-0.06%-0.03%-0.12%-0.21%0.00%-0.10%EUR0.14%0.09%0.13%0.01%-0.07%0.16%0.04%GBP0.06%-0.09%0.04%-0.08%-0.17%0.04%-0.06%JPY0.03%-0.13%-0.04%-0.10%-0.19%0.02%-0.09%CAD0.12%-0.01%0.08%0.10%-0.10%0.14%0.00%AUD0.21%0.07%0.17%0.19%0.10%0.24%0.14%NZD-0.01%-0.16%-0.04%-0.02%-0.14%-0.24%-0.14%CHF0.10%-0.04%0.06%0.09%-0.01%-0.14%0.14% 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 Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
EUR/CHF tento týden prorazil nad 0,9278, protože růst cen ropy znovu zvýšil inflační obavy a posílil sázky na jestřábější ECB. Trh čeká, zda Christine Lagarde tato očekávání potvrdí, nebo utlumí.
EUR/CHF may already be telling investors what to expect from today’s European Central Bank meeting. The cross broke decisively above 0.9278 this week, extending its recent rally as surging oil prices revived inflation concerns across Europe. The move suggests markets have begun positioning for a relatively more hawkish ECB even though policymakers are almost universally expected to leave the deposit rate unchanged at 2.25%. With the decision itself largely priced in, attention will instead turn to whether President Christine Lagarde validates—or pushes back against—the hawkish repricing already underway.
The backdrop confronting the Governing Council has changed dramatically since it last met in June. At that meeting, Brent crude was also trading around $95 a barrel, but the trend pointed firmly lower as markets anticipated a breakthrough in US-Iran negotiations. Optimism was soon rewarded with a 60-day ceasefire announced on June 17, sending Brent to around $70 by early July and reinforcing expectations that energy-driven inflation would continue to ease. That narrative has since been turned on its head. The ceasefire has collapsed, military conflict has resumed, shipping risks around the Strait of Hormuz have intensified, and Brent has climbed back above $95. The crucial difference is that oil is now surging rather than falling, fundamentally changing the inflation outlook facing European policymakers.
Financial markets appear to have recognized that shift before the ECB has had a chance to respond. This week’s move in EUR/CHF suggests investors are increasingly pricing a policy outlook that is more hawkish than it appeared only a few weeks ago. While markets are not yet fully convinced another rate hike will follow, they have become less willing to assume June’s increase marked the end of the tightening cycle. The renewed rise in energy prices has reopened the possibility that inflation could prove more persistent than previously expected.
That leaves Lagarde’s press conference carrying far greater significance than the policy announcement itself. Given the speed at which geopolitical developments are evolving, the ECB is unlikely to provide firm forward guidance. The most likely message is that inflation risks have shifted to the upside, uncertainty surrounding the Middle East and the Strait of Hormuz remains exceptionally high, and policy decisions will continue to depend on incoming data. Preserving flexibility is likely to take precedence over signalling a specific policy path.
The key question is whether Lagarde chooses to resist growing market expectations for another rate hike as early as September. Such a question is certain to surface during the press conference. If she explicitly dismisses those expectations, recent Euro gains could fade as markets pare back hawkish bets. On the other hand, if she simply acknowledges heightened inflation risks without challenging current pricing, investors may interpret that as tacit acceptance that another hike remains a live possibility should the energy shock persist.
Meanwhile, EUR/CHF could emerge as the cleaner expression of today’s outcome than EUR/USD. Any hawkish shift from the ECB is likely to be offset by similar expectations that higher oil prices will also keep the Federal Reserve on a tighter path. By contrast, the Swiss National Bank is still widely expected to leave rates unchanged at 0.00% through the remainder of the year, leaving EUR/CHF more directly exposed to changes in ECB expectations.
Technically for EUR/CHF, Wednesday’s break above 0.9278 resumed the rally from March’s 0.8979 low and keeps the pair on course for 100% projection of 0.8979 to 0.9264 from 0.9094 at 0.9379. Just beyond lies the key structural resistance at 0.9394. A sustained break above that level would strengthen the case for a medium-term bullish reversal, reinforcing the view that investors are pricing a widening policy divergence between Frankfurt and Zurich rather than simply reacting to day-to-day geopolitical headlines.
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ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
USD/ZAR daily price chart showing the descending triangle pattern, EMA cluster (20/50/100/200), and support zones at 16.18 and 15.72. Source: TradingView A descending triangle is drawn on the chart, with a falling upper trendline capping every rally since April and horizontal support underneath. That pattern typically resolves lower, which aligns with the marked target arrow pointing down toward the support zones.
Will the SARB Hike Keep the Rand Bid? The case for a lower USD/ZAR rests on South African carry. According to Statistics South Africa, headline inflation jumped to 5.0% in June from 4.5% in May, the highest reading in two years and above the 4.7% consensus.
Transport was the main driver, with fuel prices up 34.3% over the year. That print lands one day before the South African Reserve Bank decision on July 23.
Bank of America and Goldman Sachs both expect a 25bp move to 7.25%, and Governor Kganyago has flagged that further tightening may be needed. Higher local rates widen the yield gap that pays traders to hold the rand, which supports the currency and pressures USD/ZAR.
If the SARB delivers and defends that carry, the bearish trend stays live. A daily close below the 20- and 50-day EMAs near 16.39 opens the door to the first support band at 16.18. A break of 16.18 would expose the lower support zone around 15.72.
The key risk to this bearish thesis is a dovish surprise. A split committee that holds at 7.00%, similar to the 4-2 vote in May, would remove the carry catalyst and let the pair drift back toward its moving averages.
NZD/USD se drží kolem 0,5850, kde se z úrovně stává rezistence. Novozélandská inflace za 2. čtvrtletí zrychlila na 4,1 % a podpořila další zpřísnění RBNZ.
The kiwi has strengthened meaningfully against most peers this month. However, against the US dollar specifically, NZD/USD remains well below its 2026 highs, trading in the mid-0.58 area versus January’s peak near 0.6075.
New Zealand’s Q2 inflation data, released this week, blew past expectations: annual CPI accelerated to 4.1%, above both forecasts and the RBNZ’s own 3.9% projection, reinforcing the case for further tightening after the central bank’s surprise hike to 2.50% earlier in July—its first in over three years.
The dollar side of the equation remains the real wildcard. June’s payrolls report badly missed expectations, coming in at just 57,000, with prior months revised sharply lower, undercutting the Fed’s near-term tightening case despite still-sticky core inflation near 2.9%. Markets currently assign roughly even odds to a September hike, leaving NZD/USD’s next move hostage to next week’s Fed decision and any further escalation in Middle East tensions.
NZD/USD Technical Analysis
As the 4-hour chart shows, NZD/USD has arrived at a genuinely pivotal zone around 0.5850, a level that has repeatedly flipped between support and resistance throughout the year. Currently acting as resistance, this area has become the focal point of a tug-of-war that has now played out for several sessions.
Bullish Scenario After bouncing from the medium-term support at 0.5600–0.5650, price staged a decisive recovery, breaking above the 200-period EMA and successfully retesting it as new support, all while forming a clear pattern of higher highs and higher lows. This strength has been reinforced by supportive central bank rhetoric and macro data favoring the kiwi. A confirmed break above 0.5850, coinciding with the 0.618 Fibonacci retracement of the late-June decline, would open the path toward the next resistance and psychological level at 0.6000.
Bearish Scenario A rejection at this critical zone, however, would hand momentum back to sellers, sending price first toward a retest of the 200-period EMA near 0.5781. A break below that level would expose the well-defended 0.5600 support once again.
With the Fed decision looming and price sitting at such a decisive technical juncture, NZD/USD looks set for a significant move next week. Can the kiwi withstand the coming dollar volatility?
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USD/CAD se drží poblíž 1,4100, protože poptávka po bezpečném dolaru převažuje nad podporou kanadského dolaru z vyšších cen ropy. Trh sleduje rezistenci 1,4115.
USD/CAD held near 1.4100 after extending its recovery, with traders watching the key 1.4115 resistance level. Safe-haven demand for the US dollar continues to outweigh support for the Canadian dollar from higher crude oil prices. A break above 1.4115 could strengthen bullish momentum, while oil prices and US economic data remain the next major catalysts. The USD/CAD exchange rate traded around 1.4101 on Tuesday after recovering steadily over the past several sessions, as renewed demand for the US dollar continued to offset the Canadian dollar’s traditional support from rising crude oil prices.
The pair has advanced despite Brent crude remaining above $90 per barrel, highlighting how geopolitical uncertainty and expectations for higher US interest rates have become the dominant drivers of currency markets.
Investors are now watching whether USD/CAD can break above 1.4115, a level that could determine whether the pair resumes its broader uptrend.
Why Is USD/CAD Rising Today? The US dollar has regained strength as investors continue to favour safe-haven assets amid escalating tensions between the United States and Iran.
The conflict has pushed oil prices sharply higher, raising concerns that inflation could remain elevated and encouraging expectations that the Federal Reserve may keep interest rates restrictive for longer.
Those expectations have supported US Treasury yields and increased demand for the dollar across the forex market.
Ordinarily, rising oil prices benefit the Canadian dollar because Canada is one of the world’s largest crude exporters. However, the current geopolitical environment has strengthened the US dollar by an even greater margin, allowing USD/CAD to continue climbing despite favourable conditions for the loonie.
How Do Higher Oil Prices Affect USD/CAD? Crude oil remains one of the most important drivers of the Canadian dollar.
When oil prices rise, Canada’s export revenues typically increase, improving the country’s trade balance and supporting the value of the Canadian dollar.
This week, however, that relationship has weakened.
Brent crude has remained above $90 per barrel after threats to shipping through the Strait of Hormuz raised concerns over global energy supplies. Instead of boosting the Canadian dollar, the oil rally has primarily fuelled inflation concerns, strengthening demand for the US dollar and limiting gains for commodity-linked currencies.
As long as geopolitical risks continue driving oil prices higher, the Canadian dollar may struggle to fully benefit from stronger energy markets.
Will USD/CAD Break Above 1.4115? The 1.4115 level has become the key technical hurdle for USD/CAD. ActionForex notes that a decisive move above this resistance would confirm that the recent pullback from 1.4247 has likely ended and increase the probability of another test of that July high.
Conversely, failure to break above 1.4115 could trigger short-term profit-taking after the pair’s recent rally. For now, the broader outlook remains constructive while the pair continues trading comfortably above the 1.3954 support area.
USD/CAD Outlook The short-term USD/CAD outlook remains tilted to the upside while the pair trades just below the key 1.4115 resistance level.
Although elevated oil prices would normally strengthen the Canadian dollar, safe-haven demand for the US dollar and expectations that the Federal Reserve could keep interest rates higher for longer continue to dominate market sentiment.
Whether USD/CAD extends its recovery will likely depend on upcoming US economic data, developments in the Middle East and the direction of crude oil prices. A convincing move above 1.4115 would strengthen the case for another attempt at 1.4247, while renewed strength in the Canadian dollar could limit further gains if oil prices continue climbing.
Why is USD/CAD rising today?
USD/CAD is rising as investors buy the US dollar amid geopolitical uncertainty and expectations that the Federal Reserve may keep interest rates higher for longer. Safe-haven demand has outweighed support for the Canadian dollar from stronger oil prices.
How do oil prices affect USD/CAD?
Higher oil prices usually strengthen the Canadian dollar because Canada is a major oil exporter. A stronger Canadian dollar typically pushes USD/CAD lower. However, during periods of heightened geopolitical risk, the US dollar can outperform despite rising crude prices.
Will USD/CAD break above 1.4115?
The 1.4115 level is the next key resistance for USD/CAD. A sustained break above this level could signal a continuation of the recent recovery and open the door for a retest of the 1.4247 high.
GBP/NZD klesl na měsíční minimum, protože novozélandská inflace ve 2. čtvrtletí zrychlila na 4,1 % a posílila sázky na další zvýšení úrokových sazeb RBNZ.
The Pound to New Zealand Dollar (GBP/NZD) exchange rate slipped to a one-month low on Tuesday after stronger-than-expected New Zealand inflation reinforced expectations for further Reserve Bank of New Zealand interest rate hikes.
At the time of writing, GBP/NZD was trading around NZ$2.2939, down approximately 0.2% on the day.
Latest — Exchange Rates:
Pound to New Zealand Dollar (GBP/NZD): 2.295692 (+0.02%)
Euro to New Zealand Dollar (EUR/NZD): 1.956495 (+0.29%)
New Zealand Dollar to Dollar (NZD/USD): 0.5827 (-0.43%)
DAILY RECAP:
The New Zealand Dollar (NZD) appreciated through Tuesday's Asian trading session as markets digested New Zealand's latest consumer price index.
According to the CPI figures published by Stats NZ, annual inflation accelerated to 4.1% in the second quarter, up from 3.1% previously and above market forecasts of 4.0%.
Perhaps more importantly, the Q2 inflation print also outpaced the Reserve Bank of New Zealand’s previous 3.9% forecast.
This prompted NZD investors to increase their bets on further monetary tightening after the RBNZ's recent decision to lift the Official Cash Rate to 2.5%.
However, the ‘Kiwi’ was unable to sustain its best levels for long, with NZD exchange rates falling back by the start of the European session as market risk appetite was sapped by the continued escalation of tensions in the Middle East.
Meanwhile, trade in the Pound (GBP) was broadly flat on Tuesday as the UK's latest jobs report helped to calm concerns over turbulence in the UK bond market at the start of the session.
The Office for National Statistics (ONS) reported that unemployment held steady at 4.9% in May, against forecasts it would rise to 5.0%, while employment growth accelerated from 100,000 to 147,000 against consensus estimates it would drop to 85,000.
The surprisingly robust jobs data was welcomed by GBP investors as it increased the chances of the Bank of England (BoE) tightening monetary policy later in the year.
However, Sterling's upside potential remained capped after the start of Andy Burnham's premiership triggered a rise in UK gilt yields as he signalled his willingness to exercise flexibility while still adhering to fiscal rules.
Near-Term GBP/NZD Forecast: Slowdown in UK Inflation to Sap Sterling? Looking ahead, the next catalyst for the Pound to New Zealand Dollar exchange rate will be the UK's latest inflation figures.
Economists expect UK inflation to have cooled further in June, with Sterling likely to come under pressure if the data weakens expectations for further Bank of England interest rate hikes.
Meanwhile, the ‘Kiwi’ could face headwinds if New Zealand's latest credit card spending figures point to a slowdown in consumer spending last month.
The British Pound (GBP) consolidates losses against the US Dollar (USD) on Wednesday, as a string of UK inflation figures provided some leeway for the Bank of England to maintain its “wait-and-see” stance through the coming months. The GBP/USD pair remains pinned near weekly lows, below 1.3400 following a nearly 1.2% decline in the last four days.
Data released by the UK National Statistics Office on Wednesday revealed that the Consumer Price Index (CPI) moderated to a 2.6% year-over-year (Y-o-Y) growth in June, from 2.8% in May, below the 2.7% forecasted by market analysts. The Core CPI, however, remained steady at 2.6% against expectations of a 2.5% reading.
Beyond that, the Input Producer Price Index (PPI) contracted 2% on the month, its sharpest decline in more than six years, while the Output PPI remained flat, undershooting expectations of a 0.4% advance. Year on year, input PPI eased to 7.3% from 9.3% while the Output PPI slowed down to 3.5% in June from 3.7% in May.
In the US, the calendar has been thin this week, but the US Dollar maintains a bid tone, buoyed by market concerns about the war in the Middle East and higher US Treasury yields. The US military pounded targets in Iran for the 11th consecutive day on Wednesday, and US President Donald Trump threatened to attack nuclear facilities, which, according to Tehran, would expand the war in the region.
UK Pound slides amid PM Burnham’s early fiscal signalsRabobank’s FX team notes that “UK markets have now had a few hours to react to PM Burnham’s new cabinet, many of whom have been involved in UK politics for years,” and the initial response has been cautious. They highlight that “10-year gilt yields are currently above the 5% level, which is a sign of some anxiety,” while “the Pound is the worst performing G10 currency on a 1-day view,” underscoring investor unease around the new administration’s fiscal direction.
In the near term, Rabobank points out that “Burnham has promised measures to ease cost-of-living pressures,” with the policy push already underway. “He kicked this off this morning with the news that VAT on household electricity bills will be cut from October,” the bank observes, adding that “the market is now bracing itself for a list of further announcements” as investors assess how these initiatives will be funded and what they might mean for UK assets.
Economic Indicator Consumer Price Index (YoY) The United Kingdom (UK) Consumer Price Index (CPI), released by the Office for National Statistics on a monthly basis, is a measure of consumer price inflation – the rate at which the prices of goods and services bought by households rise or fall – produced to international standards. It is the inflation measure used in the government’s target. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
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The Bank of England is tasked with keeping inflation, as measured by the headline Consumer Price Index (CPI) at around 2%, giving the monthly release its importance. An increase in inflation implies a quicker and sooner increase of interest rates or the reduction of bond-buying by the BOE, which means squeezing the supply of pounds. Conversely, a drop in the pace of price rises indicates looser monetary policy. A higher-than-expected result tends to be GBP bullish.
Economic Indicator Consumer Price Index (MoM) The United Kingdom (UK) Consumer Price Index (CPI), released by the Office for National Statistics on a monthly basis, is a measure of consumer price inflation – the rate at which the prices of goods and services bought by households rise or fall – produced to international standards. It is also the inflation measure used in the government’s target. The MoM figure compares the prices of goods in the reference month to the previous month. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
Britská inflace CPI za červen má podle odhadů zpomalit na 2,7 % meziročně, stále však zůstane nad cílem BoE. GBP/USD mezitím naráží na rezistenci v pásmu 1,3550–1,3560.
The UK Office for National Statistics (ONS) will release the June Consumer Price Index (CPI) figures on Wednesday at 06:00 GMT, a print that will matter for markets. Consensus expectations point to inflation pressures still above the Bank of England’s (BoE) target, although losing further momentum.
UK consumer inflation remains one of the most important inputs for the BoE and typically carries real weight for the British Pound (GBP). Following the latest cautious hold by the BoE on June 18, investors now favour a steady hand by the ‘Old Lady’ at its meeting on July 30.
What to expect from the next UK inflation report?Headline UK CPI is expected to clock 2.7% in the year to June, a tad lower than the May reading. On a monthly basis, inflation is seen gaining 0.1%, adding to the 0.2% increase recorded the previous month.
Core inflation, which strips out the more volatile food and energy components and is therefore more closely watched by the BoE, is forecast at 2.5% on an annual basis, down a tenth of percent from May.
How will the UK CPI data affect GBP/USD?The BoE met expectations and kept the bank rate unchanged at 3.75% on June 18. However, the 7–2 vote split carried a slightly more hawkish tone, with Megan Greene joining Huw Pill in supporting a 25-basis-point increase. But the larger message is patience, with policy still firmly in wait-and-see mode and market pricing that reflects that stance.
In his latest comments last week, Governor Andrew Bailey said the renewed hostilities in the Gulf highlighted the instability facing the global economy. Turning to the UK, he argued that the country was supported by both its fiscal framework and monetary policy, while stressing that the central challenge remained economic growth.
Bailey added that the UK’s core banking system was resilient and that debt levels were not overstretched. However, he warned that sustainable economic growth would not be possible without financial stability.
Implied rates currently suggest nearly 43 basis points of tightening by year-end, while consensus sees the central bank keeping its policy rate unchanged at its next gathering on July 30.
Back to technicals, Senior Analyst at FXStreet, Pablo Piovano, notes that the recent multi-week recovery in GBP/USD appears to have encountered some initial hurdle in the 1.3550-1.3560 band near the July tops. “In case bulls regain the upper hand, the next barrier emerges at the May top at 1.3653 (May 11), followed by the YTD ceiling at 1.3868 (January 27)," he adds.
On the downside, Piovano sees initial contention at current yearly lows near 1.3140 (June 24). “Further weakness from here could expose a move toward the November 2025 base at 1.3010 (November 5),” Piovano adds.
Piovano also points out that momentum indicators remain somewhat bullish for now as the Relative Strength Index (RSI) hovers just below 54, while the Average Directional Index (ADX) near 18 suggests the current trend lacks muscle.
Interest rates FAQs Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.
Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money.
Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.
The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.
Economic Indicator Consumer Price Index (MoM) The United Kingdom (UK) Consumer Price Index (CPI), released by the Office for National Statistics on a monthly basis, is a measure of consumer price inflation – the rate at which the prices of goods and services bought by households rise or fall – produced to international standards. It is also the inflation measure used in the government’s target. The MoM figure compares the prices of goods in the reference month to the previous month. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
EUR/USD klesá, protože napětí na Blízkém východě posiluje USD, a to i přes lepší než očekávané průzkumy ZEW. V eurozóně index ekonomického sentimentu vzrostl v červenci na 23,4 z 9,5 v červnu, nad odhadem 11,2. V Německu index ekonomického sentimentu stoupl na 26,3 z 10,5, výrazně nad očekáváním 18. Pár se drží kolem 1,1405.
EUR/USD edges lower on Tuesday as the US Dollar (USD) strengthens amid heightened tensions in the Middle East. At the time of writing, the pair trades around 1.1405, hovering near one-week lows.
Meanwhile, stronger-than-expected ZEW surveys provided little support to the Euro (EUR). Eurozone Economic Sentiment jumped to 23.4 in July from 9.5 in June, beating the forecast of 11.2. Germany’s Economic Sentiment Index climbed to 26.3 from 10.5, well above the market expectation of 18.
The US military carried out a tenth consecutive night of strikes against Iran, while Tehran targeted US military assets across the region. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 101.15, extending its gains for a fourth straight day.
Diplomatic efforts offer some hope of a pause in the fighting. Mediators have proposed a 10-day ceasefire aimed at reviving last month’s interim US-Iran agreement. However, continued military exchanges have disrupted energy shipments through the Strait of Hormuz, triggering a rebound in Oil prices and reigniting inflation concerns.
As a result, traders expect the European Central Bank (ECB) and the Federal Reserve (Fed) to keep monetary policy tighter for longer. Both central banks are expected to leave interest rates unchanged at their upcoming policy meetings. However, further rate hikes remain possible if inflation pressures intensify.
Euro holds tight range as ECB repricing supports but fails to spark momentumAnalysts at Scotiabank observe that short-term rates markets “are showing signs of stabilization ahead of Thursday’s ECB decision, consolidating the recent hawkish repricing that has delivered fundamental support to the EUR via yield spreads.”
In terms of policy expectations, Scotiabank highlights that “markets are pricing little change for the July 23 decision, favoring September with 22bpts of tightening currently reflected in OIS with a cumulative 43bpts by December.”
From a technical perspective, the bank’s stance remains “neutral – the EUR’s technicals are offering little in terms of momentum as the RSI shows signs of stabilization just below the neutral threshold at 50.” They add that “recent price action has been narrowly confined to a tight range roughly bound between 1.1380 and 1.1480,” and that they “remain neutral absent a meaningful push toward 1.1500 and the 50-day MA at 1.1516.”
Euro Price Today The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the British Pound.
USDEURGBPJPYCADAUDNZDCHFUSD0.06%0.41%0.28%0.19%-0.15%0.12%0.25%EUR-0.06%0.35%0.22%0.14%-0.18%0.06%0.20%GBP-0.41%-0.35%-0.11%-0.21%-0.53%-0.28%-0.15%JPY-0.28%-0.22%0.11%-0.08%-0.40%-0.17%-0.02%CAD-0.19%-0.14%0.21%0.08%-0.33%-0.08%0.06%AUD0.15%0.18%0.53%0.40%0.33%0.25%0.40%NZD-0.12%-0.06%0.28%0.17%0.08%-0.25%0.13%CHF-0.25%-0.20%0.15%0.02%-0.06%-0.40%-0.13% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
The EUR/USD pair is seen consolidating during the Asian session on Tuesday and trading just above the 1.1400 mark, or a four-day low touched the previous day. Market participants seem hesitant and keenly await the highly-anticipated European Central Bank (ECB) meeting on Thursday before positioning for the next leg of a directional move.
In the meantime, energy-driven inflation fears bolster US Federal Reserve (Fed) rate hike bets and support the US Dollar (USD) amid escalating US-Iran tensions. This could act as a headwind for the EUR/USD pair, warranting caution before confirming that the recent pullback from a four-week high, touched last Wednesday, has run its course.
Spot prices keep a bearish tone following last week's failure near the 1.1480-1.1485 region, which coincides with the 200-period Simple Moving Average (SMA). Moreover, the Moving Average Convergence Divergence (MACD) indicator remains below zero with a negative reading, while the Relative Strength Index (RSI) at 40.95 stays under the midline.
Momentum indicators together suggest waning bullish momentum and reinforce the downside bias while the EUR/USD pair remains capped beneath the 200-period SMA. This, in turn, backs the case for an eventual break below the 1.1400 round figure and a further decline towards retesting the year-to-date low, around the 1.1325 region, touched on June 24.
On the topside, initial resistance is located at the 200-period SMA around 1.1480. A sustained move above this level is needed to ease the current bearish pressure and open the way for a more constructive outlook. Nevertheless, the sub-50 RSI and negative MACD suggest that the path of least resistance for the EUR/USD pair remains to the downside.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
EUR/USD 4-hour chart
Economic Indicator ECB Press Conference Following the European Central Bank’s (ECB) economic policy decision, the ECB President gives a press conference regarding monetary policy. The president’s comments may influence the volatility of the Euro (EUR) and determine a short-term positive or negative trend. If the president adopts a hawkish tone it is considered bullish for the EUR, whereas if the tone is dovish the result is usually bearish for the Euro.
USD/CAD vzrostl poté, co Trump zavedl 50% cla na asi 20 miliard dolarů kanadského vývozu mimo rámec ochrany USMCA. Trh to vnímá jako další zásah pro kanadský dolar.
The latest US tariffs on Canadian goods may be relatively modest in size, but the market reaction suggests investors are focusing on something bigger than the immediate trade impact. USD/CAD advanced after US President Donald Trump signed three proclamations imposing 50% tariffs on about $20 billion of Canadian exports, including alcohol, dairy products, motor vehicles, cement, hockey equipment and electrical machinery. The measures will take effect in roughly 30 days and, notably, apply regardless of compliance with the US-Mexico-Canada Agreement (USMCA, known as CUSMA in Canada), while exempting energy, potash, critical minerals and products already subject to Section 232 duties.
The significance lies less in the sectors affected than in what the latest move says about US trade policy. Since early 2025, Washington has repeatedly expanded tariffs on Canadian goods using different legal authorities rather than relying on the framework established by USMCA. Each new measure reinforces the perception that the agreement is providing less practical protection against unilateral trade actions. As a result, markets are increasingly treating US-Canada trade friction as a structural issue rather than a series of isolated disputes, adding another headwind to Canada’s economic outlook just as uncertainty surrounding the formal USMCA review continues to build.
Canada’s response has so far stopped short of matching Washington’s escalation. Prime Minister Mark Carney reiterated his preference for negotiations and emphasized strengthening Canada’s domestic economy, while Ontario Premier Doug Ford urged Ottawa to retaliate “tariff for tariff, dollar for dollar.” Whether the federal government adopts a more confrontational stance will likely determine how far trade tensions escalate. For now, the new tariffs represent another obstacle for the Canadian Dollar, particularly if investors begin pricing a more prolonged drag on growth.
Technically, USD/CAD is also sending a constructive signal for Dollar bulls. The rebound from 1.4002 followed successful tests of both 55 D EMA (now at 1.4002) and 1.3965 cluster support (38.2% retracement of 1.3480 to 1.4247 at 1.3954), suggesting the decline from 1.4247 was corrective rather than the start of a broader reversal. Firm break above 1.4115 minor resistance would strengthen the case that the broader uptrend from the 2026 low at 1.3480 is resuming, bringing another challenge of the 1.4247 high into view.
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Novozélandská inflace v červnovém čtvrtletí vzrostla na 4,1 %, ale jádrové tlaky dál slábnou a inflace obchodovatelných položek byla pod prognózou RBNZ. To drží ve hře zářijové zvýšení sazeb, i když trh možná přehání další utahování.
Headline inflation beats, underlying pressures easing Tradables prices undershoot RBNZ's forecast September RBNZ hike likely, longer-term pricing looks excessive NZD/USD bulls retain technical advantage above support AUD/NZD breakdown keeps sellers firmly in control A beat, but with important caveats New Zealand consumer prices rose 1.5% in the June quarter, lifting the annual inflation rate to 4.1%. While that was above the 4.0% increase expected by economists, it fell just short of the Reserve Bank of New Zealand's 4.2% forecast released in May.
That suggests inflation remains uncomfortably high and is likely to keep the RBNZ on course to tighten policy further. However, the underlying details were more encouraging, with the broadest measure of core inflation easing further and domestic price pressures evolving broadly as the central bank had anticipated.
The composition of the report was arguably more important than the headline. While annual inflation accelerated, much of the increase reflected higher tradeable prices, which are influenced by developments offshore rather than domestic demand.
Source: FOREX.com, RBNZ, StatsNZ
Tradeable inflation accelerated to 4.9% over the year, driven largely by a 27.5% jump in petrol prices and a 71.0% surge in other vehicle fuels and lubricants. However, that was well below the RBNZ's 5.6% forecast, explaining why headline inflation also undershot the central bank's expectations.
By contrast, non-tradeable inflation, which is viewed as a better gauge of domestically generated price pressures, eased to 3.4% and matched the RBNZ's forecast. Electricity and local authority rates provided the largest upward pressure, while lower real estate services prices helped offset some of the increase.
The broadest measure of underlying inflation, CPI excluding the food group, household energy subgroup and vehicle fuels, also continued to ease, slipping to 2.5% from 2.6%. While it remains in the upper half of the RBNZ's 1–3% target band, the continued moderation suggests underlying inflation pressures are still moving in the right direction rather than becoming more entrenched.
Traders should now watch the release of the RBNZ's Sectoral Factor Model at 3pm Wellington time. The measure, which strips out temporary price movements to provide another gauge of underlying inflation, printed at 2.7% in the March quarter and could influence moves in New Zealand financial markets should it deliver a meaningful surprise.
What it means for the RBNZ
Source: Bloomberg
When all said and done, today's report is unlikely to materially alter the RBNZ's near-term thinking. Inflation remains above target and the central bank has already adopted an explicit tightening bias. Another 25 basis point increase in September still looks very likely and is close to fully priced, with the risk of a second move by October also deemed slightly more likely than not ahead of November's general election.
Further out, though, market pricing looks far too punchy. Overnight index swaps continue to imply close to five additional quarter-point increases by May next year, taking the OCR to around 3.75%.
That profile looks too aggressive given the broader economic backdrop. While inflation remains high, underlying price pressures continue to ease and there is still ample slack in the labour market, with little evidence that wage growth is accelerating in a way that would warrant taking policy deep into restrictive territory.
The next major test for that view will come on 13 August, when the RBNZ releases its latest Survey of Expectations. Of particular interest will be the two-year inflation expectations measure, which climbed to 2.53% in May from 2.37% previously.
Another meaningful acceleration would strengthen the case for additional tightening, potentially even a 50 basis point move, which can't be ruled out given some of the hawkish rhetoric from external members of the Monetary Policy Committee. But if inflation expectations fail to accelerate again, it would cast doubt on the degree of tightening currently priced into the OIS curve.
At face value, today's report may be interpreted as hawkish given headline inflation exceeded economists' forecasts. I'm not convinced that's the right read. The underlying detail tells a different story, particularly with the broadest measure of core inflation continuing to ease and tradables inflation coming in well below the RBNZ's own forecast.
That's just one of several factors to consider when assessing directional risk for the Kiwi dollar. While domestic rates remain an important driver, recent price action has also become increasingly sensitive to broader risk appetite and changes in US interest rate expectations. Starting with NZD/USD, here's how the technical picture stacks up.
The battleground for Kiwi bulls
Source: TradingView
The RBNZ's hawkish tilt has helped support NZD/USD over recent weeks, allowing the pair to reclaim a cluster of key medium and long-term moving averages.
For now, though, it's a game of ping-pong. Buyers continue to emerge on dips towards the 100-day moving average, while rallies are being capped ahead of resistance at 0.5860. That's the initial range to watch.
The oscillators continue to favour the bulls. RSI (14) remains comfortably above the neutral 50 level at 63, while MACD has crossed above its signal line and remains in positive territory.
Should the pair break decisively above 0.5860, the next upside level to watch is 0.5920, an area that repeatedly acted as both support and resistance during April, May and June. Above that, attention shifts to 0.5992, the double top established earlier this year.
On the downside, initial support is provided by the 100, 200 and 50-day moving averages, along with horizontal support at 0.5796, another level that has repeatedly acted as both support and resistance in recent weeks. A break beneath the latter could open the door for a retracement towards 0.5747, with 0.5724 and the uptrend from the June lows the next levels to watch.
Breakdown keeps bears in control
Source: TradingView
As flagged earlier this month, AUD/NZD has broken below the uptrend from the June 2025 lows, with the pair also slipping beneath the 50 and 100-day moving averages. Along the way, it took out support at 1.2053 and 1.2000 before finding buyers at 1.1950.
For now, the pair is stuck in a narrow range between 1.2000 and 1.1950. We did see a bullish engulfing candle print on Monday following renewed upside in energy prices as the conflict in the Middle East escalated. However, that has not generated follow-through buying, with rallies continuing to stall ahead of 1.2000.
The message from the oscillators remains bearish. RSI (14) continues to set lower highs and sits well below the neutral 50 level at 33. That bearish message is being reinforced by MACD, which remains below its signal line and in negative territory.
Selling rallies and downside breaks remains the preferred strategy. Should the pair break decisively beneath 1.1950, there is little in the way of technical support until the 200-day moving average at 1.1835, followed by 1.1797, former resistance before February's upside breakout.
Should the pair reclaim 1.2000, the next upside levels to watch are 1.2053, followed by the confluence of the 100-day moving average and resistance at 1.2115. For now, though, selling rallies and downside breaks remains the preferred strategy.
From a fundamental perspective, with New Zealand's inflation report now out of the way, attention will quickly shift to Australia's labour force report on Thursday. Alongside broader risk sentiment, the release is likely to be influential on markets' assessment of the directional risks for the RBA cash rate moving forward.
Kanadský dolar v pondělí oslabil po slabší inflaci a zprávě, že USA uvalí na kanadské produkty nová 50% cla. USD/CAD tak přidal 0,5 % a zaznamenal největší denní zisk za 23 seancí.
The Canadian dollar was the weakest-performing major currency on Monday after softer-than-expected inflation data reduced expectations of further Bank of Canada policy tightening. Cooling headline and core inflation diminished Canada's relative yield advantage, weighing on the Loonie despite the central bank leaving its policy rate unchanged at 2.25%. Separately, reports that the US and Iran had signed a memorandum aimed at ending the conflict weighed on oil prices, adding further pressure to the oil-sensitive Canadian dollar. The loonie then came under renewed selling late in the US session after Reuters reported that Washington would impose new 50% tariffs on Canadian products.
Source: LSEG
Trump's Tariffs Add to Pressure on the Canadian Dollar The proposed 50% tariffs on Canadian products add a fresh headwind for the loonie by threatening Canada's export outlook and economic growth. Slower growth could reinforce expectations that the Bank of Canada will keep interest rates on hold or even consider easing if the economic impact proves material, reducing the Canadian dollar's yield appeal relative to the US dollar. While the full scope and timing of the tariffs remain uncertain, the announcement was enough to fuel another leg higher in USD/CAD.
USD/CAD Technical Analysis: US Dollar vs Canadian Dollar USD/CAD posted its largest daily gain in 23 sessions, rising 0.5% after finding support at the 50-day EMA and the 1.40 handle, strongly suggesting a swing low may be in place, at least in the near term. It has been just under a month since USD/CAD peaked, and recent developments suggest the pair could extend its rebound towards the 2025 high at 1.4140.
The 1-hour chart shows support has emerged around the weekly pivot point for now, although the sharp momentum shift below ¥116 suggests bears may look to sell into minor pullbacks. A break below 115.31 would bring the 115.00 handle into focus, followed by a key support zone around 114.60 where the monthly and weekly pivot points converge.
Source: ICE, TradingView
CAD/JPY Technical Analysis: Canadian Dollar vs Japanese Yen While crude oil prices didn’t exactly roll over on Monday, they did form doji’s on the daily chart to show indecision. Given but WTI and brent crude have stalled around their respective resistance levels, it removes another pillar of support for CAD/JPY – which is leaving bearish reversal signals of its own.
CAD/JPY formed a notable bearish engulfing candle on Monday to mark its second worst day of the month. Given it formed around 1.16 after a solid bounce, the case for a pullback was arguably growing anyway.
The 1-hour chart shows support has been found around the weekly pivot point for now, though the sharp momentum shift below 116 suggests bears may be seeking to fade into minor pullbacks, A break below 115.31 brings the 115 handle, and tight support zone around 114.6 into focus comprising of the monthly and weekly pivot points.
USD/CAD Key Points Canadian inflation cooled more sharply than expected in June, easing concerns that the recent energy-driven increase was spreading across the broader economy. Headline CPI slowed to 2.8% y/y from 3.2% in May; Excluding gasoline, inflation held steady at 2.2% y/y. USD/CAD remains near a 1-month low, but a possible bullish engulfing candlestick pattern that would strengthen the argument for a near-term bottom.
A week after a similarly below-expectation report from the US, Canadian inflation cooled more sharply than expected in June, easing concerns that the recent energy-driven increase was spreading across the broader economy. Headline CPI slowed to 2.8% y/y from 3.2% in May, while prices fell -0.4% m/m. On a seasonally adjusted basis, CPI declined -0.1%.
The slowdown was largely driven by gasoline, which fell -10.2% from May as global oil prices retreated. Gasoline remained 20.5% more expensive than a year earlier, but that was well below May’s 33.2% increase. Excluding gasoline, inflation held steady at 2.2% y/y.
The underlying details were also encouraging. The Bank of Canada’s preferred CPI-trim and CPI-median measures eased to 1.8% and 1.9%, respectively, leaving their average below the 2% target. Grocery inflation remained relatively firm at 3.9%, while World Cup-related demand pushed accommodation and air travel prices sharply higher. However, those increases were concentrated rather than widespread and are likely to dissipate soon with the tournament wrapping up this weekend.
For the Bank of Canada, the report supports the view that higher energy costs have not generated significant second-round inflation yet. With economic growth beginning to recover, the most likely outcome remains an extended hold at 2.25%, assuming oil prices stabilize and core inflation stays contained, though energy volatility from the ongoing conflict in Iran could still have a spillover impact on Canada’s oil-dependent economy in the coming months.
Canadian Dollar Technical Analysis: USD/CAD Daily Chart
Source: Tradingview, StoneX
From a technical perspective, USD/CAD is bouncing from support at its 50-day EMA near 1.4025, helped along by this morning’s softer-than-anticipated Canadian data. The North American pair remains near a 1-month low, but the combination of a BOC in stasis and the potential for safe-haven demand for the US dollar amid the re-escalating Iranian conflict could boost the pair as we move through the week. Current price action is showing a possible bullish engulfing candlestick pattern that would strengthen the argument for a near-term bottom.
Looking ahead, previous-support-turned-resistance at 1.4130 is the next level of resistance to watch before the 1+ year highs in the low-1.4200s, whereas a break below the 50-day EMA near 1.4020 could target the 38.2% Fibonacci retracement of the May-July rally below 1.4000.
-- Written by Matt Weller, Global Head of Research
Check out Matt’s Daily Market Update videos on YouTube and be sure to follow Matt on Twitter: @MWellerFX
Bank of America čeká, že EUR/USD klesne na 1,12 do konce 3. čtvrtletí a do konce roku 2026 se vrátí na 1,15. Důvodem má být výhoda výnosů dolaru a slabší výhled eurozóny.
Foreign exchange analysts at Bank of America forecast the Euro to weaken against the US Dollar over the coming months, projecting EUR/USD will fall to 1.12 in the third quarter before recovering to 1.15 by the end of 2026.
The Euro to Dollar exchange rate (EUR/USD) traded around 1.15 on Monday after recovering from recent lows near 1.12, but remains below this year's highs close to 1.20 as investors continue to favour the higher-yielding US Dollar.
Latest — Exchange Rates:
Euro to Dollar (EUR/USD): 1.141798 (-0.17%)
Pound to Dollar (GBP/USD): 1.345558 (+0.01%)
Dollar to Yen (USD/JPY): 162.41676 (+0.01%)
The recent recovery in EUR/USD has come as the Dollar paused after a strong first half of the year. However, Bank of America believes the broader trend still favours the US currency, arguing that resilient US growth, relatively high Treasury yields and continued demand for Dollar-denominated assets should underpin the greenback.
The bank expects the Federal Reserve to remain more restrictive than many of its peers, preserving the Dollar's yield advantage even if interest rates gradually move lower.
"We expect EUR/USD to finish 2026 at 1.15."
BofA believes the path to that year-end forecast will not be smooth, with further Dollar strength likely over the coming months.
"Our forecasts are for EUR/USD at 1.12 by the end of the third quarter before recovering to 1.15 by year-end."
The bank also points to the Eurozone's weaker growth outlook and greater exposure to higher energy costs as factors that could continue to weigh on the single currency. Although investor positioning has become less negative on the Euro, BofA argues much of the earlier short-covering has already taken place, reducing scope for another sharp rally.
Looking further ahead, the outlook becomes more constructive for the Euro as the Dollar's exceptional performance gradually fades.
"We forecast EUR/USD at 1.20 by end-2027 and 1.22 by end-2028."
BofA believes that longer-term recovery will be driven by a gradual narrowing in growth and interest-rate differentials rather than by a sharp deterioration in the US economy.
Near-Term EUR/USD Forecast: BofA Sees Dollar Yield Advantage Limiting Euro Gains Despite expecting EUR/USD to recover from its projected third-quarter lows, Bank of America believes the Dollar should remain well supported over the remainder of 2026.
"The Dollar's yield advantage should continue to underpin the currency."
For now, the bank expects rallies in EUR/USD to remain limited while US yields stay elevated and capital continues to flow into US assets. It argues that only a more pronounced slowdown in the US economy or a materially faster Federal Reserve easing cycle would be likely to push the pair sustainably above the mid-1.15 area.
Morgan Stanley čeká, že GBP/AUD klesne na 1,82, protože vidí silnější australský dolar a rostoucí fiskální rizika ve Spojeném království. Banka zůstává na libře pesimistická.
Morgan Stanley expects the Pound to weaken against the Australian Dollar over the coming months, forecasting GBP/AUD will fall to 1.82, as improving sentiment towards Australia contrasts with growing political and fiscal risks in the UK.
The Pound to Australian Dollar exchange rate (GBP/AUD) traded around 1.93 on Monday after rebounding from June lows below 1.90, leaving the pair close to its highest levels of the year despite the bank believing the rally has gone too far.
Latest — Exchange Rates:
Pound to Australian Dollar (GBP/AUD): 1.917965 (-0.49%)
Pound to Dollar (GBP/USD): 1.345149 (-0.02%)
Australian Dollar to Dollar (AUD/USD): 0.701342 (+0.47%)
Morgan Stanley remains one of the more bearish investment banks on Sterling, arguing that much of the recent optimism surrounding the UK's political outlook has already been priced into the currency.
"We are bearish GBP."
The bank says Sterling rallied after reports that the incoming government could appoint a more fiscally conservative Chancellor than initially feared, but believes investors have already discounted much of that positive news.
"We think the market has priced in the 'good news' from the potential for a more fiscally conservative Chancellor than initial market expectations."
Morgan Stanley adds that there is still little clarity on the new government's economic agenda, while attention is likely to shift towards difficult fiscal decisions ahead of the autumn Budget.
"With so much good news already in the price, we think the hurdle for further upside surprises has moved higher."
In contrast, the bank retains a constructive view on the Australian Dollar. It points to resilient business confidence, attractive carry returns and expectations that Australian front-end yields will remain relatively elevated.
"We remain bullish on AUD."
Morgan Stanley believes steady labour market conditions and relatively hawkish Reserve Bank of Australia expectations should continue to attract investors seeking higher-yielding currencies.
Near-Term GBP/AUD Forecast: Morgan Stanley Expects Sterling to Give Back Recent Gains Reflecting these contrasting outlooks, Morgan Stanley continues to recommend a short GBP/AUD trade.
The bank has a target of 1.82, representing a decline of around 6% from current levels.
"GBP/AUD faces downward pressure from elevated risk appetite and a potential increase in GBP negative risk premium."
Morgan Stanley believes the combination of stronger Australian fundamentals and rising UK fiscal uncertainty should allow the Australian Dollar to outperform Sterling over the coming months, particularly if global risk sentiment remains supportive.
EUR/USD se drží poblíž 1,1440, protože sázky na další zvýšení sazeb ze strany ECB vyvažuje poptávka po dolaru jako bezpečném přístavu. Klíčová zůstává zóna resistance 1,1470–1,1500.
EUR/USD traded near 1.1440 after recovering from recent lows, supported by expectations that the European Central Bank could raise interest rates again in September. The euro’s advance remains limited as escalating US-Iran tensions and oil prices above $90 increase safe-haven demand for the US dollar. EUR/USD must clear the 1.1470–1.1500 resistance zone to strengthen its recovery, while 1.1400 remains the first major support level. The EUR/USD exchange rate held near 1.1440 on Monday as traders weighed the prospect of another European Central Bank interest rate increase against renewed demand for the US dollar amid escalating tensions between Washington and Tehran.
The currency pair was trading around 1.1437 at the time of writing, having pulled back from last week’s high near 1.1480. The euro remains supported by expectations that the ECB will retain a hawkish bias at this week’s policy meeting, even though policymakers are widely expected to leave borrowing costs unchanged.
However, the dollar has regained some ground as the US-Iran conflict intensifies and disruption to oil shipments through the Strait of Hormuz pushes energy prices higher. Brent crude rose above $90 a barrel, reviving inflation concerns and strengthening the case for the Federal Reserve to maintain higher interest rates.
Why Is EUR/USD Rising Today? The euro has found modest support from changing expectations for ECB monetary policy.
The ECB is expected to keep its deposit rate unchanged at 2.25% when officials meet on Thursday. Nevertheless, a Reuters poll found that most economists expect another rate increase later this year, with September emerging as the most likely timing.
That outlook has become more credible following the renewed increase in energy prices. Eurozone inflation eased to 2.8% in June but remains above the ECB’s 2% target, while rising oil and gas costs threaten to create another wave of price pressure.
Consequently, the euro has retained support even as the ECB prepares to pause after its previous rate increase. Traders will pay close attention to President Christine Lagarde’s comments for any indication that September remains a live option.
Will the ECB Raise Interest Rates in September? A September rate increase is increasingly becoming the central question for the EUR/USD forecast.
Around 70% of economists surveyed by Reuters expect the ECB to raise rates once more before the end of 2026. However, policymakers must balance renewed inflation risks against a weak eurozone economy, which expanded by only 0.2% during the latest quarter.
The ECB’s challenge is that higher energy prices can simultaneously lift inflation and weaken economic activity. Businesses face higher operating costs, while households have less disposable income available for other goods and services.
A clearly hawkish message from Lagarde could help EUR/USD challenge 1.1500. Conversely, a more cautious tone that emphasises weak growth could encourage traders to reduce expectations for a September move and weigh on the euro.
How Are US-Iran Tensions Affecting EUR/USD? Escalating hostilities between the United States and Iran are preventing a stronger euro recovery.
The United States carried out a ninth consecutive night of strikes, while Iran warned that the Strait of Hormuz would remain unsafe for oil, gas and petrochemical shipments. Ship traffic through the strategically important waterway has declined sharply, contributing to Brent crude’s move above $90 and WTI’s rise beyond $84.
The development creates two headwinds for EUR/USD.
First, geopolitical uncertainty increases demand for the US dollar as investors move toward highly liquid safe-haven assets. Second, Europe is particularly exposed to imported energy costs, meaning a sustained oil shock could weaken the eurozone growth outlook even while forcing the ECB to keep monetary policy restrictive. The dollar has therefore remained resilient despite recent evidence that US inflation had begun to moderate. Markets are also pricing an increased possibility of another Federal Reserve rate rise before the end of the year.
EUR/USD Technical Analysis: Can the Euro Break Above 1.1500? The one-hour chart shows EUR/USD consolidating near 1.1437 after its retreat from the 1.1480 area. Price is hovering around the middle Bollinger Band near 1.1436, indicating that neither buyers nor sellers currently have firm control.
The Moving Average Convergence Divergence indicator is beginning to stabilise after turning negative during the latest pullback. However, momentum remains limited, suggesting that the pair may continue trading sideways unless a fresh fundamental catalyst emerges.
Immediate resistance is located between 1.1445 and 1.1470, where the upper Bollinger Band and recent intraday highs are concentrated. A sustained move above 1.1470 would expose the psychologically important 1.1500 level.
A close above 1.1500 would improve the short-term structure and could open a move toward 1.1580 and 1.1620.
On the downside, 1.1425 provides initial support near the lower Bollinger Band. The more important level is 1.1400, which has repeatedly attracted buyers. A decisive break beneath 1.1400 would weaken the recovery and bring 1.1375 back into focus, followed by 1.1320.
EUR/USD Outlook Ahead of the ECB Rate Decision The immediate EUR/USD outlook hinges on whether the ECB validates market expectations for another rate increase in September.
A hawkish policy statement could help the euro test 1.1470 and 1.1500, particularly if Lagarde signals that higher energy prices pose a material threat to inflation. However, the dollar is likely to remain supported while the US-Iran conflict disrupts energy markets and drives investors toward safety.
For now, EUR/USD appears caught between a more hawkish ECB outlook and a stronger geopolitical bid for the dollar. That leaves the pair vulnerable to further consolidation until Thursday’s ECB decision provides a clearer policy signal.
Why is EUR/USD rising today?
EUR/USD is finding support as investors expect the European Central Bank to retain a hawkish stance and potentially raise interest rates again in September. However, gains remain limited by safe-haven demand for the US dollar.
How will the ECB interest rate decision affect EUR/USD?
A hawkish ECB decision would likely support the euro by strengthening expectations for higher interest rates. A cautious statement focused on weak economic growth could weigh on EUR/USD and bring the 1.1400 support level back into focus.
The Euro to Dollar (EUR/USD) exchange rate is trading around 1.1440 after recovering from June lows near 1.1325, but Goldman Sachs believes options markets are signalling renewed downside risks for the pair.
EUR/USD has remained relatively stable through July, gaining around 0.3% so far this month after falling more than 2% in June.
Goldman Sachs highlights developments in the options market, particularly swaptions, as a warning that investors may be preparing for greater downside exposure in the Euro-Dollar pair.
The bank argues that while EUR/USD has been supported by a period of Dollar weakness and reduced expectations for aggressive Federal Reserve tightening, the balance of risks has become less favourable for the Euro.
A key concern is that markets may have become too comfortable with the recent range-bound environment. Renewed volatility, changes in interest-rate expectations or a return of Dollar demand could quickly challenge EUR/USD support.
Goldman Sachs continues to monitor the interaction between rates markets and currency positioning, with options pricing suggesting investors are increasingly willing to protect against a move lower.
The Euro also faces challenges from the broader macro backdrop. While expectations for further European Central Bank tightening have provided some support, growth concerns and energy-related risks remain potential headwinds.
With EUR/USD currently holding close to the 1.14 area, Goldman Sachs sees the options market as highlighting the possibility that the next significant move could be lower rather than a continuation of the recent recovery.
The Euro to Dollar exchange rate is trading around 1.1440 after remaining relatively resilient through July, but HSBC expects renewed US Dollar strength to weigh on EUR/USD over the coming months.
HSBC argues that the recent Dollar recovery reflects a combination of resilient US growth, interest-rate expectations and the relative attractiveness of US assets.
The bank expects the Federal Reserve to remain cautious on easing policy, while the Eurozone faces weaker growth prospects and ongoing uncertainty linked to energy prices.
HSBC’s outlook is based on a view that the Dollar’s recent weakness will prove temporary as markets refocus on rate differentials and the strength of the US economy.
The bank highlights that geopolitical risks and higher energy prices remain particularly challenging for Europe, with renewed pressure on gas supplies posing a threat to Eurozone growth and inflation.
According to HSBC, the Euro’s recent resilience does not change the broader outlook, with the currency still vulnerable if investors return to favouring US assets.
The bank sees EUR/USD falling towards 1.10 as the Dollar gradually regains ground, with the widening contrast between US economic performance and European challenges expected to remain a key driver.
However, HSBC acknowledges that the path lower may not be straightforward, with periods of Dollar consolidation possible as markets continue to assess Federal Reserve policy and global risk conditions.
The EUR/TRY pair is testing a major 54.00 resistance level, a psychological barrier that previously triggered a significant technical rejection of the euro Persistent double-digit inflation and high energy import costs continue to structurally weaken the Turkish lira against the euro’s ongoing upward momentum Traders are awaiting the July 23 central bank policy meeting, where any unexpected hawkish signals could spark a sharp rally in the lira The euro has regained some ground against the Turkish lira after a period of decline in late June. The pair is currently trading near the 54.00 level, which has previously acted as a resistance point. This technical level raises questions about the potential for further advances and the continuation of the broader upward trend.
Why the Lira Keeps Losing Ground Several factors are contributing to the lira’s continued depreciation. Turkey is experiencing persistent high inflation, with the annual rate at 32.11% in June, a slight decrease from 32.61% in May. This figure remains significantly above the central bank’s medium-term objectives.
The Central Bank of the Republic of Turkey (CBRT) has maintained its policy rate at 37% for three consecutive meetings. This pause followed an aggressive easing cycle, which was complicated by rising energy prices due to Middle East conflict, impacting the path to lower inflation.
Turkey relies heavily on imported energy, so when Brent crude oil prices jump, it puts a strain on the country’s trade balance. This forces local businesses to keep selling lira to buy foreign currency to pay for fuel.
Governor Fatih Karahan has clearly stated that the bank needs to see more solid proof of inflation slowing down and better clarity on the geopolitical situation before they start cutting rates again. The next policy meeting is on July 23. Until then, the central bank’s message is basically wait and see.
Can the EUR/TRY Pair Break 54.00? Regarding the potential for the EUR/TRY pair to break above 54.00, the underlying macroeconomic conditions have not substantially changed, suggesting a continued test of recent highs. Analysts describe the lira’s depreciation as a managed, gradual movement rather than a sharp devaluation.
The CBRT has intervened periodically to moderate volatility without reversing the overall trend. This approach typically results in incremental movements toward resistance levels, which is consistent with the pair’s two previous attempts at the 54.00 mark.
For a decisive break, we’d probably need one of a fresh worsening of Turkish inflation expectations, a hawkish surprise from the ECB, or renewed geopolitical escalation pushing energy prices even higher. Without one of those catalysts, the pair might just keep consolidating right below that barrier.
If the EUR/TRY fails to break past this barrier over the next few sessions, a technical double-top pattern could emerge. This would likely trigger quick profit-taking by short-term momentum traders, potentially sending the pair sliding back down to test support at 53.50 and 53.12.
The Euro is also fighting its own battle. Softening economic growth indicators in the Eurozone or a shift by the ECB towards a more aggressive rate-cutting cycle could diminish the euro’s inherent buying support, thereby capping upside potential for the EUR/TRY.
Why is EUR/TRY struggling near 54.00?
This level marked a prior rejection point, and with no fresh catalyst yet, the pair is consolidating there rather than breaking through decisively.
Where does the Central Bank of the Republic of Turkey’s primary benchmark one-week repo rate currently sit?
The Monetary Policy Committee of the Central Bank of the Republic of Turkey has held its key one-week repo interest rate at 37%.
Why does a rise in global oil prices structurally weaken the Turkish lira against major foreign currencies?
Turkey imports nearly all its energy. Therefore, surging oil costs widen its trade deficit by forcing domestic firms to sell lira for foreign currencies.
AUD/JPY prorazil nad 113,00 hlavně kvůli slabosti jenu, ne kvůli výrazné síle australského dolaru. Podporují ho sázky na další zvýšení sazeb RBA a pevné ceny komodit. Kurz se přitom přiblížil 113,39.
The AUD/JPY pair broke past the 113.00 resistance level following previous quiet six session bounds between 111.95 and 112.81 Yen weakness was fueled by interest rate differences and market confusion over speculation that Japan's massive pension fund might relocate foreign assets back home The Aussie dollar found solid fundamental support as global commodity prices remained firm despite the geopolitical tensions in the Middle East After six sessions trading within a tight range of 111.95 to 112.81, the AUD/JPY pair moved decisively higher on Tuesday. It surpassed the 113.00 psychological level and continued its ascent today, nearing 113.39. So, what changed?
Speculation Over the World’s Largest Pension Fund Triggers Yen Selloff Headlines regarding Japan’s Government Pension Investment Fund (GPIF) appear to be the primary driver behind the yen’s recent decline. Reports suggest the government is considering encouraging the massive pension fund to increase its investments in domestic assets to support local markets and the yen. While this sounds like it should strengthen the Japanese currency, the market reacted with immediate skepticism.
This skepticism stems from past attempts by the Japanese finance ministry to support the yen, which proved costly and ineffective. As CNBC reported, Tokyo’s finance ministry burned through roughly $73 billion defending the yen back in April and May, only to watch it slide right back toward the levels it started from.
Analysts suggest the yen’s weakness is rooted in structural issues. These include Japan’s growing public debt, a government focused on reflation, and inflation expectations that are not aligning with typical interest rate differentials.
On the Aussie side, the Reserve Bank of Australia has hiked its cash rate three times this year to 4.35%. Despite holding rates steady in June, RBA meeting minutes indicated ongoing concerns about inflation exceeding the target, with core inflation accelerating even as headline inflation eased.
A Finder survey of more than 40 economists shows 55% of them expect at least one more rate hike this year, likely in August. This policy stance supports Australian yields and the carry appeal of the Australian dollar.
Commodity prices and China’s economic performance also play a significant role. Australia, as a major exporter of iron ore, coal, and liquefied natural gas, benefits from resilient demand from China. Positive economic indicators from Beijing have bolstered risk sentiment and AUD strength.
Market Outlook Signals Bullish Bias with Caution This breakout suggests a constructive near-term outlook for AUD/JPY, potentially targeting higher levels if policy divergence persists and global risk conditions remain favorable.
For those considering trading this breakout, entering at current levels around 113.40 presents some short-term risk. A sustained move above 113.58 on a daily closing basis would be the next key level to watch, potentially opening the way toward 113.90 and the 52-week high zone around 114.90.
Below the surface, though, this rally is fragile. A significant risk to long positions is the potential for direct market intervention by the Bank of Japan or the Ministry of Finance to support the yen. Such action could lead to a rapid and substantial decline in the AUD/JPY pair.
Why did AUD/JPY break above 113.00 this week?
The breakout was caused by a combination of RBA rate-hike expectations supporting the Aussie and persistent yen weakness tied to Japan’s debt concerns and ineffective currency intervention.
Is the Australian dollar actually getting stronger?
The Australian dollar’s appreciation appears to be more a reflection of yen weakness than a substantial increase in the Australian dollar’s strength, although RBA policy has contributed positively.
How does China’s economy influence Australian dollar strength?
Stronger Chinese demand for commodities like iron ore and coal increases Australia’s export revenues, improving its terms of trade and supporting the AUD.
GBP/JPY vystoupal na nové týdenní maximum kolem 217,70 a drží se blízko nejvyšší úrovně od ledna 2008. Široký úrokový diferenciál mezi Británií a Japonskem dál tlačí japonský jen níž.
The GBP/JPY cross scales higher for the second straight day and climbs to a fresh weekly top, around the 217.70 region, during the first half of the European session on Wednesday. Moreover, spot prices remain within striking distance of the highest level since January 2008 and seem poised to appreciate further amid a supportive fundamental backdrop.
Despite looming intervention risks, the Japanese Yen (JPY) continues with its relative underperformance on the back of the wide gap in borrowing costs between Japan and other major economies, including the UK. The Bank of Japan (BoJ) raised the short-term policy rate in June to 1% or, the highest level since 1995, while the Bank of England's (BoE) base rate sits at 3.75%. This leaves an approximate gap of 275 basis points (bps), which keeps the so-called JPY carry trade active and continues to act as a tailwind for the GBP/JPY cross.
Meanwhile, Japan's economy is highly vulnerable to energy supply disruptions in the Strait of Hormuz as it relies on the Middle East for over 90% of crude oil imports. The closure of the critical waterway, along with a further escalation of tensions between the US and Iran, turns out to be another factor undermining the JPY. The British Pound (GBP), on the other hand, benefits from fading UK political uncertainty, hawkish BoE signals, and modest US Dollar (USD) weakness. This validates the positive outlook for the GBP/JPY cross and favors bulls.
Speaking before the Treasury Select Committee, BoE Governor Andrew Bailey warned on Tuesday of the potential effects of the resumption of the US-Iran conflict and that the event has demonstrated that inflation has not eased enough. Traders were quick to fully price in at least one 25 bps rate increase by year-end, and a possible first hike as early as September. This, in turn, suggests that the path of least resistance for the GBP/JPY cross is to the upside, and any corrective pullback is more likely to be seen as an opportunity for bullish traders.
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.
Commodity-linked currencies strengthened after US inflation data came in weaker than expected. The Consumer Price Index (CPI) slowed to 3.5% year-on-year in June, below the 3.8% forecast, while core inflation eased to 2.6% versus expectations of 2.8%. On a monthly basis, headline CPI unexpectedly fell by 0.4%, while core CPI was unchanged. The moderation in inflationary pressure increased expectations that the Federal Reserve may adopt a more accommodative policy stance, putting pressure on the US dollar and supporting both the Australian and Canadian dollars against the greenback.
However, despite the weaker US dollar, the next move in USD/CAD will largely depend on the Bank of Canada’s policy decision. Later today, the central bank will announce its interest rate decision, publish its updated Monetary Policy Report, and hold a press conference with the Governor. If policymakers maintain a cautiously hawkish tone on inflation, the Canadian dollar could receive additional support. Conversely, a more dovish message may limit CAD gains despite the broader weakness in the US dollar.
Market participants will also focus on the release of the US Producer Price Index (PPI), which will provide further insight into inflation trends following the softer CPI report. In addition, US crude oil inventory data could influence USD/CAD, as oil prices traditionally have a significant impact on the Canadian dollar.
AUD/USD The AUD/USD pair continues to develop the bullish engulfing reversal pattern. Yesterday, buyers managed to test the key resistance level around 0.7000. If the pair secures a sustained break above this level, the rally could extend towards the 0.7080–0.7130 area. The bullish scenario would be invalidated by a move below 0.6900.
Key events for AUD/USD:
Today at 14:00 (GMT+3): US MBA Mortgage Market Index Today at 15:30 (GMT+3): US Producer Price Index (PPI) Today at 15:45 (GMT+3): Speech by FOMC member John Williams
USD/CAD Following confirmation of the bearish tower top reversal pattern, selling pressure on USD/CAD intensified, reinforced by the weaker-than-expected US inflation data. As a result, the pair declined below 1.4100. Technical analysis suggests there is scope for a further move lower towards the 1.3960–1.4020 area. A decisive break back above 1.4120 could revive the bullish outlook.
Key events for USD/CAD:
Today at 16:45 (GMT+3): Bank of Canada interest rate decision Today at 17:30 (GMT+3): US Crude Oil Inventories Today at 17:30 (GMT+3): Bank of Canada press conference
Overall, the weaker US inflation report strengthened expectations of a more accommodative Federal Reserve, weighing on the US dollar and supporting commodity-linked currencies. However, the next moves in AUD/USD and USD/CAD will depend on upcoming economic data and the Bank of Canada’s policy guidance.
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GBP/USD vzrostl po slabší americké inflaci, která snížila sázky na další zvýšení sazeb Fedu. Měnový pár se pohyboval kolem 1,3411 USD, asi o 0,5 % výše za den.
The Pound to Dollar (GBP/USD) exchange rate rallied on Tuesday after softer-than-expected US inflation data prompted investors to scale back expectations for another Federal Reserve interest rate hike.
At the time of writing, GBP/USD was trading around $1.3411, up approximately 0.5% on the day.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.338178 (+0.24%)
Euro to Dollar (EUR/USD): 1.142849 (+0.40%)
Dollar to Yen (USD/JPY): 162.13999 (-0.17%)
DAILY RECAP:
A clear US Dollar (USD) selling bias emerged on Tuesday after the latest US consumer price index showed inflationary pressures eased by more than expected last month.
June's Consumer Price Index reported that headline inflation slowed from 4.2% to 3.5% year-on-year, comfortably below forecasts for a more modest easing to 3.8%. Core inflation also undershot expectations, with annual core CPI easing to 2.6%.
In response, financial markets trimmed some of their more hawkish policy expectations for the Federal Reserve, with the odds for a September interest rate hike falling from around 70% to 50%.
Meanwhile, the Pound (GBP) found support during Tuesday's session as investors doubled down on bets that the Bank of England (BoE) will have to raise borrowing costs again.
The hawkish shift in market sentiment stems from a fresh spike in global energy markets. With conflict flaring up once more in the Gulf, the vital Strait of Hormuz shipping lane has been blocked, raising fears of a renewed inflation shock that could force the BoE’s hand before 2026 draws to a close.
Even so, Sterling's rally was tempered by cautious commentary from the head of the BoE.
Appearing before the Treasury Select Committee, BoE Governor Andrew Bailey struck a sober tone. He pointed out that the geopolitical unrest in the Middle East poses a serious threat to financial stability, while simultaneously reminding lawmakers that Britain's sluggish economic growth remains a heavy drag on the domestic outlook.
Near-Term GBP/USD Forecast: US Producer Prices in Focus Looking ahead, the next catalyst of movement for the Pound to US Dollar (GBP/USD) exchange rate will be the publication of the latest US producer price index on Wednesday.
A cooling in factory gate prices could weigh on the ‘Greenback’ in midweek trade, as we could see a further trimming of Fed rate-hike bets if there are further signs that US inflationary pressures are easing.
Meanwhile, movement in the Pound looks set to remain limited on Wednesday amid a lull in UK data ahead of Thursday’s GDP release.
USD/CAD klesl na téměř měsíční minimum a míří k důležitému supportu kolem 1,3965. Loonie podporuje slabší USD, vyšší ceny ropy a očekávání jestřábějšího tónu BoC.
By the time the Bank of Canada announces its policy decision today, the Canadian Dollar has already built a powerful foundation for further gains. USD/CAD has fallen to its lowest level in nearly a month, supported not by a single catalyst but by three reinforcing forces: a broad retreat in the US Dollar after softer inflation data, higher oil prices that strengthen Canada’s export outlook, and growing expectations that the Bank of Canada may sound more hawkish than markets anticipated only a week ago.
The first two drivers have already reshaped the currency outlook. June’s weaker-than-expected US CPI prompted investors to scale back Federal Reserve tightening expectations, weighing on the Dollar across major currency pairs. At the same time, Brent crude has surged above $86 as renewed US-Iran hostilities threaten energy supplies through the Strait of Hormuz. For Canada, rising oil prices are more than just a global inflation story—they improve the country’s terms of trade and typically provide direct support for the Canadian Dollar, helping explain why the Loonie has outperformed most of its peers following the inflation data.
The Bank of Canada now has an opportunity either to reinforce or challenge that momentum. Economists overwhelmingly expect a sixth consecutive hold at 2.25%, making the decision itself unlikely to surprise. The more important question is whether Governor Tiff Macklem adjusts his message in response to oil’s renewed surge. His previous characterization of policy as balancing weaker growth against energy-driven inflation was formed before Brent’s latest rally, meaning the Monetary Policy Report may already understate current inflation risks. Markets will therefore pay closer attention to Macklem’s live assessment than to the published projections.
That leaves the accompanying statement and Macklem’s press conference as the key market events. Investors will focus on whether the Governor continues to describe policy as a balanced dilemma or acknowledges that the renewed energy shock has tilted inflation risks higher. Any discussion of the ongoing CUSMA trade review will also be closely watched, as it remains an important downside risk to Canada’s growth outlook. Even without signaling an imminent rate increase, a modestly more hawkish tone could encourage markets to further increase expectations of tightening in early 2027, where pricing is already becoming increasingly balanced.
Technically, USD/CAD is approaching an important inflection point. While the decline from 1.4247 has accelerated, it is still viewed as a correction within the broader uptrend from 1.3480. Strong support is expected between former resistance at 1.3965 and 38.2% retracement of 1.3480 to 1.4247 at 1.3954. Break of 1.4159 minor resistance will indicae that the correction has completed.
However, a decisive break below 1.3954/65 would suggest the advance from 1.3480 has completed as a three-wave corrective rebound after failing near 61.8% retracement of 1.4791 to 1.3480 at 1.4290. Such a development would shift the near-term technical outlook decisively in favour of further Canadian Dollar strength.
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USD/CNY slipped below 6.78 after the People's Bank of China set another stronger-than-expected daily fixing, reinforcing support for the Chinese yuan. Markets see the PBOC allowing gradual yuan appreciation while avoiding excessive volatility through its daily reference rate and liquidity operations. Traders are now watching whether USD/CNY can break below 6.75 or rebound toward the 6.80 resistance zone as US inflation and Federal Reserve expectations remain in focus. The USD/CNY exchange rate edged lower on Tuesday as the Chinese yuan strengthened after another closely watched currency fixing from the People’s Bank of China (PBOC). The move reinforced expectations that policymakers remain comfortable with a gradual appreciation of the renminbi while continuing to manage the pace of gains.
USD/CNY traded around 6.77 during the session, hovering near its lowest levels in several months as investors balanced China’s policy signals against expectations for US monetary policy.
Why Is USD/CNY Falling? The latest decline followed another stronger daily reference rate from the People’s Bank of China. The PBOC set the USD/CNY central parity rate at 6.7972, following Monday’s fixing of 6.7989, which marked the first official fixing below the 6.80 level since February 2023.
Although the latest fixing remained slightly weaker than market estimates, investors interpreted the move as another indication that Chinese authorities are becoming more comfortable with a firmer yuan after months of currency stability.
China allows the yuan to trade within a 2% band around the daily reference rate, making the fixing one of the most closely watched policy tools in global foreign exchange markets.
PBOC Continues to Support Liquidity Alongside the currency fixing, the central bank injected 224 billion yuan through seven-day reverse repurchase agreements while keeping the policy rate unchanged at 1.40%.
The liquidity injection helps maintain stable funding conditions across China’s banking system without signaling a broader shift in monetary policy.
The combination of steady liquidity support and a stronger currency fixing suggests policymakers are attempting to balance economic growth with currency stability as global financial markets remain volatile.
Chinese Yuan Strength Reflects Policy Confidence Recent policy actions suggest Beijing is allowing the yuan to strengthen gradually rather than aggressively defending a weaker exchange rate.
A stronger currency can help reduce imported inflation, improve investor confidence and support capital inflows into Chinese financial markets.
However, authorities also remain cautious about allowing excessive appreciation that could hurt exporters, particularly as global demand remains uneven.
That explains why the official fixing has strengthened only gradually instead of moving sharply below market expectations.
US Dollar Outlook Remains a Key Driver of USD/CNY The US dollar continues to influence the direction of USD/CNY. Investors are awaiting fresh US inflation data and additional comments from Federal Reserve officials for clues about the path of US interest rates.
If expectations for further Federal Reserve tightening increase, the dollar could recover and limit further yuan gains. Conversely, softer US economic data may place additional pressure on the greenback, allowing USD/CNY to continue moving lower.
USD/CNY Technical Outlook The broader trend suggests USD/CNY remains under moderate downside pressure after slipping below the important 6.80 psychological level. The Bloomberg chart shows the pair trading near 6.7705, down around 0.14% during the latest session, reflecting continued demand for the yuan.
Immediate support is located around 6.75, a level that has attracted buyers in recent sessions. A sustained move below this zone could expose the pair to fresh downside as yuan strength accelerates.
On the upside, 6.80 remains the first major resistance level. A recovery above that area could encourage a move toward 6.83, particularly if US dollar strength returns following upcoming inflation data or hawkish Federal Reserve commentary. For now, the technical picture points to range-bound trading, with policy signals from the PBOC and US macroeconomic data likely to determine the next directional move.
What Investors Are Watching Next Market participants will continue monitoring:
Upcoming US inflation data and Federal Reserve expectations. Future PBOC daily currency fixings for signs of further yuan support. Capital flows into Chinese financial markets. China’s economic data and policy announcements. Global risk sentiment and US-China trade developments. Any additional fixings below the 6.80 level could reinforce expectations that Chinese authorities are prepared to tolerate a stronger yuan, while stronger US economic data could slow the recent decline in USD/CNY.
Why is USD/CNY falling?
USD/CNY is declining because the Chinese yuan has strengthened after the People’s Bank of China set stronger daily reference rates, signaling support for gradual currency appreciation.
What is the PBOC fixing?
The PBOC fixing is the daily reference exchange rate set by China’s central bank. The yuan is allowed to trade within a 2% band around this official midpoint.
What are the key USD/CNY levels to watch?
Key support is around 6.75, while the first major resistance remains near 6.80, followed by 6.83.
Why does the PBOC manage the yuan?
The central bank uses the daily fixing to maintain currency stability, support economic growth, control inflation and prevent excessive volatility in foreign exchange markets.
EUR/USD po slabší americké CPI roste o více než 0,6 % v seanci a drží se nad 1,1400. Slabší inflace stlačila výnosy amerických dluhopisů i poptávku po dolaru. Meziroční CPI v USA vyšlo na 3,5 %.
As the trading week begins, the euro is once again showing a short-term bullish bias after the release of inflation data in the United States, which has helped ease strength around the U.S. dollar.
For now, EUR/USD is up more than 0.6% during the session and continues to trade above the 1.1400 level. This buying pressure is partly due to the fact that the new inflation data has triggered corrections in the U.S. bond market, a dynamic that does not favor the dollar.
If this behavior continues, relevant buying pressure could remain present in EUR/USD movements over the next few trading sessions.
U.S. CPI day arrives During the session, CPI data in the United States was released. Although an annual reading was expected, the official figure surprised to the downside and came in at 3.5%.
This figure marks an important change in the U.S. price dynamic, as it represents one of the most relevant declines of the year. In addition, June inflation moved away from the annual high of 4.2% and broke the upward trend that had been present in annual inflation levels since March.
With this result, inflation is once again moving somewhat closer to the central bank’s annual 2.00% target.
Source: TradingEconomics
This event is relevant for Federal Reserve expectations, as a consistent slowdown in inflation could prevent the view of a fully aggressive central bank from materializing over the coming months.
As inflation declines, the need to keep interest rates higher for a prolonged period also decreases. This perspective has started to be reflected in the 10-year U.S. bond market, where yields have shown some correction amid lower expectations of central bank aggressiveness.
After the upward trend seen last week, yields have started to move back below the 4.6% area, showing relevant weakness that had not been observed in recent sessions.
Source: TradingEconomics
The key point is that, as bond yields show weakness, the relative appeal of these fixed-income instruments compared to other markets may also decline. This could reduce the need to maintain consistent demand for dollars in order to access these types of assets.
This decline in bond yields coincides with weaker demand for U.S. dollars. This behavior is reflected in the DXY index, which measures the dollar’s strength against its main peers. The index is now showing a relevant decline and is approaching the 100-point reference area. This indicates that demand for dollars has started to weaken in the short term.
Source: TradingEconomics
With all of this in mind, the dynamic has been favorable for the euro. The release of the inflation data created renewed weakness in dollar demand, which could be allowing the euro to recover ground in the short term.
If the U.S. bond market fails to show attractive growth in yields, the dollar could continue to lose ground. In that scenario, EUR/USD could maintain relevant buying pressure over the next few trading sessions.
Technical outlook for EUR/USD
Source: StoneX, Tradingview
Recent recovery becomes relevant: Although a long bearish trend line has been present for months in average EUR/USD movements, the recent price recovery has started to weaken the long-term selling bias. This move could be opening room for a more neutral phase on the chart. Even though the bearish trend line has not yet been broken, price could start to stop forming new lows and enter a more consistent range. If this effect continues over the next few sessions and selling pressure fails to stabilize again, the continuation of the bearish trend line on the daily chart could start to come under pressure.
RSI: Now, the RSI has moved back toward the neutral 50 area. This suggests a balance between buying and selling impulses in the market. Rather than pointing to a clear directional move, the indicator highlights a possible phase of indecision that could remain relevant over the next few sessions.
MACD: A similar dynamic can be seen in the MACD, whose histogram remains very close to the neutral 0 level. This suggests balance in the average strength of short-term moving averages. This reading may also reflect relevant neutrality in short-term price movements.
Key levels:
1.15127 – Relevant resistance: This important high level coincides with a retracement area from previous weeks and also with the barrier formed by the 50-period moving average. Price movements attempting to break above this level could start to put the long bearish trend line at risk and open room for a more dominant buying bias over the coming weeks.
1.14253 – Near-term barrier: This level corresponds to the most relevant neutral area now. Price movements too close to this level could continue to highlight significant indecision and even open room for a possible short-term sideways range over the next few sessions.
1.12851 – Definitive support: This level is associated with a neutral area observed in May 2025 and now acts as the main support to watch. If price continues to move closer to this area, the selling bias would be reinforced and the possibility of an extension of the bearish trend line as the dominant chart structure over the coming weeks would increase.
Written by Julian Pineda, CFA, CMT – Market Analyst
In the latest bank forecasts, the Indian rupee could recover against the US dollar over the coming months as foreign bond inflows return and domestic liquidity conditions improve, according to HSBC. The bank recommends selling the USD/INR exchange rate, arguing that recent policy measures should encourage overseas investment into India while the Reserve Bank of India is likely to resist a renewed rise towards recent highs.
USD/INR was trading around 96.32 on Tuesday, having gained 1.75% during July and more than 7% since the beginning of the year.
The exchange rate recently reached a 2026 high around 97.12, placing the rupee close to levels that HSBC believes could trigger a more defensive response from policymakers.
Why Foreign Bond Inflows Could Support the Rupee HSBC says tax incentives for overseas bond investors included in the government's June foreign exchange package have already helped attract capital back into India.
Further inflows could follow if Bloomberg announces the inclusion of Indian debt in one of its bond indices.
Index inclusion would encourage international funds tracking the benchmark to increase their exposure to Indian government debt, generating additional demand for the rupee.
HSBC also notes that foreign investors have recently shifted from heavy equity selling to modest inflows, suggesting sentiment towards Indian assets may be stabilising.
How the FCNR Deposit Scheme Could Help Another potential source of support is the Foreign Currency Non-Resident deposit scheme.
HSBC says the initiative is beginning to gain traction as deposits are mobilised and exchanged with the Reserve Bank of India.
As more of these funds enter the domestic financial system, the resulting increase in rupee liquidity should have positive spillover effects for local sentiment, economic activity and Indian asset markets.
Combined with stronger foreign investment flows, this could help reverse some of the pressure that has driven USD/INR sharply higher during 2026.
Why the RBI May Defend the Rupee HSBC does not expect the Reserve Bank of India to sell substantial amounts of US dollars from its foreign exchange swap book.
Nevertheless, the bank believes officials are likely to remain defensive and prevent USD/INR from rising materially beyond current levels.
Allowing the pair to return towards 96-97 during the implementation of the government's currency package would raise questions over the effectiveness and cost of the measures.
This suggests the RBI may lean against further rupee weakness, particularly if USD/INR approaches its year-to-date high around 97.12.
What Could Push USD/INR Higher? HSBC acknowledges that the rupee still faces several risks.
India's dependence on imported energy means another rise in oil prices could increase demand for US dollars and widen the country's import bill.
Seasonal dividend outflows, renewed foreign selling of Indian equities and approaching non-deliverable forward maturities could also produce periods of rupee weakness.
The exchange rate has already risen from below 94.80 at the end of June to above 96.30, demonstrating that these risks remain significant.
What's the Forecast for the US Dollar versus the Indian Rupee? HSBC favours a lower USD/INR exchange rate and recommends selling the pair.
The bank expects returning foreign bond inflows, the FCNR deposit programme and resistance from the Reserve Bank of India to limit further gains in USD/INR.
While the pair may remain volatile around current levels, HSBC believes the balance of risks favours a stronger rupee rather than a sustained move beyond the recent 96-97 region.
USD/INR Forecast FAQIs HSBC bullish on the Indian rupee?
Yes. HSBC recommends selling USD/INR, which implies that it expects the rupee to strengthen against the US dollar.
What is the current USD/INR exchange rate?
USD/INR was trading around 96.32 on July 14. The pair was up approximately 1.75% for the month and 7.06% since the beginning of 2026.
Why does HSBC expect USD/INR to fall?
HSBC points to returning foreign bond investment, improving domestic liquidity and the likelihood that the Reserve Bank of India will resist a further rise in the exchange rate.
Could USD/INR rise above 97?
It remains possible if oil prices increase or foreign capital leaves Indian markets. However, HSBC expects the RBI to become increasingly defensive around the 96-97 region.
What are the main risks to the Indian rupee?
Higher oil prices, renewed equity outflows, seasonal dividend payments and non-deliverable forward maturities could all place fresh pressure on the Indian currency.
ING varuje, že EUR/USD zatím drží krátkodobý úrokový diferenciál, ale další růst cen energií by mohl pár stlačit k 1,10. Největší hrozbou je podle banky prudký růst cen plynu a slabší vyhlídky na další zvyšování sazeb ECB.
ING’s Francesco Pesole argues that the EUR/USD short-term rate differential is currently supporting the Euro as Gulf tensions rise, helped by a recovery in EUR front-end rates. However, he doubts this can last if Oil and Gas prices keep climbing, given limited scope for more ECB hikes and worsening eurozone terms of trade. ING warns that EUR/USD could risk a move toward 1.10 under higher energy prices.
Euro buoyed by rates for now"The EUR:USD short-term rate differential is – for now – helping to keep EUR/USD afloat in this Gulf re-escalation. The two-year swap rate gap has re-tightened around 15bp since the start of July, primarily because the rebound in oil prices happened at a time when ECB hike bets were dwindling, leaving more upside room to recover for EUR front-end rates."
"We aren’t convinced this rate gap can offer sustainable support to EUR/USD if energy prices continue to rise though."
"Markets may find it harder to price in more than two ECB hikes by year-end (now, 46bp) considering the less hawkish stance by ECB officials of late, and the medium-term negative implications of an energy crisis – combined with Fed tightening – for the EUR, tend to outweigh the positive of EUR hikes."
"The spike in gas prices is particularly concerning, as it weighs on the eurozone’s terms of trade more than oil."
"In a scenario where Brent returns to $90-100/bl and TTF around €55-60/MWh, a move to 1.10 becomes a tangible risk in EUR/USD."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The US Dollar (USD) is trading practically flat against the Swiss Franc (CHF) on Tuesday, consolidating gains after a 0.7% rally on Monday, boosted by rising geopolitical tensions and hawkish Comments by Federal Reserve (Fed) Governor Christopher Waller.
Waller said on Monday that the Fed would have to tighten its monetary policy in the near-term if inflation remains above the 2% target. Investors brought forward rate hike bets, following Waller's comments, and sent the US Dollar higher across the board.
The focus on Tuesday is on June’s US Consumer Price Index (CPI), which is highly likely to confirm Waller’s expectations with figures well beyond target. These data are likely to frame the first session of Fed Chairman Kevin Warsh’s testimony before Congress, which is due later on the day. The risk is skewed to the upside for the US Dollar.
Technical Anañysis: The next bullish target is the 0.8170 area
USD/CHF broke the year-to-date high at 0.8130, confirming that the corrective reaction of the last two weeks has been completed, with the impulsive candle on the daily chart suggesting that bulls have taken control. Momentum indicators support this view, with the 14-day Relative Strength Index (RSI) in positive territory without yet reaching extreme overbought levels, and the Moving Average Convergence Divergence (MACD) line attempting to cross the Signal line, which is a bullish sign.
Immediate resistance is at the mentioned high, at 0.8150, although the confluence of the July 2025 top and the 127.2% Fibonacci retracement of the late June-early July reversal, at 0.8170, seems a more plausible target. Further up, the 161.8% Fibonacci retracement of the mentioned cycle is at 0.8210.
A confirmation below the previous YTD high, in the 0.8130 area, is likely to find support at the 0.8070-0.8080 area, where the bottom of the ascending channel from early June lows meets Monday's lows. Below here, bullish momentum would fade, and the July 2 low, near 0.8010, would return to the focus.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price This week The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Swiss Franc.
USDEURGBPJPYCADAUDNZDCHFUSD0.04%0.23%0.36%-0.39%0.10%-0.55%0.69%EUR-0.04%0.18%0.33%-0.44%0.01%-0.60%0.65%GBP-0.23%-0.18%0.11%-0.61%-0.17%-0.77%0.51%JPY-0.36%-0.33%-0.11%-0.82%-0.26%-0.95%0.28%CAD0.39%0.44%0.61%0.82%0.57%-0.12%1.13%AUD-0.10%-0.01%0.17%0.26%-0.57%-0.61%0.54%NZD0.55%0.60%0.77%0.95%0.12%0.61%1.30%CHF-0.69%-0.65%-0.51%-0.28%-1.13%-0.54%-1.30% 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).
Komentáře hlavního ekonoma Paula Conwaye znovu zvýšily sázky na rychlejší zpřísnění RBNZ, protože trh nyní očekává OCR kolem 3,0 % do prosince. AUD/NZD tím míří k linii neckline důležitého double top.
Only a week after the Reserve Bank of New Zealand suggested lower oil prices would help ease inflation, one of its most senior policymakers is already questioning that assumption. Chief Economist Paul Conway’s latest remarks have given the New Zealand Dollar another boost, as investors conclude that the recent rebound in energy prices could require the RBNZ to tighten policy further than markets anticipated just days ago. That shift is now pushing AUD/NZD toward the neckline of an important double top, with the cross reflecting diverging monetary policy paths on either side of the Tasman.
Conway’s speech, “Finding Signal in the Inflation Noise“, acknowledged that falling oil prices had initially eased near-term inflation pressures. However, he argued the recent resurgence in Middle East tensions has delivered “another significant inflation shock” and warned that inflation may not slow as quickly as the RBNZ’s own forecasts suggest.
More importantly, he pointed to structural changes in New Zealand’s pricing behavior. New research from the central bank indicates businesses are passing higher costs through to consumers more readily than in the past while proving less willing to reverse those increases when costs decline. If that behavior alters inflation expectations, Conway said, “monetary policy may need to respond more firmly to re-anchor inflation expectations,” while cautioning that well-anchored expectations “cannot be taken for granted.”
Markets responded by bringing forward expectations for further tightening. Overnight index swaps now imply the Official Cash Rate rising from current 2.50% to around 3.0% by December, with another increase expected early next year. That marks a notable shift from the narrative surrounding last week’s policy decision, when lower fuel prices had encouraged expectations that the RBNZ could move only gradually after delivering its first rate hike in three years. The rebound in oil prices has quickly forced investors to reassess that outlook.
The implications are particularly clear in AUD/NZD. While the Reserve Bank of Australia has already delivered three rate hikes this year and is widely expected to adopt a slower, more measured pace, the RBNZ is viewed as having more ground to make up. That narrowing policy gap provides a strong fundamental backdrop for continued New Zealand Dollar outperformance.
The technical picture is beginning to reinforce that macro story. AUD/NZD has already shown signs that the five-wave rally from 1.0649 has run its course, with bearish divergence emerging on D MACD. Focus is now squarely on the 1.1970 neckline. A decisive break would confirm a double top at 1.2283 and 1.2256, opening the way toward 38.2% retracement of 1.0649 to 1.2283 at 1.1659.
ActionForex
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
GBP/CAD v pondělí klesl, protože růst cen ropy po obnoveném napětí mezi USA a Íránem podpořil kanadský dolar. Ropa na začátku seance vzrostla asi o 4 %.
The Pound to Canadian Dollar (GBP/CAD) exchange rate slipped on Monday as renewed conflict between the US and Iran lifted oil prices and supported the commodity-linked Canadian Dollar.
At the time of writing, GBP/CAD was trading at CA$1.8931, down around 0.2% on the day.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.891014 (-0.36%)
Euro to Canadian Dollar (EUR/CAD): 1.611545 (-0.28%)
Dollar to Canadian Dollar (USD/CAD): 1.41364 (-0.15%)
DAILY RECAP:
The crude-linked Canadian Dollar (CAD) firmed on Monday as escalating tensions in the Middle East triggered a rise in global oil prices.
After a lull in the fighting on Friday, hostilities between the US and Iran resumed on Sunday following an Iranian strike on a container ship in the Strait of Hormuz. The US responded by attacking Iranian targets, with Tehran further retaliating by targeting US allies in neighbouring Gulf states.
Markets are growing increasingly concerned that the conflict could intensify further, limiting shipping in the region. As a result, oil prices rose around 4% at the open on Monday. Although crude trimmed some of these gains as the session went on, CAD remained supported.
Meanwhile, the Pound (GBP) was mixed on Monday as a lack of UK economic data left the currency rudderless.
Sterling was able to avoid steep losses against the rising Canadian Dollar thanks to ongoing political optimism in the UK, with GBP investors remaining confident that the political uncertainty that has dogged the Pound over the past year was coming to an end.
Near-Term GBP/CAD Forecast: BoE Comments to Impact the Pound? Looking forward, Tuesday’s session starts with a speech from Bank of England (BoE) Governor Andrew Bailey.
Bailey has stuck to a cautious tone in recent weeks, arguing that the bank ought to wait and see how inflation plays out before considering adjusting policy. However, with global energy prices rising amid renewed US-Iran tensions, the Pound could tick higher if the BoE chief strikes a more hawkish chord.
Meanwhile, oil price dynamics are likely to drive the ‘Loonie’. CAD could remain supported if crude continues to climb amid escalating tensions in the Middle East.
NZD/USD vystoupal na téměř čtyřtýdenní maximum po jestřábích komentářích z RBNZ, které zvýšily sázky na další růst sazeb. Trh sleduje průraz nad 0,5810–0,5820.
The NZD/USD pair catches aggressive bids during the Asian session on Tuesday and jumps to a nearly four-week top in the last hour amid a combination of supporting factors.
The New Zealand Dollar (NZD) strengthens as hawkish comments from Reserve Bank of New Zealand (RBNZ) Chief Economist Paul Conway raised the prospect of further interest rate hikes. The US Dollar (USD), on the other hand, pauses a two-day rally as bulls opt to wait for the release of the latest US consumer inflation figures and US Federal Reserve (Fed) Chair Kevin Warsh's testimony. This, in turn, provides a goodish lift to the NZD/USD pair and backs the case for additional gains.
From a technical perspective, spot prices now seem to have found acceptance above the 38.2% Fibonacci retracement level of the May-June downfall. Moreover, the Moving Average Convergence Divergence (MACD) indicator has turned positive with the line advancing above zero, while the Relative Strength Index (RSI) hovers around 57, hinting at improving momentum. That said, it will still be prudent to wait for a move beyond the 0.5810-0.5820 confluence before placing fresh bullish bets.
The said area comprises the 50% retracement level and the 200-day Simple Moving Average (SMA), above which the NZD/USD pair could aim to test the 61.8% Fibo. level at 0.5853. The latter reinforces a broader cap ahead of 0.5914 and 0.5992. On the flip side, immediate support is seen at the 38.2% retracement at 0.5767, ahead of the 23.6% level at 0.5714, while a deeper pullback would expose the recent swing low area near the 0.5628 region.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
NZD/USD daily chart
New Zealand Dollar Price Today The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the US Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.09%-0.10%-0.10%-0.18%-0.19%-0.64%-0.12%EUR0.09%-0.01%0.00%-0.09%-0.11%-0.54%-0.03%GBP0.10%0.01%0.02%-0.06%-0.08%-0.53%-0.02%JPY0.10%0.00%-0.02%-0.08%-0.12%-0.56%-0.05%CAD0.18%0.09%0.06%0.08%-0.03%-0.46%0.05%AUD0.19%0.11%0.08%0.12%0.03%-0.43%0.09%NZD0.64%0.54%0.53%0.56%0.46%0.43%0.51%CHF0.12%0.03%0.02%0.05%-0.05%-0.09%-0.51% 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).
Japonský jen posílil, protože obchodníci uzavírají rekordní short pozice před americkou inflací CPI. USD/JPY testuje rezistenci pod 163, zatímco riziko intervence zůstává.
Japanese yen volatility has returned as traders unwind record short positions ahead of US CPI. With USD/JPY testing major resistance below 163 and intervention risks lingering, futures positioning suggests gains may become harder to come by. Here are the key USD/JPY and AUD/JPY trade setups to watch.
View related analysis:
Yen Bears Capitulate, US Dollar Nearing Sentiment Extreme? | COT report Australian Dollar Outlook: AUD/USD Bounce Losing Steam Ahead of US CPI Gold Price Outlook: Bulls Weigh the Odds of Another Bounce Above $4,000 How to Read the COT Report to Track Forex Market Sentiment Japanese Yen Short Covering Puts USD/JPY at a Critical Juncture Japanese Yen Volatility Returns Ahead of US CPI Volatility has perked up for the Japanese yen over the past few weeks, and it has cut both ways. A market-led selloff heading into the 2 July non-farm payrolls (NFP) report saw USD/JPY fall by as much as 200 pips before recouping those losses over the following four days. On Friday, USD/JPY fell more than 100 pips on reports that Japan's largest pension fund had been instructed to purchase domestic assets.
This is quite a significant development because it suggests Japan is exploring alternative ways of supporting the yen besides traditional currency intervention. It could prove a shrewd approach, allowing policymakers to avoid swimming against the tide while the Federal Reserve maintains a hawkish stance and US economic data continues to outperform.
Source: ICE, TradingView
Yen Gains May Be Harder to Come By I think the bigger takeaway is that easy gains on USD/JPY may be harder to come by, but that is not the same as saying the pair cannot move higher. The combination of traders remaining wary of potential intervention, alongside efforts to support the yen without directly intervening, could allow USD/JPY to grind higher while keeping volatility elevated. Put another way, the broader uptrend may remain intact, but traders should expect more frequent bouts of two-way price action.
With USD/JPY testing resistance ahead of today's US inflation report, traders are on high alert for either a bullish breakout or a sharp reversal. Markets continue to price in a hawkish Fed, so it may not take much of a downside CPI surprise to shake the market from these elevated levels, particularly as Japanese yen bears continue to capitulate in the futures market.
Japanese Yen Futures Positioning: USD/JPY COT Report I have been warning for several weeks about the potential sentiment extreme in Japanese yen futures. Gross short positions had climbed to record highs among both asset managers and large speculators, while long positions also edged higher despite the yen's persistent downtrend (USD/JPY uptrend). That pushed net-short exposure close to two-year highs for both groups of traders.
However, the latest Commitment of Traders (COT) report showed a clear reduction in bearish positioning last week. Gross short exposure was cut by a combined 48.8k contracts across both trader groups, falling 11.6% among large speculators and 12.7% among asset managers. Long positions increased only marginally, making this a story of short covering rather than fresh bullish conviction.
The conditions are not yet in place for a sustained yen rally, but if bearish traders continue heading for the exit, gains on USD/JPY may become harder to come by than they have been over recent months.
Source: CFTC (COT), CME, LSEG
USD/JPY Technical Analysis: US Dollar vs Japanese Yen The 1-hour chart shows a decent uptrend from Monday's low. Prices are testing the weekly R1 pivot point while remaining above their daily, weekly and monthly VWAPs. We could see an early breakout attempt during today's session towards the cycle highs, although traders should note the July VPOC at 162.69, which aligns with last week's high and could provide resistance.
Bulls may also want to tread carefully around the cycle highs and take note of the pre-NFP price action, as it could trigger another pre-emptive pullback. Even so, several support levels are clustered around 162, including the 2024 high, the weekly pivot point and Monday's VPOC.
It could then come down to the US inflation report to determine whether we see a meaningful breakout or a deeper pullback. While a hot CPI report could tempt bulls to push above 163, I suspect the bigger move may come from a softer-than-expected print. That could see USD/JPY rotate lower within its recent choppy range between 160 and 162.50.
Ultimately, I suspect CPI will need to surprise decisively to the upside for any breakout above 163 to prove sustainable.
Source: ICE, TradingView
This content was created by an affiliate of FOREX.com and represents the views and opinions of the author/speakers, not the views and opinions of FOREX.com, StoneX Group Inc., or its subsidiaries. The content has not been independently reviewed by FOREX.com
AUD/JPY Technical Analysis: Australian Dollar vs Japanese Yen Compared with USD/JPY, volatility remains lower on AUD/JPY. Yet it has caught my attention because it presents several clusters of support and resistance that could provide attractive trading setups. It also partially removes some of the event risk associated with the US inflation report.
The daily chart shows prices oscillating between the 50-day and 100-day EMAs. Momentum has turned slightly lower from last week's high and monthly pivot point, while Monday's shooting star signals a failed attempt to retest Friday's doji high.
Even if prices spike above last week's high, the June VPOC sits at 113.09 and could provide resistance, followed by the May VPOC at 113.48. While 112 may offer initial support, a break below that level brings the 100-day EMA into focus, near the Ministry of Finance (MOF) intervention low.
Růst cen ropy a plynu po eskalaci na Blízkém východě podporuje dolar a tlačí EUR/USD dolů. Pár může v nejbližších dnech a týdnech mířit k 1.1350 až 1.1300.
Energy prices are once again setting the tone for currency markets, with the renewed tensions in the Middle East reinforcing the dollar’s appeal while weighing on low-yielding and energy-importing currencies. As oil and natural gas prices climb, investors are becoming increasingly reluctant to price out further Fed tightening, providing the greenback with another tailwind. This is keeping the near-term EUR/USD forecast tilted to the downside.
Dollar remains bid as oil climbs on fresh escalation At the weekend, the US launched fresh strikes on dozens of Iranian military targets after Iran attacked commercial shipping in the Strait of Hormuz. Targets reportedly included air-defense systems, radar installations, missile and drone capabilities, and naval assets. In retaliation, Iran said it targeted US military bases in Jordan, Bahrain, and Kuwait, as well as radar systems in Oman.
The latest exchanges mark a significant intensification of tensions between Washington and Tehran. Last week, US President Donald Trump declared that the US-Iran ceasefire was “over” and sharply criticized Iran’s leadership. What it means for the markets is that the re-escalation has disrupted maritime traffic through the Strait of Hormuz. No commercial vessels have transited the waterway since Sunday evening, according to reports tracking shipping data. In turn, oil prices have surged higher again.
With crude oil rising once again, the obvious question is: what does this mean for the US dollar?
Given that the Fed’s new chairman has made it clear that he wants to keep inflation under control, another spike in oil prices is likely to reinforce expectations that US interest rates will stay higher for longer. Even if some of the near-term economic data softens, persistently high energy prices would make it difficult for the Fed to adopt a more dovish stance.
That is one of the reasons why we’re seeing the US dollar regain momentum, particularly against currencies whose economies are heavily reliant on imported energy, such as the euro and the Japanese yen.
Should Iran succeed in disrupting shipping through the Strait of Hormuz for al lengthy period of time once again, the US is likely to be viewed as relatively insulated thanks to its energy independence. At the same time, higher oil prices would add to inflationary pressures, making it harder for the Fed not to signal intentions of policy tightening.
US CPI and Warsh testimony in focus The focus now turns to a busy week for US economic data and Federal Reserve officials. Tuesday’s inflation report will be closely watched, with headline CPI expected to ease 0.1% on a monthly basis, lowering the year-over-year rate to 3.8% from 4.2%. However, firmer energy prices and sticky core inflation, still hovering around 2.9% year-on-year, suggest it remains premature to rule out at least one rate increase before the end of the year.
Markets will also hear from Fed Chair Kevin Warsh as he begins two days of testimony before Congress. Investors will be looking for any clues on the policy outlook. With energy prices firming and little evidence that the US economy is slowing enough to offset inflation risks, Warsh is unlikely to sound dovish at all. So, the fundamental backdrop continues to favour the dollar.
That leaves low-yielding, energy-dependent currencies such as the euro and the yen particularly vulnerable, meaning that the EUR/USD forecast is tilted to the downside. Of particular concern for Europe is the renewed strength in natural gas prices, especially with inventories still relatively low and demand rising (for air cooling systems) amid elevated summer temperatures.
Technical EUR/USD forecast and key levels to watch That combination leaves the euro exposed. In the near term, the EUR/USD could drift back towards the 1.1350 region, with a follow-up move into the 1.1300 area looking increasingly plausible over the coming days and weeks.
Source: TradingView.com There is also a bearish flag pattern to consider, too. If there EUR/USD breaks below the support trend of the pattern, which is what I expect, then at the very least I’d anticipate a retest of the recent lows around 1.1324.
Below that the 1.1300 area would come into focus. This level also lines up with the 127.2% Fibonacci extension of the major advance we saw between March and April. Given what’s happening in the oil market, together with the prospect of a more hawkish Fed, the path of least resistance for EUR/USD still appears to be to the downside.
Resistance is seen around 1.1450, followed by the 1.1480-1.1500 region.
Meanwhile, the European data calendar is relatively quiet this week, meaning short-term moves in the euro are likely to be driven more by developments in energy markets and shifts in US rate expectations than by domestic fundamentals.
