Tag: Macroeconomics

  • Australian Dollar falls due to risk-off sentiment amid escalating Israel-Iran tensions

    Australian Dollar falls due to risk-off sentiment amid escalating Israel-Iran tensions


    • The Australian Dollar declines due to dampened risk sentiment amid rising tensions in the Middle East.
    • Israeli military officials said that Israel attacked dozens of nuclear sites across Iran.
    • The US Producer Price Index rose 0.1% MoM in May, against the expectation of a 0.2% rise.

    The Australian Dollar (AUD) declines against the US Dollar (USD) on Friday, with over 1% losses. The AUD/USD pair depreciates due to escalating tensions in the Middle East.

    Israeli Minister of Defense Israel Katz warned his country to face a missile and drone attack following Israel’s preemptive attack on Iran. Katz declared a special state of emergency in the country, per Axios. Israeli military officials said that Israel attacked dozens of sites across Iran, as the Iranian nuclear program is an existential threat to Israel.

    Reuters reported that US President Donald Trump expanded steel tariffs starting June 23 on imported “steel derivative products,” including household appliances, such as dishwashers, washing machines, refrigerators, etc. The tariffs were initially imposed at 25% in March and later doubled to 50% for most countries. This is the second time the scope of affected products has been expanded.

    Australian Dollar depreciates as US Dollar advances due to improved safe-haven demand

    • The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is recovering losses and trading higher at around 98.10 at the time of writing. The US Michigan Consumer Sentiment will be eyed later on Friday.
    • The US Producer Price Index (PPI) climbed 0.1% month-over-month in May, compared to a decline of 0.2% (revised from -0.5%). This reading came in softer than the expected 0.2% rise. Meanwhile, the core PPI, excluding food and energy, increased 0.1% MoM in May versus -0.2% prior (revised from -0.4%), below the consensus of 0.3%.
    • President Trump posted on Truth Social on Wednesday that the trade deal with China is done and added that it is subject to his and Chinese President Xi Jinping’s final approval. “We are getting a total of 55% tariffs, China is getting 10%. Relationship is excellent! Thank you for your attention to this matter.”
    • China will grant only six-month rare-earth export licenses for US automakers and manufacturers, which suggests that China wants to have control over critical minerals as leverage in future talks, per the Wall Street Journal (gated).
    • The US Consumer Price Index (CPI) rose 2.4% YoY in May, slightly above 2.3% prior but below the market expectations of a 2.5% increase. The core CPI, which excludes volatile food and energy prices, climbed 2.8% YoY in May, compared to the consensus of 2.9%.
    • On Wednesday, President Trump stated that he would like to extend the trade talks deadline, but doesn’t think it will be necessary. Trump further stated that he will set unilateral tariff rates within two weeks.
    • The US Court of Appeals for the Federal Circuit extended an earlier, temporary respite on Tuesday for the government as it presses a challenge to a lower court ruling last month that blocked the tariffs. The federal appeals court has ruled that President Trump’s broad tariffs can remain in effect while legal appeals continue, per Bloomberg.
    • China’s Trade Balance (CNY) arrived at CNY743.56 billion in May, expanding from the previous surplus of CNY689.99 billion. Meanwhile, Exports rose 6.3% YoY against 9.3% in April. The country’s imports fell 2.1% YoY in the same period, from a 0.8% rise recorded previously.
    • Australia’s Trade Balance posted a 5,413M surplus month-over-month in April, below the 6,100M expected and 6,892M (revised from 6,900M) in the previous reading. Exports declined by 2.4% MoM in April, against a 7.2% rise prior (revised from 7.6%). Meanwhile, Imports rose by 1.1%, compared to a decline of 2.4% (revised from -2.2%) seen in March. China’s Caixin Services PMI rose to 51.1 in May as expected, from 50.7 in April.

    Australian Dollar falls toward 0.6450 near 50-day EMA

    AUD/USD pair trading around 0.6460 on Friday. The daily chart’s technical analysis indicates a weakening of the bullish bias as the pair has breached below the lower boundary of the ascending channel. Additionally, the pair moving below the nine-day Exponential Moving Average (EMA) suggests that short-term price momentum is weakening. However, the 14-day Relative Strength Index (RSI) is still positioned slightly above the 50 mark, indicating a bullish bias is in play.

    On the downside, the AUD/USD pair may further test the 50-day EMA at 0.6423. A break below this level may weaken the medium-term price momentum and put downward pressure on the pair to navigate the region around 0.5914, the lowest since March 2020.

    The immediate barrier appears at the nine-day EMA of 0.6495, followed by the seven-month high of 0.6538, which was reached on June 5. Further advances could prompt the pair to explore the region around the eight-month high at 0.6687, followed by the upper boundary of the ascending channel around 0.6730.

    AUD/USD: Daily 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 weakest against the Swiss Franc.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD 0.45% 0.45% 0.17% 0.22% 0.76% 0.77% -0.15%
    EUR -0.45% 0.04% -0.23% -0.16% 0.40% 0.29% -0.59%
    GBP -0.45% -0.04% -0.33% -0.28% 0.27% 0.23% -0.62%
    JPY -0.17% 0.23% 0.33% 0.09% 0.61% 0.59% -0.30%
    CAD -0.22% 0.16% 0.28% -0.09% 0.52% 0.55% -0.34%
    AUD -0.76% -0.40% -0.27% -0.61% -0.52% -0.02% -0.89%
    NZD -0.77% -0.29% -0.23% -0.59% -0.55% 0.02% -0.86%
    CHF 0.15% 0.59% 0.62% 0.30% 0.34% 0.89% 0.86%

    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).

    Tariffs FAQs

    Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

    Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

    There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

    During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.



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  • USD/JPY falls toward 144.00 ahead of key US-Japan trade talks

    USD/JPY falls toward 144.00 ahead of key US-Japan trade talks


    • USD/JPY edges lower on broad-based US Dollar weakness.
    • Tariff threats reemerge ahead of upcoming talks between the United States and Japan.
    • The G7 meeting in Canada on Sunday sets the stage for USD/JPY’s next big move.

    The Japanese Yen (JPY) and the US Dollar (USD) share a complex relationship, with the interests of the two global powerhouses intertwined in the USD/JPY pair.

    With USD/JPY currently trading at a critical juncture around the 144.00 psychological level, 0.65% down on Thursday, tensions between the two nations have come into focus.

    While USD/JPY is one of the most widely traded forex pairs, Thursday’s price action appears to be driven more by underlying geopolitical sentiment than by technical factors alone.

    As the largest foreign holder of US Treasuries, Japan has opposed US President Trump’s tariff policies, which include 50% duties on steel and aluminum imports and 25% tariffs on automobiles and auto parts. High tariffs on Japan’s key exports, including steel, aluminum, and car parts, are placing pressure on the Japanese economy, contributing to rising inflation. 

    With the two nations preparing for the Group of Seven (G7) meeting in Canada, talks are expected to take place in an effort to reach some form of trade agreement.

    With the two nations preparing for the Group of Seven (G7) meeting in Canada, talks are expected to take place in an effort to reach some form of trade agreement. 

    During a testimony before the House Ways on Wednesday, US Treasury Secretary Scott Bessent stated that “There are 18 important trading partners — we are working toward deals on those — and it is highly likely that those countries that are … negotiating in good faith, we will roll the date forward.” Japan has been mentioned as one of the countries with which the US is actively negotiating. 

    Although Trump continues to express the need for other countries to make a deal with the US, Japanese Prime Minister Shigeru Ishiba remains committed to ensuring that Japan gets a fair deal. Ryosei Akazawa, the chief trade negotiator for Ishiba, is anticipated to head to North America later this week for the sixth round of talks with his counterparts.

    On Thursday, Bloomberg reported comments made by Ishiba in Tokyo at a meeting where Japanese leaders gathered to discuss the situation with the US. 

    “If there’s progress before I meet the president, that’s in and of itself good,” he stated. 

    He followed up by stating, “What’s important is to achieve an agreement that’s beneficial to both Japan and the US. We won’t compromise Japan’s interests by prioritizing a quick deal.”

    For USD/JPY, the recent weakness in the pair can be attributed to a rise in USD outflows that have favoured alternative currencies. With trade talks in focus, these negotiations could contribute to the pair’s near-term move, especially if Japan uses its holdings in US Treasuries as a negotiating tool against the US.

    Tariffs FAQs

    Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

    Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

    There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

    During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.



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  • USD/CHF breaks below 0.8200 due to escalating Middle East tensions

    USD/CHF breaks below 0.8200 due to escalating Middle East tensions


    • USD/CHF depreciates as the safe-haven demand increases amid rising tensions between Israel and Iran.
    • CBS journalist reported that US officials have been told that Israel is fully prepared to launch an operation into Iran.
    • US Consumer Price Index climbed 2.4% YoY in May, coming in slightly below the expected 2.5% rise.

    USD/CHF extends its losses for the second successive day, trading around 0.8160 during the Asian hours on Thursday. The pair depreciates as the Swiss Franc (CHF) received support from the increased safe-haven demand amid escalating tensions between Israel and Iran.

    According to a Reuters report, the United States (US) decided to reduce its personnel in the Middle East. CBS News senior White House correspondent Jennifer Jacobs reported that US officials have been told that Israel is fully ready to launch an operation into Iran.

    US President Donald Trump said on Wednesday that the US would not permit Iran to have a nuclear weapon, per Reuters. The US and Iran are expected to meet on Sunday for nuclear talks. Axios reporter Barak Ravid reported that “White House envoy Steve Witkoff is going to meet Iranian foreign minister Abbas Araghchi in Muscat on Sunday and discuss the Iranian response to the recent US proposal, a US official tells me.”

    Additionally, the USD/CHF depreciates as the US Dollar (USD) struggles amid increasing odds of the Fed rate cut in September, boosted by cooler-than-expected US inflation in May. The US Consumer Price Index (CPI) rose 2.4% year-over-year in May, slightly above 2.3% prior but below the market expectations of a 2.5% increase. The core CPI, which excludes volatile food and energy prices, climbed 2.8% YoY in May, compared to the consensus of 2.9%.

    Swiss Franc FAQs

    The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.

    The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.

    The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.

    Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.

    As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.



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  • US, China officials agree on plan to ease trade tensions

    US, China officials agree on plan to ease trade tensions


    The United States (US) and China agreed to a preliminary deal on how to implement the consensus the two sides reached in Geneva, per Bloomberg.

    US negotiators said early Wednesday that they “absolutely expect” that issues around shipments of rare earth minerals and magnets will be resolved with the framework implementation, even though the full details of their deal weren’t immediately available.

    Market reaction

    At the time of press, the US Dollar Index was down 0.06% on the day at 99.0.

    US-China Trade War FAQs

    Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.

    An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.

    The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.



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  • AUD/USD rises above 0.6500 ahead of US CPI

    AUD/USD rises above 0.6500 ahead of US CPI


    • AUD/USD trades near 0.6520 at the time of writing, with US-China relations increasing demand for commodity-linked currencies.
    • Australia’s Westpac Consumer Confidence disappoints, but improving sentiment limits AUD losses.
    • The US Consumer Price Index (CPI) on Wednesday is expected to drive the Fed narrative and US Dollar demand.

    The Australian Dollar (AUD) is consolidating against the US Dollar on Tuesday, as AUD/USD trades above 0.6500 at the time of writing.

    Developments in US-China trade talks in London continued to support risk sentiment, boosting demand. Although the improved relations provided some support for the US Dollar, AUD/USD benefited from Australia’s close ties with China.

    With senior officials from both countries signaling progress, the talks have helped improve broader risk sentiment, offering the Aussie some support in the face of weaker domestic data. On Tuesday, Westpac Consumer Confidence index data for June dropped to 0.5%, down from 2.2% in May, signaling a notable decline in household sentiment. 

    However, since China is Australia’s largest trading partner, easing tensions between the US and China also helps support demand for commodities, a prominent driver of the AUD/USD price pair.

    US CPI and Fed expectations provide an additional headwind for the Greenback 

    Looking ahead, markets remain focused on the monetary policy divergence between the Federal Reserve(Fed) and the Reserve Bank of Australia (RBA). 

    On Wednesday, the United States will release the Consumer Price Index (CPI) for May, which is expected to inform expectations for the Fed.

    Headline inflation is projected to rise to 0.3% MoM in May, up from 0.2% in April, with the annual rate climbing to 2.5% from 2.3%. 

    Core CPI, which strips out food and energy prices, is also forecast to increase 0.3% MoM, compared to 0.2% previously, with the annual reading rising to 2.9% from 2.8%. 

    According to the CME FedWatch Tool, market participants expect the Fed to leave interest rates unchanged within the current 4.25% to 4.50% range at both the June and July meetings, with a 53.6% probability of a rate cut priced in for September.

    If inflation shows additional signs of easing, the Fed could adopt a more flexible approach to its monetary path, which could ease near-term rate expectations. Softer rate expectations could support the AUD, while rising inflation will likely solidify a pushback in Fed rate cut bets, providing support for the US Dollar.

    Australian Dollar FAQs

    One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

    The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

    China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

    Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

    The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.



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  • Gold prices head higher as USD gains remain limited

    Gold prices head higher as USD gains remain limited


    • Gold prices extend their gains, heading toward the $3,350 psychological level.
    • The United States and China continue trade talks in London, but USD appreciation is limited.
    • USD and Gold price action are expected to be influenced by US-China talks ahead of Wednesday’s US inflation data.

    Gold prices are trading firm against the US Dollar (USD) on Tuesday, with the precious metal trading near the $3,350 resistance level at the time of writing.

    Ongoing trade talks between the United States and China continue to influence global risk sentiment, helping to stabilize the US Dollar (USD). 

    As US Treasury Secretary Scott Bessent, US Trade Representative Jamieson Greer, and US Commerce Secretary Howard Lutnick continue discussions with China’s Vice Premier He Lifeng for the second day in London, markets remain focused on trade-related developments. 

    Ahead of Tuesday’s meeting, Commerce Secretary Lutnick told reporters that trade talks with China are progressing well and added that he expects the talks to continue throughout the day, according to Reuters.

    These negotiations are expected to continue influencing the direction of the Gold and US Dollar on Tuesday, as investors weigh the potential for eased tensions and improved economic cooperation between the world’s two largest economies.

    Gold daily digest: US-China trade talks in London remain the primary focus for markets

    • On Monday, Kevin Hassett, Director of the US National Economic Council (NEC), added to market optimism in an interview with CNBC, stating, “I expect this to be a short meeting with a firm handshake!”.
    • In a Wall Street Journal comment, Hassett noted that the US anticipates “any export control from the US will be eased and the rare earths will be released in volumes.” Once the more significant issues have been addressed, the US and China are expected to discuss less-urgent matters.
    • Additionally, positive remarks on Monday from US President Donald Trump, affirming that he is getting “good reports” from the meeting, are contributing to keeping market sentiment buoyed.
    • Data released by China’s General Administration of Customs (GAC) on Monday showed that China’s exports to the US decreased by 35% YoY in May. This was the steepest decline since February 2020, when trade was severely disrupted by pandemic-related shutdowns.
    • The expectation that China will release rare earths in volume signals potential relief for the US supply chain. These minerals are crucial for sectors such as technology, defense, and green energy, where they are essential for products like semiconductors, electric vehicles (EVs), and military hardware.
    • These developments are significant not only for geopolitical stability but also for global economic growth forecasts.
    • The next fundamental catalyst on the US economic calendar will be on Wednesday, with the release of US Consumer Price Index (CPI) data for May. Expectations are for headline US CPI to rise by 0.2% on a monthly basis. Inflation is expected to increase to 2.5% YoY, from 2.3% in April.
    • The core CPI, which excludes food and energy prices, is expected to show a 0.3% MoM increase in May compared to 0.2% in April. The YoY figure is also estimated to reflect a 0.1% increase, rising to 2.9% compared to 2.8% in April.
    • The inflation data is an important contributor to interest rate expectations, which drive the direction of the USD and the Gold price. Friday’s Nonfarm Payroll report (NFP), which showed the US economy added more jobs than anticipated in May (139,000 vs. an estimated 130,000), helped ease USD weakness, placing less pressure on the Federal Reserve (Fed) to cut interest rates in the near term. 
    • With stronger employment data increasing the likelihood that the Fed will cut interest rates by 25 basis points in September, the prospect of higher-for-longer interest rates weighs on the non-yielding Gold price, which is inversely correlated with the Greenback.
    • According to the CME FedWatch Tool, market participants expect the Fed to leave interest rates unchanged within the current 4.25% to 4.50% range at the June and July meeting, with a 54.7% probability of a rate cut priced in for September.

    Gold technical analysis: XAU/USD heads toward $3,350

    Gold prices are moving toward the $3,350 level on Tuesday, which is providing immediate resistance for the short-term move. A break above this barrier could open the door for a move toward Friday’s high near $3,375. Further up, the $3,392 resistance level limited the bullish potential last week, followed by the $3,400 psychological level. If buyers clear this zone and bullish momentum gains traction, a move toward the April all-time high at $3,500 may be possible.

    However, the Relative Strength Index (RSI) indicator flattens near the neutral zone of 50 in the daily chart, signalling a lack of momentum and indecision among traders.

    In the event of a downside move, the immediate support for the Gold price is at the 20-day Simple Moving Average (SMA) at $3,303, just above the next psychological support zone of $3,300, and ahead of the 23.6% Fibonacci retracement level of the January-April rise at $3,291.

    The 50-day SMA could then provide an additional layer of support around $3,270, while the tip of a symmetrical triangle chart pattern could provide another important barrier for downside price action at $3,240.

    Gold (XAU/USD) daily chart

    US Dollar PRICE Today

    The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the British Pound.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD -0.14% 0.20% -0.01% -0.10% -0.17% -0.12% -0.07%
    EUR 0.14% 0.36% 0.12% 0.07% 0.00% 0.03% 0.10%
    GBP -0.20% -0.36% -0.31% -0.28% -0.35% -0.33% -0.25%
    JPY 0.01% -0.12% 0.31% -0.06% -0.19% -0.19% -0.14%
    CAD 0.10% -0.07% 0.28% 0.06% -0.09% -0.05% 0.03%
    AUD 0.17% -0.01% 0.35% 0.19% 0.09% 0.04% 0.10%
    NZD 0.12% -0.03% 0.33% 0.19% 0.05% -0.04% 0.08%
    CHF 0.07% -0.10% 0.25% 0.14% -0.03% -0.10% -0.08%

    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).



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  • GBP/JPY remains weak near 195.50 after UK employment data

    GBP/JPY remains weak near 195.50 after UK employment data


    • GBP/JPY loses ground to around 195.65 in Tuesday’s early European session.
    • UK Unemployment Rate rose to 4.6% in three months to April; Claimant Count Change came in at 33.1K in May.
    • Hawkish BoJ expectations support the Japanese Yen and act as a headwind for the cross. 

    The GBP/JPY cross weakens to near 195.65 during the early European session on Tuesday. The Pound Sterling (GBP) remains weak against the Japanese Yen (JPY) after the UK employment data. Traders will keep an eye on the monthly UK Gross Domestic Product (GDP) data for April, which is due on Thursday. 

    Data released by the UK Office for National Statistics on Tuesday showed that the country’s ILO Unemployment Rate ticked higher to 4.6% in the three months to April versus 4.5% prior. This figure came in line with the expectations of 4.6% during the reported period. 

    Meanwhile, the Claimant Count Change increased by 33.1K in May versus -21.2K prior (revised from 5.2K), below the consensus of 9.5K. The GBP attracts some sellers in an immediate reaction to the weaker UK employment report.  

    Japan’s GDP shrank at an annual rate of 0.2% in Q1, compared to the initial estimate of a 0.7% fall, Japan’s Cabinet Office showed on Monday. An upward revision of Japan’s Q1 GDP has reaffirmed the Bank of Japan (BoJ) rate hike bets and could underpin the JPY.

    BoJ Governor Kazuo Ueda said on Tuesday that the central bank will raise interest rates if it has enough confidence that the underlying inflation is near or moves around 2%. The Japanese central bank is set to hold a two-day policy meeting next week.

    Employment FAQs

    Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.

    The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.

    The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.



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  • Japan’s Kato says will conduct fiscal policy appropriately

    Japan’s Kato says will conduct fiscal policy appropriately


    Japanese Finance Minister Katsunobu Kato said on Tuesday that he will appropriately conduct fiscal policy.

    Key quotes

    Seeking more Japanese Government Bond holdings by domestic investors.

    Will make efforts toward appropriate Japanese Government Bonds management.

    Crucial to seek Japanese Government Bond holdings by diverse groups.

    Says will appropriately conduct fiscal policy.

    Need to broaden investors in Japanese Government Bonds.

    Need to start promoting domestic ownership of JGBs.

    It’s important for the government to make efforts to ensure a variety of investors buy and own government bonds, at a time when the Bank of Japan tapers its bond purchases.

    Market reaction  

    At the time of writing, the USD/JPY pair is trading 0.01% lower on the day at 144.53. 

    Japanese Yen FAQs

    The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.

    One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.

    Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.

    The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.



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  • Gold prices await London talks between the US and China

    Gold prices await London talks between the US and China


    • Gold edges higher as persistent trade tensions and the safe-haven appeal of precious metals boost prices.
    • US-China trade talks are scheduled for Monday, remaining a key catalyst for Gold and US Dollar prices.
    • Gold prices rise above $3,300 with resistance at $3,350.

    Gold prices remained at an elevated level on Monday, despite the start of US-China trade talks in London. Alongside the United States’ (US) 50% tariffs on steel and aluminum imports, Gold has been supported by broader geopolitical tensions, such as the ongoing warfare between Ukraine and Russia over the weekend, which have reinforced Gold’s safe-haven status.

    Gold Daily Digest: Can US-China Talks Lift Safe-Haven Gold?

    • Friday’s Nonfarm Payrolls (NFP) report came in better than expected, which has eased fears of the Federal Reserve (Fed) cutting rates in the short term.
    • On Thursday, Reuters reported that the Canadian Prime Minister called US tariffs “illegal,” while Mexico and the European Union expressed similar frustration.
    • On Wednesday, Mexican President Claudia Sheinbaum called the new tariffs “unjust, unsustainable, and without legal grounds,” warning that if a deal is not reached, Mexico will be forced to respond with retaliatory measures.
    • Canada and the EU have also threatened to retaliate if no progress is made in trade talks this week.

    Gold prices remain under pressure on Monday, retreating from last week’s highs as technical indicators suggest waning bullish momentum. After failing to hold above the $3,339–$3,392 resistance zone, prices broke below short-term support near $3,320 and are now testing the 23.6% Fibonacci retracement level at $3,291. This level has become a key pivot in the near term, with a daily close below it likely to attract fresh selling pressure.

    The broader price action continues to consolidate within a symmetrical triangle, suggesting indecision among market participants. The lower boundary of this pattern is currently under threat, and a confirmed breakdown could expose the ascending trendline support around $3,250–$3,260. Below that, deeper losses could take prices toward the 50% Fibonacci retracement at $3,057, a level that aligns with previous structural support.

    On the upside, any rebound must clear the $3,339–$3,392 region to reassert bullish control. A break above this zone would pave the way toward the $3,500 mark, which remains the medium-term target for Gold bulls. However, with the 20-day Simple Moving Average (SMA) turning flat near $3,299, upside momentum has clearly stalled.

    Momentum indicators also reflect this indecision. The Relative Strength Index (RSI) is currently hovering around 52, indicating neutral sentiment with no immediate overbought or oversold conditions. This suggests that Gold may continue to consolidate unless triggered by a major fundamental catalyst, such as updates to US interest rates or further geopolitical developments.

    Gold’s technical structure has weakened slightly following the breakdown below short-term support on Friday. A decisive close below $3,291 would likely shift the outlook to bearish in the near term, while holding above the triangle base could still offer a path back toward resistance.

    Gold daily chart

    Gold FAQs

    Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

    Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

    Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

    The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.



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  • XAG/USD rises above .00 on economic uncertainty, industrial demand

    XAG/USD rises above $36.00 on economic uncertainty, industrial demand


    • Silver price gains momentum to near  $36.00 in Monday’s early early Monday
    • Investors look to broaden their exposure to safe-haven assets beyond gold, supporting the Silver price. 
    • The stronger US May employment report might lift the USD and cap the white metal’s upside. 

    The Silver (XAG/USD) price trades in positive territory around $36.00 during the Asian session on Monday. The white metal edges higher despite the stronger-than-expected US employment data for May.  Later on Monday, investors will closely watch the developments surrounding US-China trade talks.

    Geopolitical and economic uncertainty could provide some support to the Silver price as investors seek more holdings in safe-haven assets. US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer are set to speak with Chinese officials about trade talks. 

    Furthermore, industrial demand for applications such as solar panels contributes to the USD’s upside. The Silver Institute estimated the metal’s supply was 15% below demand in 2024 and is projected to see another deficit in 2025.

    On the other hand, the upbeat US May employment report gave the US Federal Reserve (Fed) a way to caution ahead of US-China trade talks, which are set to take place in London later in the day. This, in turn, might boost the Greenback and weigh on the USD-denominated commodities price. Federal Fund Futures pointed to a larger possibility that the Fed may keep its benchmark interest rate steady until the September monetary policy meetings. 

    Silver FAQs

    Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

    Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold’s. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

    Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

    Silver prices tend to follow Gold’s moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.



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  • Japan’s GDP arrives at 0% QoQ in Q1 2025 vs -0.2% expected

    Japan’s GDP arrives at 0% QoQ in Q1 2025 vs -0.2% expected


    The Japanese economy showed no growth over the quarter in the first quarter (Q1) of 2025, the final reading released by Japan’s Cabinet Office showed on Monday. This reading came in above the market expectation and the previous estimate of -0.2%.

    The Japan’s Gross Domestic Product (GDP) fell at an annual rate of 0.2% in Q1, compared to -0.7% in the previous reading.

    Market reaction to Japan’s GDP data

    At the press time, USD/JPY trades 0.13% lower on the day at 144.68.

    GDP FAQs

    A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022.
    Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.

    A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency.
    When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.

    When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.



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  • Australian Dollar falls due to risk-off sentiment amid escalating Israel-Iran tensions

    Australian Dollar falls, downside seems limited amid market caution ahead US NFP


    • The Australian Dollar may consolidate as traders adopt caution ahead of the US NFP release.
    • President Trump described the call as productive, and negotiations on tariffs are set to continue.
    • US Nonfarm Payrolls could have added 130,000 jobs in May, meanwhile, the Unemployment Rate is expected to hold steady at 4.2%.

    The Australian Dollar (AUD) declines against the US Dollar (USD) on Friday. The AUD/USD pair may remain stable amid market caution, as traders await the upcoming US Nonfarm Payrolls (NFP) report, due later in the day, seeking fresh insights into the United States (US) economy.

    Market sentiment improved following a productive phone call between US President Donald Trump and Chinese President Xi Jinping. Trump expressed that the call was productive and prepared to continue tariff negotiations. However, Trump and his team struggled to stay composed with Chinese trade officials. It is essential to note that any changes in the Chinese economy could impact the AUD, as China and Australia are close trade partners.

    Reserve Bank of Australia (RBA) Minutes of its May meeting suggested that the policymakers viewed the case for a 25 basis point cut as stronger, preferring a policy to be cautious and predictable. RBA Assistant Governor Sarah Hunter expressed caution on Tuesday that “higher US tariffs will put a drag on the global economy,” and warned that higher uncertainty could dampen investment, output, and employment in Australia.

    Australian Dollar struggles as US Dollar recovers losses ahead of NFP data

    • The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is trading higher at around 98.80 at the time of writing. The upcoming US Nonfarm Payrolls is expected to have added 130,000 jobs in May, below the 177,000 increase in April. The Unemployment Rate is also expected to hold steady at 4.2%.
    • Weekly Initial Jobless Claims rose to 247,000, above the expected 235,000, as data released by the US Department of Labor. Thursday’s US ADP private sector employment rose 37,000 in May, against a 60,000 increase (revised from 62,000) recorded in April, far below the market expectation of 115,000.
    • Institute for Supply Management’s (ISM) Services Purchasing Managers Index (PMI) declined to 49.9 in May, from 51.6 in April. This reading surprisingly came in weaker than the expected 52.0. Meanwhile,
    • US President Donald Trump called upon, in a post published on Truth Social on Wednesday, Federal Reserve (Fed) Chairman Jerome Powell to lower the policy rate. “ADP NUMBER OUT!!! “Too Late” Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES,” Trump said.
    • On Wednesday, Minneapolis Fed President Neel Kashkari noted that the labor market is showing some signs of slowing down. However, persistent uncertainty prevails over the economy, and the Fed must stay in wait-and-see mode to assess how the economy responds to the uncertainty.
    • House Republicans passed Trump’s “Big Beautiful Bill,” a multitrillion-dollar tax and spending package, which could increase the US fiscal deficit, along with the risk of bond yields staying higher for longer. This scenario raises concerns over the US economy and prompts traders to sell American assets under the “Sell America” trend. Policy experts anticipate Senate changes as GOP lawmakers aim to finalize the “big bill” by July 4.
    • The former biggest Donald Trump backer, Elon Musk, has been attacking Trump’s ‘big beautiful budget bill’ this week via social media. Musk has been openly mocking the Trump budget, which he had played a key role in creating. He criticized that the Trump budget codifies functionally none of the federal spending cuts that he swiftly executed at the start of Trump’s second term without Congressional oversight.
    • Last week, Trump accused China of breaching a truce on tariffs reached earlier this month. Washington and Beijing agreed to temporarily lower reciprocal tariffs in a meeting in Geneva. Trump said that China had “totally violated its agreement with us.” US Trade Representative Jamieson Greer also said that China had failed to remove non-tariff barriers as agreed. In response, a spokesperson from China’s Ministry of Commerce said on Monday that China had complied with the agreement by cancelling or suspending relevant tariff and non-tariff measures aimed at US “reciprocal tariffs.”
    • China’s Caixin Manufacturing Purchasing Managers’ Index (PMI) unexpectedly fell to 48.3 in May from 50.4 in April, falling short of the market expectations of a 50.6 expansion. However, the weekend data showed that the National Bureau of Statistics (NBS) Manufacturing PMI rose to 49.5 in May, from April’s 49.0 reading. Meanwhile, the Non-Manufacturing PMI declined to 50.3 from the previous 50.4 figure, falling short of the expected reading of 50.6. The Aussie Dollar could be impacted by Chinese economic data as both countries are close trading partners.
    • Australia’s Trade Balance posted a 5,413M surplus month-over-month in April, below the 6,100M expected and 6,892M (revised from 6,900M) in the previous reading. Exports declined by 2.4% MoM in April, against a 7.2% rise prior (revised from 7.6%). Meanwhile, Imports rose by 1.1%, compared to a decline of 2.4% (revised from -2.2%) seen in March. China’s Caixin Services PMI rose to 51.1 in May as expected, from 50.7 in April.
    • The Australian Bureau of Statistics (ABS) showed that Gross Domestic Product (GDP) grew by 0.2% quarter-over-quarter in Q1, declining from the previous 0.6% growth. Australia’s economy fell short of the expected 0.4% rise. Meanwhile, the annual GDP growth rate remained consistent at 1.3%, below the expected 1.5%.

    Australian Dollar stays above 0.6500, could target seven-month highs

    The AUD/USD pair is trading around 0.6510 on Friday. The daily chart’s technical analysis suggests the prevailing bullish bias as the pair remains within the ascending channel pattern. Additionally, the short-term price momentum remains stronger as the pair stays above the nine-day Exponential Moving Average (EMA). The 14-day Relative Strength Index (RSI) is also positioned above the 50 mark, suggesting a bullish outlook.

    On the upside, the AUD/USD pair may target a seven-month high of 0.6538, which was recorded on June 5. The pair can also explore the region around the upper boundary of the ascending channel around 0.6680, aligned with the eight-month high at 0.6687.

    The primary support appears at the nine-day EMA of 0.6478, aligned with the ascending channel’s lower boundary around 0.6470. Further decline could weaken the bullish bias and lead the AUD/USD pair to test the 50-day EMA at 0.6405.

    AUD/USD: Daily 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 weakest against the Canadian Dollar.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD 0.05% -0.00% 0.17% -0.08% 0.17% -0.04% 0.06%
    EUR -0.05% -0.04% 0.10% -0.12% 0.07% -0.08% 0.02%
    GBP 0.00% 0.04% 0.14% -0.07% 0.11% -0.03% 0.06%
    JPY -0.17% -0.10% -0.14% -0.18% 0.13% -0.07% -0.16%
    CAD 0.08% 0.12% 0.07% 0.18% 0.24% 0.05% 0.13%
    AUD -0.17% -0.07% -0.11% -0.13% -0.24% -0.14% -0.03%
    NZD 0.04% 0.08% 0.03% 0.07% -0.05% 0.14% 0.09%
    CHF -0.06% -0.02% -0.06% 0.16% -0.13% 0.03% -0.09%

    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).

    Risk sentiment FAQs

    In the world of financial jargon the two widely used terms “risk-on” and “risk off” refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.

    Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.

    The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.

    The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.



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  • US, China officials agree on plan to ease trade tensions

    Concluded a very good phone call with President Xi of China


    United States (US) President Donald Trump said on Truth Social on Thursday that he had a “very good phone call” with Chinese President Xi Jinping, during which they discussed the intricacies of the trade deal.

    “The call lasted approximately one and a half hours, and resulted in a very positive conclusion for both countries,” Trump added. “There should no longer be any questions respecting the complexity of rare earth products.”

    Trump also noted that his representatives, Secretary of the Treasury Scott Bessent, Secretary of Commerce Howard Lutnick and Trade Representative Jamieson Greer, will soon meet the Chinese team for the next round of talks at a yet-to-be determined date and location.

    Market reaction

    The US Dollar Index recovers from session lows following this headline and was last seen losing 0.2% on the day at 98.65. Meanwhile, the S&P 500 Index and the Nasdaq Composite cling to modest daily gains, rising 0.25% and 0.5%, respectively.

    US-China Trade War FAQs

    Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.

    An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.

    The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.



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  • NZD/USD extends upside above 0.6000 on weaker US data

    NZD/USD extends upside above 0.6000 on weaker US data


    • NZD/USD gains traction to around 0.6035 in Thursday’s early Asian session.
    • US ISM Services PMI unexpectedly contracted in May, the first time in nearly a year.
    • The RBNZ might slow the pace of rate cuts as uncertainty grows. 

    The NZD/USD pair extends the rally to around 0.6035 during the early Asian session on Thursday. The US Dollar (USD) softens against the New Zealand Dollar (NZD) due to the concern over mounting economic and political uncertainty in the US economy. Investors await the Chinese Caixin Services PMI, which is due later on Thursday. 

    The weaker-than-expected US economic data released on Wednesday exert some selling pressure on the Greenback and create a tailwind for the pair. Data released by the Institute for Supply Management (ISM) revealed that the US Services Purchasing Managers Index (PMI) declined to 49.9 versus 51.6 prior. This reading came in weaker than the market expectation of 52.0.

    Additionally, US ADP private sector employment rose 37,000 in May, compared to a 60,000 increase (revised from 62,000) recorded in April, missed the market expectation of 115,000 by a wide margin.

    The expectation that the Reserve Bank of New Zealand (RBNZ) will slow the pace of interest rate cuts as uncertainty grows could provide some support to the Kiwi. “While the RBNZ downgraded its economic forecasts compared to February and emphasized the high degree of uncertainty around global conditions, there was a surprising amount of caution around the timing and extent of further OCR cuts,” said Westpac senior economist Michael Gordon.

    Investors will closely monitor the developments surrounding the US and China trade talks. US Treasury Secretary Scott Bessent said on Sunday that Trump and Xi Jinping were expected to meet soon to resolve trade disputes, although on Monday there was an from China’s Commerce Ministry of US accusations that Beijing violated their trade agreement. Any sign of signs of renewed trade tensions could undermine the China-proxy Kiwi as China is a major trading partner of New Zealand. 

    New Zealand Dollar FAQs

    The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

    The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

    Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

    The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.



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  • Australian Dollar edges lower as US Dollar recovers recent losses

    Australian Dollar edges lower as US Dollar recovers recent losses


    • The Australian Dollar offered its daily gains as the Greenback edged higher.
    • Australia’s Gross Domestic Product expanded 0.2% QoQ in Q1, against the previous 0.6% growth.
    • The US Dollar faced challenges as tariff uncertainty may hurt growth in the US economy.

    The Australian Dollar (AUD) loses ground against the US Dollar (USD) on Wednesday after offering its daily gains. However, the AUD/USD pair remained in positive territory following the release of mixed economic data from Australia.

    Australian Bureau of Statistics (ABS) showed that Gross Domestic Product (GDP) grew by 0.2% quarter-over-quarter in Q1, declining from the previous 0.6% growth. Australia’s economy fell short of the expected 0.4% rise. Meanwhile, the annual GDP growth rate remained consistent at 1.3%, below the expected 1.5%.

    Moreover, the S&P Global Australia Composite Purchasing Managers’ Index (PMI) fell to 50.5 in May from April’s 51.0 reading, expanding for the eighth successive month. However, the pace indicates marginal growth in business activity, albeit the slowest so far in 2025.

    The S&P Global Australia Services PMI came at 50.6 in May, marking a 16th straight month of expansion but at the slowest pace in six months. The Ai Group Manufacturing PMI posted a -23.5 reading, improved slightly from the previous -26.5. Manufacturers experience delays in major projects and rising market hesitation due to global and domestic uncertainty.

    Reserve Bank of Australia (RBA) Assistant Governor Sarah Hunter expressed caution on Tuesday that “higher US tariffs will put a drag on the global economy.” Hunter noted that higher uncertainty could dampen investment, output, and employment in Australia. However, she also added that Australia’s exporters are relatively well-placed to weather the storm and assumes that Chinese authorities will support their economy through fiscal stimulus.

    Australian Dollar declines as US Dollar edges higher on technical correction

    • The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is trading lower at around 99.10 at the time of writing. The Greenback struggles as traders adopt caution amid rising tariff uncertainty and its potential to hurt growth in the US economy.
    • Job Openings and Labor Turnover Survey (JOLTS) showed the number of job openings on the last business day of April stood at 7.39 million, increasing from March’s 7.2 million openings. This figure surprisingly came in above the market expectation of 7.1 million.
    • Institute for Supply Management (ISM) Manufacturing Purchasing Managers’ Index eased to 48.5 in May from 48.7 in April. This figure came in weaker than the expectation of 49.5.
    • US President Donald Trump said at a rally in Pennsylvania on Friday that he planned to double import tariffs on steel and aluminum to build up pressure on global steel producers and intensify the trade war. “We are going to be imposing a 25% increase. We’re going to bring it from 25% to 50% – the tariffs on steel into the United States of America, which will even further secure the steel industry in the United States,” he said, per Reuters.
    • The US Court of Appeals for the Federal Circuit in Washington, on Thursday, temporarily put a hold on a federal court ruling and allowed President Trump’s tariffs to take effect. On Wednesday, a three-judge panel at the Court of International Trade in Manhattan halted Trump from imposing “Liberation Day” tariffs from taking effect. The federal court found that Trump exceeded his authority in imposing broad import tariffs and declared the executive orders issued on April 2 unlawful.
    • House Republicans passed Trump’s “Big Beautiful Bill,” a multitrillion-dollar tax and spending package, which could increase the US fiscal deficit, along with the risk of bond yields staying higher for longer. This scenario raises concerns over the US economy and prompts traders to sell American assets under the “Sell America” trend. Policy experts anticipate Senate changes as GOP lawmakers aim to finalize the “big bill” by July 4.
    • On Friday, Trump accused China of breaching a truce on tariffs reached earlier this month. Washington and Beijing agreed to temporarily lower reciprocal tariffs in a meeting in Geneva. Trump said that China had “totally violated its agreement with us.” US Trade Representative Jamieson Greer also said that China had failed to remove non-tariff barriers as agreed.
    • In response, a spokesperson from China’s Ministry of Commerce said on Monday that China had complied with the agreement by cancelling or suspending relevant tariff and non-tariff measures aimed at US “reciprocal tariffs.”
    • China’s Caixin Manufacturing Purchasing Managers’ Index (PMI) unexpectedly fell to 48.3 in May from 50.4 in April, falling short of the market expectations of a 50.6 expansion. However, the weekend data showed that the National Bureau of Statistics (NBS) Manufacturing PMI rose to 49.5 in May, from April’s 49.0 reading. Meanwhile, the Non-Manufacturing PMI declined to 50.3 from the previous 50.4 figure, falling short of the expected reading of 50.6. The Aussie Dollar could be impacted by Chinese economic data as both countries are close trading partners.
    • RBA Minutes of its May monetary policy meeting suggested that the board viewed the case for a 25 basis point cut as stronger, preferring a policy to be cautious and predictable. The policymakers highlighted that US trade policy posed a significant and adverse impact on the global outlook, but had not yet affected the Australian economy, however, they did not persuade that a 50 bps was needed.
    • The Reserve Bank of Australia (RBA) is expected to deliver more rate cuts in the upcoming policy meetings. The central bank acknowledged progress in curbing inflation and warned that US-China trade barriers pose downside risks to economic growth. Governor Michele Bullock stated that the RBA is prepared to take additional action if the economic outlook deteriorates sharply, raising the prospect of future rate cuts.

    Australian Dollar finds immediate support at nine-day EMA near 0.6450

    AUD/USD is trading around 0.6470 on Wednesday, indicating a prevailing bullish bias. The daily chart’s technical analysis suggests that the pair remains within the ascending channel pattern. The short-term price momentum remains stronger as the pair stays above the nine-day Exponential Moving Average (EMA). Additionally, the 14-day Relative Strength Index (RSI) is positioned above the 50 mark, indicating a persistent bullish outlook.

    On the upside, the AUD/USD pair could approach 0.6537, a seven-month high recorded on May 26. A break above this initial barrier could support the pair to explore the region around the upper boundary of the ascending channel around 0.6670.

    The immediate support appears at the nine-day EMA of 0.6456, aligned with the ascending channel’s lower boundary around 0.6450. A successful breach below this crucial support zone could dampen the bullish bias and lead the AUD/USD pair to test the 50-day EMA at 0.6395.

    AUD/USD: Daily 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 weakest against the US Dollar.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD 0.04% 0.05% 0.26% 0.02% 0.09% 0.02% 0.05%
    EUR -0.04% -0.01% 0.20% -0.03% 0.04% -0.03% 0.00%
    GBP -0.05% 0.01% 0.18% -0.02% 0.06% -0.02% 0.02%
    JPY -0.26% -0.20% -0.18% -0.21% -0.22% -0.18% -0.17%
    CAD -0.02% 0.03% 0.02% 0.21% 0.06% -0.01% 0.02%
    AUD -0.09% -0.04% -0.06% 0.22% -0.06% -0.08% -0.04%
    NZD -0.02% 0.03% 0.02% 0.18% 0.01% 0.08% 0.03%
    CHF -0.05% -0.01% -0.02% 0.17% -0.02% 0.04% -0.03%

    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).

    RBA FAQs

    The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.

    While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.

    Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.

    Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.

    Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.



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  • NZD/USD strengthens to near 0.6000, eyes on potential US-China talks

    NZD/USD strengthens to near 0.6000, eyes on potential US-China talks


    • NZD/USD gains ground to near 0.6000 in Wednesday’s early Asian session. 
    • US JOLTS Job Openings rose to 7.39 million in April, above the consensus. 
    • US President Trump and Chinese President Xi Jinping were likely to have a call soon. 

    The NZD/USD pair holds positive ground around 0.6000 during the early Asian session on Wednesday. The US Dollar (USD) weakens against the New Zealand Dollar (NZD) amid concerns over the impact of US President Donald Trump’s tariffs on the US economy and global trade.

    The Greenback edges lower as traders remain concerned over the ongoing tariff uncertainty and its potential to hurt growth in the US economy. The US manufacturing sector has continued a trend of contraction for three consecutive months, which contributes to the USD’s downside. 

    Separately, the number of job openings on the last business day of April stood at 7.39 million versus 7.2 million prior, the US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday. This figure came in above the market expectation of 7.1 million.

    US Treasury Secretary Scott Bessent said on Sunday that Trump and Xi Jinping were expected to meet soon to resolve trade disputes, although on Monday there was a response from China’s Commerce Ministry to US accusations that Beijing violated their trade agreement.  

    The US Nonfarm Payrolls (NFP) report for May will be closely monitored, which is expected to show 130K job additions. If the report showed a stronger-than-expected outcome, this might lift the USD and cap the upside for the pair. 

    New Zealand Dollar FAQs

    The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

    The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

    Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

    The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.



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  • BoJ likely to halt bond purchase cuts next year, ex-official says

    BoJ likely to halt bond purchase cuts next year, ex-official says


    Bank of Japan (BoJ) former board member Makoto Sakurai said on Tuesday that the Japanese central bank will probably halt its quarterly reductions in government bond purchases starting next fiscal year, per Bloomberg. 

    The BoJ has been trimming its bond-buying by ¥400 billion ($2.8 billion) every quarter since last summer, but recent pressure from rising yields has likely made further cuts too risky.

    Market reaction

    At the time of writing, the USD/JPY pair is trading 0.02% lower on the day to trade at 142.71.

    Bank of Japan FAQs

    The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.

    The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.

    The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.

    A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.



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