Tag: Majors

  • 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/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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  • EUR/USD extends gains on dovish US CPI, flirts with 1.15

    EUR/USD extends gains on dovish US CPI, flirts with 1.15


    • EUR/USD advances as lower US inflation sparks calls for aggressive Fed rate cuts.
    • Trump urges full percentage point cut in Fed funds rate post-CPI.
    • ECB policymakers cautious, but inflation outlook hints at further fine-tuning.

    The EUR/USD surged during the North American session but remains shy of clearing the 1.1500 figure, following the release of a softer-than-expected inflation report in the United States (US), which could prompt the Federal Reserve (Fed) to reduce borrowing costs in the near term. At the time of writing, the pair trades at 1.1482, up by over 0.50%.

    US data revealed that the Consumer Price Index (CPI) in May fell short of estimates as prices continued to trend lower. Following the data release, US President Donald Trump posted on his social network that the Fed should lower the fed funds rate by one whole percentage point.

    Although inflation edged lower, some analysts project that households in the upcoming month will feel the impact of tariffs. Meanwhile, positive trade news regarding negotiations between the US and China emerged, as the Wall Street Journal (WSJ) revealed that China is putting a six-month limit on rare-earth export licenses for US automakers and manufacturers.

    Meanwhile, in the Eurozone (EU), European Central Bank (ECB) policymakers made headlines, although they failed to move the EUR/USD pair. The ECB’s Vujcic said that he is looking for more clarity on trade, while Kazaks noted that it is “quite likely that 2% inflation will require some further cuts for fine-tuning,” said via Econostream on X.

    The ECB Chief Economist, Philip Lane, added that last week’s rate cut helped clarify the bank’s policy stance to bring inflation toward its target.

    Ahead in the week, the EUR/USD is expected to be greatly influenced by the release of the US Producer Price Index (PPI) numbers, along with the Initial Jobless Claims report. Across the pond, the EU’s schedule is scarce on economic data, but ECB officials led by Vice-President Luis de Guindos will cross the wires.

    Euro PRICE This week

    The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the US Dollar.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD -0.85% -0.19% -0.32% -0.19% -0.12% -0.23% -0.28%
    EUR 0.85% 0.65% 0.51% 0.65% 0.76% 0.62% 0.56%
    GBP 0.19% -0.65% -0.04% 0.00% 0.12% -0.03% -0.08%
    JPY 0.32% -0.51% 0.04% 0.12% 0.15% 0.03% -0.08%
    CAD 0.19% -0.65% -0.01% -0.12% 0.06% -0.04% -0.09%
    AUD 0.12% -0.76% -0.12% -0.15% -0.06% -0.14% -0.19%
    NZD 0.23% -0.62% 0.03% -0.03% 0.04% 0.14% -0.05%
    CHF 0.28% -0.56% 0.08% 0.08% 0.09% 0.19% 0.05%

    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).

    Daily digest market movers: EUR/USD soars past 1.1480 as traders shift toward US PPI data

    • EUR/USD appears poised to test the 1.1500 mark in the near term as positive news about US-China talks could increase appetite for riskier assets and weigh on the US Dollar.
    • US Treasury Secretary Scott Bessent commented that trade fairness with China could be achieved through reduced exports to the US or by rebalancing the world’s largest economies. He added that the Trump administration is committed to maintaining the US Dollar’s reserve currency status.
    • US inflation came in softer than expected in May. Headline CPI rose 2.4% YoY, slightly above April’s 2.3% but below the 2.5% forecast. Core CPI held steady at 2.8% YoY, suggesting underlying inflation remains stable but persistent.
    • The PPI for May is projected to increase from 2.4% to 2.6% YoY. Underlying PPI figures are expected to remain at 3.1% higher, unchanged compared to April’s print.
    • Financial market players do not expect that the ECB would reduce its Deposit Facility Rate by 25 basis points (bps) at the July monetary policy meeting.

    Euro technical outlook: EUR/USD bulls eyes 1.15 and the YTD high

    From a technical perspective, the uptrend is expected to continue as buyers target a clear break above the 1.1500 figure. This will expose the year-to-date (YTD) high of 1.1572, ahead of 1.1600. The Relative Strength Index (RSI) is bullish, indicating an upward direction, which suggests that buyers are gaining momentum.

    The less likely scenario on the downside is that the EUR/USD needs to clear the 1.1450 area. This would set the pair for a pullback toward the 20-day Simple Moving Average (SMA) at 1.1346 before testing 1.1300.

    ECB FAQs

    The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region.
    The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa.
    The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

    In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro.
    QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.

    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 European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.



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  • AUD/USD climbs to new highs north of 0.6500

    AUD/USD climbs to new highs north of 0.6500


    • AUD/USD adds to the weekly advance, surpassing the 0.6500 mark.
    • The US Dollar remains under pressure from economic data, US-China trade deal.
    • The US CPI fell below consensus, rising by 2.4% YoY in May.

    The upward trend in the Aussie Dollar (AUD) continues unabated this week, with AUD/USD advancing for the third consecutive day and reaching new yearly peaks near the 0.6550 level.

    AUD/USD propped up by USD selling, trade optimism

    The pair keeps its weekly recovery well in place on Wednesday in response to further pessimism hurting the Greenback, while auspicious news on the trade front also alleviated concerns over a protracted trade war.

    Indeed, the US Dollar accelerated its losses after US inflation figures showed the CPI rising less than initially estimated by 2.4% in the year to May. The core reading followed suit, coming in short of expectations and rising 2.8% from a year earlier.

    The weaker-than-expected US data has prompted investors to accelerate their bets of a probable rate cut by the Federal Reserve at its September gathering.

    Back to trade, US and China officials appear to have reached some common ground regarding rare earths at their gathering in London, although the agreement still needs confirmation from both President Trump and China’s Xi Jinping.

    Next on tap in Oz

    Given the lack of data releases in Australia on Wednesday, investors’ attention shifts to the Melbourne Institute’s release of Inflation Expectations on Thursday.

    What about techs?

    AUD/USD is trading in the low-0.6500s and is expected to face initial resistance at the YTD peak of 0.6545 (June 11), seconded by the November 2024 high of 0.6687 (November 7) and the 2024 top of 0.6942 (September 30), all preceding the key 0.7000 hurdle.

    On the other hand, the resumption of the bearish trend could spark an initial drop to the critical 200-day SMA at 0.6434, prior to the May trough of 0.6356 (May 12). The latter appears reinforced by the proximity of the provisional contention at the 55-day and 100-day SMAs at 0.6379 and 0.6342, respectively.

    The RSI near 59 suggests that further gains should remain in the pipeline in the short-term horizon, while the ADX past 26 is indicative of a modest strength of the trend.



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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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  • GBP/USD slips as strong US jobs data cools Fed rate cut bets

    GBP/USD slips as strong US jobs data cools Fed rate cut bets


    • Sterling still set for weekly gain over 0.80% amid broad Greenback weakness earlier in the week.
    • US economy added 139K jobs in May, beating forecasts and reinforcing Fed’s cautious stance on rate cuts.
    • Dollar strength resurfaces, with DXY climbing 0.58% to 99.28, its highest in two days.

    GBP/USD tumbled during the North American session, down over 0.30% after the latest jobs report in the United States (US) maintained the status quo, with the economy remaining strong. The pair traded at 1.3526 after hitting a daily high of 1.3586.

    Pound retreats below 1.3550 after NFP beats estimates, lifting the US Dollar and dampening dovish expectations

    US Nonfarm Payroll figures in May exceeded estimates of 130K, rising by 139K, which was below April’s downwardly revised 147K. Although the jobs market shows that it’s softening, beating economists’ estimates, it pushed aside traders’ bets that the US Federal Reserve (Fed) will cut interest rates in 2025.

    The data revealed that the Unemployment Rate remained unchanged at 4.2%, and that the Federal Government cut 10,000 jobs in the past month.

    A scarce economic docket in the UK, kept GBP/USD traders leaning onto US news. In addition, Sterling is poised to post gains of over 0.80% in the week, sponsored fy broad UA Dollar weakness.

    Despite this, the buck has recovered some ground, as depicted by the US Dollar Index (DXY). The DXY, which tracks the value of the American dollar against a basket of six currencies, climbed 0.58% to 99.28, its highest level in two days.

    Next week, the UK economic docket will feature jobs data and gross Domestic Product (GDP) figures for April. Across the pond, the US schedule will announce the latest Consumer Price Index (CPI), followed by the Producer Price Index (PPI) and the University of Michigan Consumer Sentiment.

    British Pound PRICE This week

    The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Japanese Yen.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD -0.32% -0.40% 0.75% -0.35% -0.75% -0.76% 0.08%
    EUR 0.32% -0.08% 1.07% -0.03% -0.43% -0.46% 0.39%
    GBP 0.40% 0.08% 1.22% 0.05% -0.35% -0.38% 0.46%
    JPY -0.75% -1.07% -1.22% -1.09% -1.49% -1.51% -0.76%
    CAD 0.35% 0.03% -0.05% 1.09% -0.40% -0.43% 0.42%
    AUD 0.75% 0.43% 0.35% 1.49% 0.40% 0.02% 0.90%
    NZD 0.76% 0.46% 0.38% 1.51% 0.43% -0.02% 0.85%
    CHF -0.08% -0.39% -0.46% 0.76% -0.42% -0.90% -0.85%

    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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

    GBP/USD Price Forecast: Technical outlook

    The trend remains up, as GBP/USD buyers tested the 20-day Simple Moving Average (SMA) at 1.3509. If this level holds, the pair’s direction would likely resume in the short term after making successive series of higher highs and higher lows, warranting further upside.

    However, momentum has taken a hit. The Relative Strength Index (RSI) is aiming lower, hints that sellers are moving in.

    If GBP/USD stays above 1.3500, this opens the door for a move to 1.3584 today’s high, followed by the year-to-date (YTD) high at 1.3616. On the other hand, a daily close below 1.35 could sponsor a drop towards April’s 28 sing high turned support at 1.3443 ahead of the 1.34 mark.

    Pound Sterling FAQs

    The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data.
    Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).

    The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates.
    When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money.
    When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.

    Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP.
    A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.

    Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
    If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.



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  • AUD/USD drifts below 0.6500 with the Dollar picking up ahead of the NFP report

    AUD/USD drifts below 0.6500 with the Dollar picking up ahead of the NFP report


    • FX traders are paring back their USD short positions ahead of the US NFP release.
    • US Nonfarm Payrolls are expected to show a 130,000 increase in May.
    • A weaker-than-expected reading might heighten hopes of Fed easing and send the USD lower.

    The Australian Dollar extends losses below 0.6500 on Friday as traders trim their US Dollar short positions ahead of the US Nonfarm Payrolls report. The pair’s broader trend remains positive, but the double top at 0.6530 hints at a strong resistance area.

    All eyes today are on the US Nonfarm payrolls report, which will be observed with particular interest, after a string of negative US releases earlier this week revived fears of a recession.

    Market forecasts anticipate a 130,000 increment on private employment in May, following a 177,000 rise in April, with the Unemployment Rate steady at the previous 4.2% level.

    Downbeat NFP figures might boost hopes of Fed easing

    Earlier this week, ADP Employment figures showed a much lower than expected reading, 37k against the 115K expected. Beyond that, Manufacturing activity contracted beyond forecasts and, unexpectedly, the Services sector showed a similar picture. After these figures, markets are wondering whether a 130K increase in Payrolls is not too optimistic a view.

    Another weak release today will increase concerns about the US economic momentum and might convince the Fed to abandon its neutral stance and lower interest rates further to avoid a deeper economic slowdown. This might add pressure on the USD.

    The Australian calendar has been light today, although the impact of a softer-than-expected Australian GDP and the RBA’s dovish minutes has been minimal, with US economic data and Trump’s ongoing tariff saga as the main market movers this week.

    Nonfarm Payrolls FAQs

    Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.

    The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation.
    A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work.
    The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.

    Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower.
    NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.

    Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa.
    Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold.
    Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.

    Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components.
    At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary.
    The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.



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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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  • 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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  • Slides below 0.82, reaches multi-week low as USD appreciates

    Slides below 0.82, reaches multi-week low as USD appreciates


    • USD/CHF drops to 0.8155 amid renewed ‘Sell America’ sentiment across global markets.
    • RSI confirms bearish momentum; next targets are YTD low at 0.8083 and psychological support at 0.8000.
    • Recovery needs a break above 0.8200, with resistance at 0.8300 and last week’s high at 0.8346.

    USD/CHF extended its losses during Monday’s North American session, down 0.60% as the Greenback weakened across the board. An earlier risk-off impulse, which surprisingly shifted positively, weighs on the US Dollar (USD), which did not capitalize on its status as the ‘sell America’ trade continues to gain steam in the financial markets. The pair trades below 0.8200 after hitting a six-week low of 0.8155.

    USD/CHF Price Forecast: Technical outlook

    Since hitting a weekly high of 0.8346, the USD/CHF pair has plummeted sharply due to overall weakness in the US Dollar. Momentum as measured by the Relative Strength Index (RSI) shows that sellers are gathering momentum. This means the major could retest the year-to-date (YTD) lows hit on April 21, a swing low of 0.8083. If that level is surpassed, the next stop would be the 0.8000 figure.

    Conversely, if USD/CHF drops below 0.8100, the next support would be the abovementioned YTD low of 0.8083sd and the 0.8000 figure.

    USD/CHF Price Chart – Daily

    Swiss Franc PRICE Today

    The table below shows the percentage change of Swiss Franc (CHF) against listed major currencies today. Swiss Franc was the strongest against the US Dollar.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD -0.85% -0.62% -0.81% -0.27% -0.97% -1.32% -0.78%
    EUR 0.85% 0.22% 0.05% 0.57% -0.12% -0.51% 0.06%
    GBP 0.62% -0.22% -0.15% 0.36% -0.34% -0.74% -0.16%
    JPY 0.81% -0.05% 0.15% 0.54% -0.17% -0.53% -0.07%
    CAD 0.27% -0.57% -0.36% -0.54% -0.70% -1.08% -0.51%
    AUD 0.97% 0.12% 0.34% 0.17% 0.70% -0.33% 0.28%
    NZD 1.32% 0.51% 0.74% 0.53% 1.08% 0.33% 0.57%
    CHF 0.78% -0.06% 0.16% 0.07% 0.51% -0.28% -0.57%

    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 Swiss Franc from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CHF (base)/USD (quote).



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  • EUR/USD falls toward 1.1300 as bond market optimism outweighs impact of US-EU tariff delay

    EUR/USD falls toward 1.1300 as bond market optimism outweighs impact of US-EU tariff delay


    • EUR/USD depreciates as the US Dollar strengthens, as US yields weaken due to Japan’s potential cuts in government debt issuance.
    • The Greenback gains ground ahead of the May 7 FOMC Meeting Minutes release on Wednesday.
    • Trump expressed his satisfaction as the EU is speeding up the process to reach a trade deal with the United States.

    EUR/USD continues its losses for the second successive day, trading around 1.1310 during the Asian hours on Wednesday. The pair depreciates as the US Dollar (USD) draws support and as US yields depreciate following Japan’s indication of potential cuts in government debt issuance, which has boosted global bond markets. At the time of writing, the 10- and 30-year yields on US Treasury bonds are standing at 4.46% and 4.97%, respectively.

    Additionally, the Greenback received support as the Conference Board’s Consumer Confidence Index rose to 98.0 in May from the previous 86.0 reading. Meanwhile, US Durable Goods Orders fell by 6.3% in April against a 7.6% increase prior. This figure came in better than the estimated decrease of 7.9%. Traders likely await the FOMC Minutes, which are due later on Wednesday.

    Federal Reserve Bank of New York President John Williams emphasized the importance of inflation expectations should be well anchored. Williams wants to avoid inflation becoming highly persistent because that could become permanent by responding relatively strongly when inflation begins to deviate from the target. On Tuesday, Minneapolis Fed President Neel Kashkari said that policymakers should avoid any adjustment in interest rates until reaching clear estimations of the impact on inflation due to higher tariffs.

    However, the risk-sensitive Euro (EUR) gained support as trade tension eased between the United States (US) and the European Union (EU). On Sunday, US President Donald Trump extended the tariff deadline on imports from the EU from June 1 to July 9. On Monday, the Brussels agreed to speed up trade talks with the United States to avoid a transatlantic trade war.

    On Tuesday, US President Donald Trump expressed his satisfaction in a post on Truth Social, noting that the EU is accelerating the process towards reaching a trade deal with the United States. Trump wrote, “I was extremely satisfied with the 50% Tariff allotment on the European Union, especially since they were ‘slow walking”. I have just been informed that the EU has called to quickly establish meeting dates. This is a positive event, and I hope that they will.

    Euro FAQs

    The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day.
    EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

    The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy.
    The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa.
    The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

    Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control.
    Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

    Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency.
    A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall.
    Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

    Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
    If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.



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  • NZD/USD holds positive ground near 0.5900 as New Zealand Retail Sales beat expectations

    NZD/USD holds positive ground near 0.5900 as New Zealand Retail Sales beat expectations


    • NZD/USD edges higher to around 0.5900 in Friday’s early Asian session.
    • New Zealand Retail Sales beat expectations in Q1. 
    • A stronger US S&P Global PMI might cap the pair’s upside. 

    The NZD/USD pair posts modest gains near 0.5900 during the early Asian session onn Thursday. The upbeat New Zealand Retail Sales data provide some support to the Kiwi against the US Dollar (USD). Traders will keep an eye on the speeches from the Federal Reserve (Fed) officials later on Friday, including Alberto Musalem, Jeff Schmid and Lisa Cook. 

    New Zealand Retail Sales were stronger than expected in the first quarter (Q1) this year as interest-rate cuts triggered improved consumer demand and confidence. The country’s Retail Sales rose 0.8% QoQ in Q1 from the previous reading of 0.9%, according to the official data published by Statistics New Zealand on Friday.  The upbeat New Zealand economic data underpin the China-proxy Kiwi, as China is a major trading partner of New Zealand.

    On the other hand, the stronger US S&P Global Purchasing Managers Indices (PMIs) might boost the Greenback and drag the pair lower. Fed Governor Christopher Waller said that markets are monitoring fiscal policy. Waller further stated that if tariffs are close to 10%, the economy would be in good shape for H2, and the Fed could be in a position to cut later in the year. Markets have priced in nearly a 71% chance that the Fed would keep its interest rates steady through its next two meetings, according to the CME FedWatch tool.

    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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  • USD/CAD extends the decline to near 1.3850 amid weaker US Dollar 

    USD/CAD extends the decline to near 1.3850 amid weaker US Dollar 


    • USD/CAD trades in negative territory near 1.3855 in Thursday’s early Asian session. 
    • Worries about a ballooning US deficit weigh on the US Dollar. 
    • The advanced S&P Global Manufacturing and Services PMI reports will be closely watched later on Thursday. 

    The USD/CAD pair extends its downside to around 1.3855 during the early Asian session on Thursday, pressured by a weaker US Dollar (USD). Investors await the advanced S&P Global Manufacturing and Services PMI reports later on Thursday, followed by the Chicago Fed National Activity Index, the usual Initial Jobless Claims and Existing Home Sales. 

    The ‘Sell America’ investment theme continues to undermine the Greenback and drag the pair to the two-week low. The White House put pressure on Republicans on Wednesday, urging lawmakers to quickly approve President Donald Trump’s signature tax bill, adding that a failure to do so would be the “ultimate betrayal.”

    “The disappointing auction results … fit the narrative of weakening demand for U.S. assets and a ‘sell America’ trade amid fiscal concerns,” said Kim Rupert, managing director, global fixed income analysis at Action Economics in San Francisco.

    On the other hand, a decline in Crude Oil prices could undermine the commodity-linked Loonie and create a tailwind for the pair. It’s worth noting that Canada is the largest oil exporter to the US, and lower crude oil prices tend to have a negative impact on the CAD value. 

    Canadian Dollar FAQs

    The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

    The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

    The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

    While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

    Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.

    Market players will keep an eye on the release of US PMI reports, which is due later on Thursday. In case of a stronger-than-expected outcome, this could lift the USD against the Canadian Dollar (CAD) in the near term.



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  • Australian Dollar depreciates as RBA reduces Official Cash Rate by 25 basis points

    Australian Dollar depreciates as RBA reduces Official Cash Rate by 25 basis points


    • The Australian Dollar falls as the Reserve Bank of Australia implements 25 basis point rate cut.
    • The People’s Bank of China cut its one-year Loan Prime Rate to 3.00% from 3.10% on Tuesday.
    • The US Dollar weakened following Moody’s downgrade of the US credit rating from Aaa to Aa1.

    The Australian Dollar (AUD) dips against the US Dollar (USD) on Tuesday, following a gain of over 0.50% in the previous session. The AUD/USD pair remains under pressure after the interest rate decisions from the Reserve Bank of Australia (RBA) and the People’s Bank of China (PBoC).

    The RBA board voted to cut the Official Cash Rate (OCR) by 25 basis points, reducing it from 4.1% to 3.85% at the conclusion of its May monetary policy meeting. The move was largely expected by markets.

    The PBoC announced a reduction in its Loan Prime Rates (LPRs) on Tuesday. The one-year LPR was lowered from 3.10% to 3.00%, while the five-year LPR was reduced from 3.60% to 3.50%. Given the close trade relationship between Australia and China, any change in the Chinese markets can significantly impact the Aussie Dollar.

    The Australian Dollar continues to weaken due to escalating political turmoil in Australia. The opposition coalition fractured after the National Party withdrew from its alliance with the Liberal Party. Meanwhile, the ruling Labor Party returned to power with a stronger and broader mandate, capitalizing on the disarray within the Opposition.

    Market attention now turns to the Reserve Bank of Australia’s (RBA) upcoming rate decision scheduled for later in the day. The central bank is expected to cut interest rates by 25 basis points, following last week’s stronger-than-anticipated employment data.

    The AUD/USD pair strengthened on Monday as the US Dollar weakened in the wake of Moody’s Ratings downgrading the US credit rating from Aaa to Aa1. This move aligns with similar downgrades by Fitch Ratings in 2023 and Standard & Poor’s in 2011. Moody’s now projects US federal debt to climb to around 134% of GDP by 2035, up from 98% in 2023, with the budget deficit expected to widen to nearly 9% of GDP. This deterioration is attributed to rising debt-servicing costs, expanding entitlement programs, and falling tax revenues.

    Australian Dollar depreciates despite a weaker US Dollar amid a dovish Fed

    • The US Dollar Index (DXY), which tracks the US Dollar (USD) against a basket of six major currencies, is remaining subdued and trading lower at around 100.40 at the time of writing.
    • Economic data released last week pointed to easing inflation, as both the Consumer Price Index (CPI) and Producer Price Index (PPI) signaled a deceleration in price pressures. This has heightened expectations that the Federal Reserve may implement additional rate cuts in 2025, contributing to further weakness in the US Dollar. Additionally, disappointing US Retail Sales figures have deepened concerns over an extended period of sluggish economic growth.
    • US President Donald Trump told Fox News that he is working to gain greater access to China, describing the relationship as excellent and expressing willingness to negotiate directly with President Xi on a potential deal.
    • Trump administration plans to add several Chinese chipmakers to its export blacklist, known as the “entity list.” According to the Financial Times, Trump administration officials expressed concern late Thursday that imposing export controls on key Chinese firms at this stage could undermine the recently reached trade agreement between China and the US during talks in Geneva over the weekend.
    • The National Bureau of Statistics (NBS) reported on Monday that China’s Retail Sales rose by 5.1% year-over-year (YoY) in April, falling short of the 5.5% forecast and down from 5.9% in March. Industrial Production grew by 6.1% YoY during the same period, beating the expected 5.5% but slowing from the previous 7.7% growth.
    • The risk-sensitive Australian Dollar gained support from renewed optimism surrounding a 90-day US-China trade truce and hopes for further trade deals with other countries. Meanwhile, US Treasury Secretary Scott Bessent told CNN on Sunday that President Donald Trump intends to implement tariffs at previously threatened levels on trading partners that do not engage in negotiations “in good faith.”
    • According to the Australian Bureau of Statistics (ABS), employment surged by 89,000 in April, significantly higher than the 36,400 increase in March and far above the forecasted 20,000. Meanwhile, the Unemployment Rate remained unchanged at 4.1%.
    • Australia’s seasonally adjusted Wage Price Index rose by 3.4% year-over-year in Q1 2025, up from a 3.2% increase in Q1 2024 and surpassing market forecasts of a 3.2% gain. This marks a recovery from the prior quarter, which recorded the slowest wage growth since Q3 2022. On a quarterly basis, the index climbed 0.9% in Q1, surpassing the projected 0.8% rise.

    Australian Dollar hovers around 0.6450, support appears at nine-day EMA

    AUD/USD is trading near 0.6450 on Tuesday, with technical indicators on the daily chart pointing to a bullish bias. The pair remains above the nine-day Exponential Moving Average (EMA), while the 14-day Relative Strength Index (RSI) holds above the 50 mark, suggesting continued upward momentum.

    On the upside, immediate resistance is located at the six-month high of 0.6515, posted on December 2, 2024. A sustained break above this level could open the door to the seven-month high of 0.6687 from November 2024.

    Support is initially seen at the nine-day EMA of 0.6429, followed by the 50-day EMA around 0.6363. A clear drop below these levels would likely weaken the short- to medium-term outlook, potentially triggering a deeper decline toward the March 2020 low of 0.5914.

    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 Japanese Yen.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD -0.03% -0.03% -0.07% 0.09% 0.43% 0.22% -0.09%
    EUR 0.03% 0.00% -0.02% 0.13% 0.47% 0.27% -0.06%
    GBP 0.03% -0.00% -0.06% 0.12% 0.44% 0.28% -0.02%
    JPY 0.07% 0.02% 0.06% 0.16% 0.50% 0.29% 0.03%
    CAD -0.09% -0.13% -0.12% -0.16% 0.35% 0.13% -0.15%
    AUD -0.43% -0.47% -0.44% -0.50% -0.35% -0.20% -0.49%
    NZD -0.22% -0.27% -0.28% -0.29% -0.13% 0.20% -0.28%
    CHF 0.09% 0.06% 0.02% -0.03% 0.15% 0.49% 0.28%

    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).

    Economic Indicator

    RBA Interest Rate Decision

    The Reserve Bank of Australia (RBA) announces its interest rate decision at the end of its eight scheduled meetings per year. If the RBA is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Australian Dollar (AUD). Likewise, if the RBA has a dovish view on the Australian economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for AUD.


    Read more.

    Last release:
    Tue May 20, 2025 04:30

    Frequency:
    Irregular

    Actual:
    3.85%

    Consensus:
    3.85%

    Previous:
    4.1%

    Source:

    Reserve Bank of Australia



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  • USD/CAD remains weak near 1.3950 ahead of Canadian CPI release

    USD/CAD remains weak near 1.3950 ahead of Canadian CPI release


    • USD/CAD weakens to around 1.3950 in Tuesday’s early Asian session.
    • Moody’s downgrades the US credit rating to ‘AA1’, weighing on the US Dollar.
    • A dovish turn from the BoC has fueled speculation of a June rate cut. 

    The USD/CAD pair softens to near 1.3950 during the early Asian session on Tuesday. The Greenback edges lower against the Canadian Dollar (CAD) on a surprise downgrade of the US government’s credit rating late on Friday and renewed trade tensions. Traders will keep an eye on the Canadian Consumer Price Index (CPI) inflation data, which is due later on Tuesday.

    Moody’s downgrade of America’s sovereign rating to ‘AA1’ from ‘AAA,’ along with rising expectations that the Federal Reserve (Fed) will soon start cutting rates amid cooling US inflation, have eroded the US Dollar’s (USD) appeal.  The downgrade underscores growing concerns over fiscal deterioration and tariff-induced distortions under US President Donald Trump. 

    Fed officials maintain caution and call for more clarity before committing to policy changes, which caps the upside for the USD. The markets are now pricing in a nearly 91.6% odds of rates holding at 4.25%–4.50% in the June meeting and a 65.1% chance of no change in July, according to the CME FedWatch tool. 

    Meanwhile, a decline in Crude Oil prices could undermine the commodity-linked Loonie. It’s worth noting that Canada is the largest oil exporter to the US, and lower crude oil prices tend to have a negative impact on the CAD value. 

    Nonetheless, dovish expectations for the Bank of Canada (BoC) after lackluster April job gains and a rise in unemployment might weigh on the CAD and create the pair’s downside. Capital Economics analysts said that US tariffs are finally weakening the Canadian economy, increasing the likelihood of BoC rate reductions at an aggressive pace.

    Canadian Dollar FAQs

    The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

    The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

    The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

    While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

    Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.



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