Forex News Timeline

Thursday, July 24, 2025

The USD/CAD pair clings to losses near an almost three-week low around 1.3600 during the Asian trading session on Thursday.

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The Loonie pair faces selling pressure as the safe-haven demand of the US Dollar (USD) has diminished amid hopes that the United States (US) and the European Union (EU) will strike a trade agreement ahead of the August 1 tariff deadline.At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, seems vulnerable near the two-week low around 97.00.Investors turn increasingly confident that economies on both sides of the Atlantic could finalize an agreement, which would be similar to the tariff deal took place between US and Japan on Tuesday. This means that Washington has offered a reduction in the baseline tariff and automobile levy to 15%.Meanwhile, investors await the flash US S&P Global PMI data for July, which will be published at 13:45 GMT.In Canada, investors will focus on the monthly Retail Sales data for May, which will be published at 12:30 GMT. The Retail Sales data is expected to have declined by 1.1% after a nominal growth of 0.3% in April.USD/CAD exhibits volatility contraction around 1.3600, oscillating inside Wednesday’s trading range. The near-term trend of the pair remains bearish as the 20-day Exponential Moving Average (EMA) slopes downwards to near 1.3666.The 14-day Relative Strength Index (RSI) slides to near 40.00. A fresh downside momentum would trigger if the RSI falls below that level.The asset could slide towards the psychological level of 1.3500 and the September 25 low of 1.3420 if it breaks below the June 16 low of 1.3540.On the contrary, an upside move by the pair above the May 29 high of 1.3820 would open the door towards the May 21 high of 1.3920, followed by the May 15 high of 1.4000.USD/CAD daily chart US Dollar FAQs What is the US Dollar? The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away. How do the decisions of the Federal Reserve impact the US Dollar? The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback. What is Quantitative Easing and how does it influence the US Dollar? In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar. What is Quantitative Tightening and how does it influence the US Dollar? Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.

The Indian Rupee (INR) opens on a positive note against the US Dollar (USD) on Thursday after a five-day losing streak.

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The USD/INR pair slides to near 86.45 as the market sentiment turns upbeat, following hopes that the United States (US) and the European Union (EU) are close to reaching a trade agreement ahead of the August 1 tariff deadline.A report from Financial Times (FT) showed on Wednesday that Washington and Brussels will strike an agreement, which will include 15% tariffs on imports from the European Union (EU). The report also showed that the shared continent accepted a higher baseline tariff rate to avert a damaging trade war, according to an EU official, following the announcement of the US-Japan trade agreement on Tuesday in which Washington slashed the baseline and automobile levy to 15% from 25%.A few weeks back, US President Donald Trump sent a letter to the European Commission (EC), dictating a 30% tariff rate, for failing to reach a trade pact during the 90-day pause period.The closure of trade pacts by the US with its key trading partners has diminished upside risks to global trade. This has led to a decline in demand for safe-haven assets. The US Dollar has also extended its downside on hopes of the US-EU trade deal. At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, holds onto losses near a fresh over two-week low around 97.15 posted on Wednesday.Daily digest market movers: Investors await flash India-US PMI data for JulyA positive opening by the Indian Rupee on Thursday is purely driven by upbeat market sentiment. However, it is doubtful whether the Indian currency will hold the recovery as Foreign Institutional Investors (FIIs) continue to pare their stake in equity markets.Indian bourses saw an outflow of Rs. 4,209.11 crores worth of foreign investment on Wednesday, while indices extended their recovery move seen initially on Monday. So far, FIIs have sold Rs. 26,395.01 crores worth of equities in July.Meanwhile, investors await preliminary India’s HSBC Purchasing Managers’ Index (PMI) data for July, which will be published at 05:00 GMT. The PMI data will show whether the overall business activity was impacted by global trade uncertainty, which is driven by the US tariff policy.On Wednesday, the Reserve Bank of India’s (RBI) monthly bulletin report for June showed that the overall business activity remained resilient due to a strong momentum in the services sector and summer-sown crops. However, the growth in industrial activity remained modest. Meanwhile, the Indian central bank has advised caution in financial market sentiment due to uncertainty in India-US trade agreement and mixed corporate earnings in the first quarter of the year.In Thursday’s session, the flash US S&P Global PMI data for July will also remain on investors’ radar, which will be published at 13:45 GMT. The US PMI report is expected to show that overall business activity grew at a faster pace, driven by expansion in both manufacturing and the services sector.Technical Analysis: USD/INR retraces to near 86.40USD/INR corrects to near 86.40 at open on Thursday after refreshing the monthly high around 86.65 the previous day. The near-term trend of the pair remains bullish as the 20-day Exponential Moving Average (EMA) slopes higher around 86.15.The 14-day Relative Strength Index (RSI) strives to break above 60.00. A fresh bullish momentum would emerge if the RSI breaks above that level.Looking down, the 50-day EMA near 85.85 will act as key support for the major. On the upside, the June 23 high near 87.00 will be a critical hurdle for the pair.  Indian Rupee FAQs What are the key factors driving the Indian Rupee? The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee. How do the decisions of the Reserve Bank of India impact the Indian Rupee? The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference. What macroeconomic factors influence the value of the Indian Rupee? Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee. How does inflation impact the Indian Rupee? Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.

The EUR/USD pair extends its upside to around 1.1775 during the early European session on Thursday. The Euro (EUR) edges higher against the US Dollar (USD) amid hope for the European Union (EU) and the United States (US) trade deal.

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The Euro (EUR) edges higher against the US Dollar (USD) amid hope for the European Union (EU) and the United States (US) trade deal. All eyes will be on the European Central Bank (ECB) later on Thursday, with no change in rate expected. The EU and the US are moving toward a trade agreement that could include a 15% US baseline tariff on EU goods and possible exemptions. Optimism surrounding the trade deal provides some support to the shared currency. European trade negotiators were trying to negotiate a deal to avoid the 30% tariff rate that Trump has announced he would slap on imports from the EU on August 1.Nonetheless, the bloc plans 93 billion euros in counter-tariffs if no deal is reached, which might escalate trade tensions. Any signs of negative developments surrounding US-EU trade talks could exert some selling pressure on the EUR against the USD. The ECB is expected to leave the deposit rate unchanged at 2.0% at its July meeting on Thursday as policymakers await clarity on what US President Donald Trump’s tariffs will do to inflation. ECB President Christine Lagarde is likely to keep all options on the table during the press conference. Any hawkish comments from ECB policymakers could underpin the EUR in the near term. Later on Thursday, the preliminary reading of US Purchasing Managers Index (PMI) data for July will be in the spotlight. Also, the weekly US Initial Jobless Claims, New Home Sales, and the Chicago Fed National Activity Index will be released later on the same day.  Euro FAQs What is the Euro? 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%). What is the ECB and how does it impact the Euro? 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. How does inflation data impact the value of the Euro? 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. How does economic data influence the value of the Euro? 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. How does the Trade Balance impact the Euro? 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.

FX option expiries for Jul 24 NY cut at 10:00 Eastern Time via DTCC can be found below.

FX option expiries for Jul 24 NY cut at 10:00 Eastern Time via DTCC can be found below.EUR/USD: EUR amounts1.1550 1.3b1.1620 1.5b1.1625 2.7b1.1630 1.7b1.1650 1.1b1.1665 1.2b1.1700 3.4b1.1760 1.2b1.1800 1.4b1.1950 1bUSD/JPY: USD amounts                                 145.20 890m145.50 948m147.00 1.4b147.50 2.2bUSD/CHF: USD amounts     0.7925 550m0.8025 617mAUD/USD: AUD amounts0.6500 512m0.6600 1b0.6650 517mUSD/CAD: USD amounts       1.3785 676mNZD/USD: NZD amounts0.6010 599m0.6050 636mEUR/GBP: EUR amounts        0.8700 552m

India HSBC Composite PMI: 60.7 (July) vs previous 61

India HSBC Manufacturing PMI: 59.2 (July) vs 58.4

India HSBC Services PMI: 59.8 (July) vs previous 60.4

The USD/CHF pair enters a bearish consolidation phase during the Asian session on Thursday and oscillates in a range around the 0.7920 area, close to a three-week low touched the previous day.

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Investors seem uncertain about the likely timing and pace of interest rate cuts by the Federal Reserve (Fed). Moreover, fears that the central bank's independence could be under threat from mounting political interference keep the USD bulls on the defensive.In fact, US President Donald Trump has been personally attacking Fed Chair Jerome Powell for not lowering borrowing costs. Trump has also repeatedly called for the central bank chief's resignation. Meanwhile, US Treasury Secretary Scott Bessent said that the new Fed Chair nominee is likely to be announced in December or January. This adds a layer of uncertainty and fails to assist the USD to register any meaningful recovery, in turn, weighing on the USD/CHF pair. That said, the latest trade optimism remains supportive of a positive risk tone and holds back traders from placing aggressive bullish bets around the safe-haven Swiss Franc (CHF). Trump announced late Tuesday that his administration had reached a trade deal with Japan, while reports suggest that the US and the European Union are heading towards a 15% trade deal. This is seen as a key factor that helps limit the downside for the USD/CHF pair, at least for now.Traders now look forward to the release of flash PMIs, which should provide a fresh insight into the global economic health and drive the broader risk sentiment. Furthermore, the European Central Bank (ECB) policy decision could infuse volatility in the markets and influence safe-haven assets. Apart from this, the US Weekly Jobless Claims and New Home Sales data might contribute to producing trading opportunities around the USD/CHF pair later this Thursday. Swiss Franc FAQs What key factors drive the Swiss Franc? 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. Why is the Swiss Franc considered a safe-haven currency? 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. How do decisions of the Swiss National Bank impact the Swiss Franc? 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. How does economic data influence the value of the Swiss Franc? 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. How does the Eurozone monetary policy affect the Swiss Franc? 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.

GBP/USD remains steady after four days of gains, trading around 1.3580 during the Asian hours on Thursday.

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The pair maintains its position near two-week highs as the US Dollar (USD) continues to weaken amid risk-on sentiment, driven by the optimism over further trade deals between the United States (US) and key partners.The Financial Times reported that the European Union (EU) and the United States (US) are closing in on a deal that would impose 15% tariffs on EU goods imported into the US. Additionally, US President Donald Trump announced on Tuesday a major tariff deal with Japan, which includes a 15% tariff on Japanese exports.However, the downside of the US Dollar could be restrained amid easing concerns over the Federal Reserve’s (Fed) independence. US Treasury Secretary Scott Bessent said late Thursday that a nominee for the next Federal Reserve Chair is likely to be announced in December or January. Bessent emphasized that there is “no rush” to select a successor to current Fed Chair Jerome Powell.In the United Kingdom (UK), traders will likely observe S&P Purchasing Managers Index (PMI) data, due on Thursday. The report is expected to show a slight improvement in manufacturing and growth in the service sector in July. Friday’s Retail Sales are also projected to rebound in June, helped by hot weather.The Bank of England (BoE) is anticipated to temporarily pause its sales of long-term GILTS due to subdued demand from traditional buyers like pension funds. Meanwhile, traders have slightly reduced their expectations for BoE policy easing, though they still project two rate cuts in 2025. Pound Sterling FAQs What is the Pound Sterling? 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). How do the decisions of the Bank of England impact on the Pound Sterling? 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. How does economic data influence the value of the Pound? 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. How does the Trade Balance impact the Pound? 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.

Gold prices remained broadly unchanged in India on Thursday, according to data compiled by FXStreet.

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The price for Gold stood at 9,388.78 Indian Rupees (INR) per gram, broadly stable compared with the INR 9,396.91 it cost on Wednesday. The price for Gold was broadly steady at INR 109,507.50 per tola from INR 109,603.80 per tola a day earlier. Unit measure Gold Price in INR 1 Gram 9,388.78 10 Grams 93,886.73 Tola 109,507.50 Troy Ounce 292,024.10   2025 Gold Forecast Guide [PDF] Download your free copy of the 2025 Gold Forecast Daily Digest Market Movers: Gold price is pressured by receding safe-haven demand on trade optimism US President Donald Trump announced late Tuesday that his administration had reached a trade deal with Japan. Furthermore, reports that the US and the European Union are heading towards a 15% trade deal boost investors' confidence and weigh on the safe-haven Gold price for the second straight day on Thursday. The markets do not expect an interest rate cut from the US Federal Reserve in July despite Trump's continuous push for lower borrowing costs. In fact, Trump has been attacking Fed Chair Jerome Powell personally over his stance on holding rates and repeatedly calling for the central bank chief's resignation. Moreover, Fed Governor Chris Waller and Trump appointee Vice Chair for Supervision Michelle Bowman have advocated a rate reduction as soon as the next policy meeting on July 30. This keeps the US Dollar depressed near a two-and-a-half-week low and could offer some support to the non-yielding yellow metal. Traders now look forward to the release of flash PMIs, which would provide a fresh insight into the global economic health and influence the safe-haven commodity. Apart from this, the crucial European Central Bank policy decision might infuse some volatility in the markets and drive the XAU/USD pair. Meanwhile, the US economic docket features Weekly Initial Jobless Claims and New Home Sales data, which, in turn, would drive the USD and contribute to producing short-term trading opportunities around the commodity. Nevertheless, the fundamental backdrop warrants caution for aggressive traders. FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.   Gold FAQs Why do people invest in Gold? Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government. Who buys the most Gold? Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves. How is Gold correlated with other assets? Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal. What does the price of Gold depend on? The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up. (An automation tool was used in creating this post.)

The AUD/JPY cross declines to near 96.60 during the Asian trading hours on Thursday. The Australian Dollar (AUD) remains weak against the Japanese Yen (JPY) despite the hawkish remarks from the Reserve Bank of Australia (RBA) policymakers. 

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The Australian Dollar (AUD) remains weak against the Japanese Yen (JPY) despite the hawkish remarks from the Reserve Bank of Australia (RBA) policymakers. RBA Governor Michele Bullock said on Thursday that the central bank is wary of cutting interest rates until it has gathered more evidence that inflation remains on a path back towards the 2.5% target. Bullock further stated that labor demand remains strong while core inflation is easing gradually. Her hawkish comments, however, fail to boost the Aussie as traders continue to assess the developments surrounding a new US trade deal. US Treasury Secretary Scott Bessent said on Thursday that he will meet with Chinese officials in Stockholm next week to discuss an extension to the deadline for negotiating a trade deal. Investors remain cautious on how tariff deals will play out.Optimism surrounding the fresh US-Japan trade agreement provides some support to the Japanese Yen and acts as a headwind for the cross. US President Donald Trump on Wednesday announced a “massive” deal with Japan that includes “reciprocal” tariffs of 15% on the country’s exports to the US. The new agreement is notably lower than the 25% previously threatened by Trump.On the other hand, rising political uncertainty in Japan might exert some selling pressure on the JPY. Japanese Prime Minister Shigeru  Ishiba on Wednesday denied plans to resign. The speculation came after the ruling coalition’s loss of its upper house majority in weekend elections, heightening fears about leadership stability. Japanese Yen FAQs What key factors drive the Japanese Yen? The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors. How do the decisions of the Bank of Japan impact the Japanese Yen? One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen. How does the differential between Japanese and US bond yields impact the Japanese Yen? Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential. How does broader risk sentiment impact the Japanese Yen? The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.

Gold price (XAU/USD) remains on the defensive during the Asian session on Thursday and looks to extend the previous day's sharp retracement slide from its highest level since June 16.

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Reports that the US and the European Union (EU) are closing in on a tariff deal add to the optimism led by the US-Japan trade agreement. This remains supportive of the upbeat market mood and turns out to be a key factor undermining demand for the safe-haven bullion. However, a combination of factors could act as a tailwind for the Gold price and limit deeper losses. Investors remain uncertain about the likely timing and the pace of interest rate cuts by the Federal Reserve (Fed). Adding to this, fears that the central bank's independence could be under threat from mounting political interference keep the US Dollar (USD) depressed near a two-week low and could offer support to the non-yielding yellow metal. Daily Digest Market Movers: Gold price is pressured by receding safe-haven demand on trade optimismUS President Donald Trump announced late Tuesday that his administration had reached a trade deal with Japan. Furthermore, reports that the US and the European Union are heading towards a 15% trade deal boost investors' confidence and weigh on the safe-haven Gold price for the second straight day on Thursday. The markets do not expect an interest rate cut from the US Federal Reserve in July despite Trump's continuous push for lower borrowing costs. In fact, Trump has been attacking Fed Chair Jerome Powell personally over his stance on holding rates and repeatedly calling for the central bank chief's resignation. Moreover, Fed Governor Chris Waller and Trump appointee Vice Chair for Supervision Michelle Bowman have advocated a rate reduction as soon as the next policy meeting on July 30. This keeps the US Dollar depressed near a two-and-a-half-week low and could offer some support to the non-yielding yellow metal.Traders now look forward to the release of flash PMIs, which would provide a fresh insight into the global economic health and influence the safe-haven commodity. Apart from this, the crucial European Central Bank policy decision might infuse some volatility in the markets and drive the XAU/USD pair. Meanwhile, the US economic docket features Weekly Initial Jobless Claims and New Home Sales data, which, in turn, would drive the USD and contribute to producing short-term trading opportunities around the commodity. Nevertheless, the fundamental backdrop warrants caution for aggressive traders. Gold price bulls have the upper hand amid the formation of a short-term ascending trend-channelFrom a technical perspective, the recent move up along an upward sloping channel since the beginning of this month points to a well-established short-term uptrend. Adding to this, positive oscillators on the daily chart suggest that the Gold price is more likely to find decent support near the $3,370-3,368 strong horizontal resistance breakpoint. A convincing break below the said area, however, could expose the lower end of the trend-channel, currently pegged near the $3,333-3,332 region. The latter should act as a key pivotal point, which if broken decisively might shift the near-term bias in favor of the XAU/USD bears.On the flip side, momentum back above the $3,400 mark could pause near the $3,438-3,440 static barrier. This coincides with the trend-channel resistance, above which the Gold price could accelerate the positive move towards challenging the all-time peak, around the $3,500 psychological mark touched in April. Tariffs FAQs What are tariffs? 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. What is the difference between taxes and tariffs? 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. Are tariffs good or bad? 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. What is US President Donald Trump’s tariff plan? 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.

EUR/JPY breaks its five-day winning streak, trading around 171.90 during the Asian hours on Thursday. The bullish bias is strengthening as the technical analysis of the daily chart shows that the currency cross moves upwards within the ascending channel pattern.

.fxs-major-currency-prices-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-major-currency-prices-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-major-currency-prices-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:8px 16px}table.fxs-major-currency-prices-currency-prices-table{width:100%;text-align:center;border-collapse:collapse;font-size:1rem}table.fxs-major-currency-prices-currency-prices-table th{background-color:#f2f2f2}table.fxs-major-currency-prices-currency-prices-table td{color:#fff}table.fxs-major-currency-prices-currency-prices-table td.green{background-color:#9cd6cd}table.fxs-major-currency-prices-currency-prices-table td.red{background-color:#faafb5}table.fxs-major-currency-prices-currency-prices-table td.blue-grey{background-color:#888a93}.fxs-major-currency-prices-currency-prices-legend{font-size:11px;margin:8px;color:#49494f}@media (min-width:680px){.fxs-major-currency-prices-content{font-size:16px;line-height:21.6px}.fxs-major-currency-prices-title{font-size:19.2px;line-height:27.2px}}.fxs-major-currency-prices-currency-price td.dark-green{background-color:#39ad9a}.fxs-major-currency-prices-currency-price td.light-green{background-color:#9cd6cd}.fxs-major-currency-prices-currency-price td.gray{background-color:#888a93}.fxs-major-currency-prices-currency-price td.light-red{background-color:#faafb5}.fxs-major-currency-prices-currency-price td.strong-red{background-color:#f55e6a}EUR/JPY may test the immediate barrier at the nine-day EMA of 172.15.The 14-day RSI remains above 50, indicating a persistent bullish bias.The initial support appears at the ascending channel’s lower boundary around 170.50.EUR/JPY breaks its five-day winning streak, trading around 171.90 during the Asian hours on Thursday. The bullish bias is strengthening as the technical analysis of the daily chart shows that the currency cross moves upwards within the ascending channel pattern.The 14-day Relative Strength Index (RSI) is positioned above the 50 mark, strengthening bullish bias. However, the short-term price momentum is weaker as the EUR/JPY cross has moved below the nine-day Exponential Moving Average (EMA).On the upside, the immediate barrier appears at the nine-day EMA of 172.15, followed by the fresh yearly high of 173.25, reached on July 16. A break above this level could strengthen the bullish bias and support the EUR/JPY cross to navigate the region around the upper boundary of the ascending channel at 176.10.The EUR/JPY cross may approach the ascending channel’s lower boundary around 170.50. A break below the channel could weaken the bullish bias and put downward pressure on the currency cross to test the 50-day EMA at 168.50, aligned with monthly low at 168.46.EUR/JPY: Daily Chart Euro PRICE Today The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the Japanese Yen. USD EUR GBP JPY CAD AUD NZD CHF USD -0.06% 0.00% -0.32% 0.06% -0.23% -0.10% -0.06% EUR 0.06% 0.06% -0.26% 0.14% -0.16% -0.05% 0.00% GBP -0.00% -0.06% -0.34% 0.06% -0.23% -0.11% -0.06% JPY 0.32% 0.26% 0.34% 0.39% 0.09% 0.17% 0.14% CAD -0.06% -0.14% -0.06% -0.39% -0.26% -0.17% -0.12% AUD 0.23% 0.16% 0.23% -0.09% 0.26% 0.12% 0.17% NZD 0.10% 0.05% 0.11% -0.17% 0.17% -0.12% 0.05% CHF 0.06% -0.00% 0.06% -0.14% 0.12% -0.17% -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).

Reserve Bank of Australia Governor Michele Bullock said on Thursday that the US Federal Reserve (Fed) is preserving its independence in challenging times. Bullock added that monthly job numbers pop up and down, and the board would have made the same rate decision.

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Monthly job numbers pop up and down, board would have made same rate decision.

Don't think digital money is inherently inflationary.

New complete monthly CPI will still be transitional for a while.

New CPI will be much more helpful in judging inflation momentum.Market reactionAt the press time, the AUD/USD pair was up 0.23% on the day to trade at 0.6617. RBA FAQs What is the Reserve Bank of Australia and how does it influence the Australian Dollar? 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. How does inflation data impact the value of the Australian Dollar? 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. How does economic data influence the value of the Australian 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. What is Quantitative Easing (QE) and how does it affect the Australian Dollar? 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. What is Quantitative tightening (QT) and how does it affect the Australian Dollar? 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.

Reserve Bank of Australia (RBA) Governor Michele Bullock is speaking at the Anika Foundation in Sydney on Thursday, with audience questions expected.

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Labor market has eased only gradually, unemployment rate relatively low.

Rise in unemployment in June was in line with our forecasts, not a "shock".

June data suggests labor market moved a little further towards balance.

Leading indicators not pointing to further significant near-term rise in unemployment.

Other labour market measures, such as vacancy rate, have been stable.

Labour market rebalancing through vacancies, hours worked, voluntary job switching.

RBA not targeting a specific unemployment rate or job losses.

Q2 core inflation may not have slowed as much as first expected.

Need data to support forecast of core inflation slowing toward 2.5%.

Want to make sure that inflation remains low and stable from here on in.

Still uncertainty and unpredictability in global economy.

Likelihood of a severe downside ‘trade war’ appears to have diminished.Market reactionAUD/USD flirts with eight-month highs near 0.6620 following Governor Bullock’s cautious remarks, adding 0.26% on the day as of writing. RBA FAQs What is the Reserve Bank of Australia and how does it influence the Australian Dollar? 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. How does inflation data impact the value of the Australian Dollar? 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. How does economic data influence the value of the Australian 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. What is Quantitative Easing (QE) and how does it affect the Australian Dollar? 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. What is Quantitative tightening (QT) and how does it affect the Australian Dollar? 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.

Silver price (XAG/USD) extends its losses for the second successive session, trading around $39.10 per troy ounce during the Asian hours on Thursday. The price of Silver struggles due to weakened safe-haven demand, driven by the optimism over further trade deals between the US and key partners.

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The price of Silver struggles due to weakened safe-haven demand, driven by the optimism over further trade deals between the US and key partners.The Financial Times reported that the European Union (EU) and the United States (US) are closing in on a deal that would impose 15% tariffs on EU goods imported into the US. Additionally, US President Donald Trump announced on Tuesday a major tariff deal with Japan, which includes a 15% tariff on Japanese exports.However, some caution remained amid ongoing threats of 15% to 50% tariffs on countries such as South Korea and India, which are still negotiating deals. Traders also await clarity on talks with China, with Treasury Secretary Bessent scheduled to meet Chinese officials in the week ahead. On the monetary policy front, markets are focused on next week’s Federal Reserve meeting, where rates are expected to be kept on hold, with potential cuts anticipated in October.However, the safe-haven demand for Silver could also be dampened due to easing concerns over the Federal Reserve’s (Fed) independence. US Treasury Secretary Scott Bessent said late Thursday that a nominee for the next Federal Reserve Chair is likely to be announced in December or January. Bessent emphasized that there is “no rush” to select a successor to current Fed Chair Jerome Powell. Silver FAQs Why do people invest in Silver? Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets. Which factors influence Silver prices? Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices. How does industrial demand affect Silver prices? Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices. How do Silver prices react to Gold’s moves? Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

The Japanese Yen (JPY) strengthens against its American counterpart for the fourth consecutive day and advances to a nearly three-week peak during the Asian session on Thursday.

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The Japanese Yen (JPY) strengthens against its American counterpart for the fourth consecutive day and advances to a nearly three-week peak during the Asian session on Thursday. The recently announced Japan-US trade deal reduces economic uncertainty and raises the likelihood that the Bank of Japan (BoJ) will resume its tightening cycle later this year, which, in turn, is seen as a key factor that continues to underpin the JPY. The US Dollar (USD), on the other hand, languishes near a two-and-a-half-week low and exerts additional pressure on the USD/JPY pair. However, the domestic political uncertainty and the disappointing release of the flash Japan Manufacturing PMI might hold back the JPY bulls from placing aggressive bets. Furthermore, the upbeat market mood should contribute to capping gains for the safe-haven JPY and limiting further losses for the USD/JPY pair. Traders now look forward to the flash US PMIs to grab short-term opportunities later during the North American session. Nevertheless, the mixed fundamental backdrop warrants caution before placing aggressive directional bets. Japanese Yen bulls retain control as US-Japan deal eases uncertainty, revives BoJ hike betsJapan's trade deal with the US has removed a key downside risk for the domestic economy, suggesting that conditions for the Bank of Japan to hike interest rates further may start to fall in place. In fact, BoJ Deputy Governor Shinichi Uchida reiterated on Wednesday the central bank's course of action to continue raising interest rates if the economy and prices move in line with forecasts. Moreover, a Reuters poll showed that a majority of economists expect the BoJ to hike its key interest rate again by the year-end, though most expect the central bank could wait for some time and would stand pat at this month's meeting. Nevertheless, reviving BoJ rate hike bets continues to underpin the Japanese Yen and drags the USD/JPY pair below the 146.00 mark on Thursday. Meanwhile, Japan's ruling coalition – the Liberal Democratic Party (LDP) and its junior partner Komeito – suffered a defeat in the upper house elections last weekend. This adds a layer of uncertainty and fuels concerns about Japan's fiscal health. Adding to this, a private-sector survey showed on Thursday that Japan’s manufacturing activity unexpectedly slipped into contraction during July.In fact, the S&P Global Japan manufacturing Purchasing Managers’ Index (PMI) dropped to 48.8 from June’s final reading of 50.1 as businesses assessed the impact of US tariffs. This, to a larger extent, overshadows the upbeat gauge for the services sector, which increases to 53.5 in July from 51.7 in the previous month. Apart from this, the upbeat market mood could cap the safe-haven JPY. The US Dollar struggles to attract any buyers amid fears that the Federal Reserve's independence could be under threat from mounting political interference. US President Donald Trump has been personally attacking Fed Chair Jerome Powell for not lowering interest rates. US Treasury Secretary Scott Bessent said that the new Fed Chair nominee is likely to be announced in December or January.Thursday's US economic docket – featuring the usual Weekly Initial Jobless Claims, the flash PMIs, and New Home Sales – might influence the USD price dynamics later during the North American session. Furthermore, the European Central Bank decision could infuse some volatility in the markets, which would drive the safe-haven demand and provide some impetus to the USD/JPY pair. USD/JPY could accelerate the decline once 145.75 support is brokenFrom a technical perspective, an intraday breakdown below the 100-period Simple Moving Average (SMA) and the 146.00 mark could be seen as a key trigger for the USD/JPY bears. Moreover, oscillators on the daily chart have just started gaining negative traction and back the case for a further depreciating move. Some follow-through selling below the 145.75 area (July 10 low) will reaffirm the outlook and drag spot prices to the 145.20-145.15 region, or the 61.8% Fibonacci retracement level of the upswing in July, en route to the 145.00 psychological mark. On the flip side, the 100-period SMA support breakpoint, currently pegged near the 146.60 area, which now coincides with the 38.2% Fibo. retracement level, should now act as an immediate strong barrier. A sustained strength beyond could lift the USD/JPY pair to the 147.00 round figure. This is closely followed by the overnight swing high, around the 147.20 area, which, if cleared, could allow spot prices to accelerate the move up towards the 147.60-147.65 intermediate hurdle en route to the 148.00 round figure. Tariffs FAQs What are tariffs? 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. What is the difference between taxes and tariffs? 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. Are tariffs good or bad? 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. What is US President Donald Trump’s tariff plan? 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.

The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, extends the decline to around 97.15, the lowest since July 7, during the Asian trading hours on Thursday.

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Risk-on sentiment from the fresh US trade deal was offset by political uncertainty surrounding Japanese Prime Minister Shigeru Ishiba's future.Concerns over the Federal Reserve (Fed) independence might weigh on the US Dollar (USD) in the near term, as US President Donald Trump has repeatedly railed against Chair Jerome Powell and urged him to resign because of the US central bank's reluctance to cut interest rates.US Treasury Secretary Scott Bessent said on Thursday that the announcement of a new Federal Reserve (Fed) Chair nominee is expected to occur in December or January next year. Bessent stated that there's "no rush" to identify a successor to Fed Chair Powell, adding that a nominee could potentially come from current board members or the heads of the district banks.Bessent stated that he will meet with Chinese officials in Stockholm next week to discuss an extension to the deadline for negotiating a trade deal. Investors remain cautious on how tariff deals will play out as the August 1 deadline still looms for many countries. Any signs of renewed trade tensions could exert some selling pressure on the Greenback. Traders will focus on the preliminary reading of US Purchasing Managers Index (PMI) data for July, which is due later on Thursday.  The Manufacturing PMI is expected to improve to 52.5 in July from 52.0, while the Services PMI is projected to rise to 53.0 in July versus 52.9 prior. In case of a stronger-than-expected outcome, this could help limit the USD’s losses. Additionally, the weekly US Initial Jobless Claims, New Home Sales, and the Chicago Fed National Activity Index will be released later in the same day.  US Dollar FAQs What is the US Dollar? The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away. How do the decisions of the Federal Reserve impact the US Dollar? The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback. What is Quantitative Easing and how does it influence the US Dollar? In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar. What is Quantitative Tightening and how does it influence the US Dollar? Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.

The Australian Dollar (AUD) advances against the US Dollar (USD) on Thursday, extending its gains for the fifth consecutive day. The AUD/USD pair is reaching fresh eight-month highs above 0.6600 following the release of Australia's preliminary Judo Bank Purchasing Managers Index (PMI) data.

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span{text-decoration:underline}.fxs-event-module-release{margin:0;display:flex;flex-direction:column;gap:2px}.fxs-event-module-release>p{font-size:12.8px;font-family:Roboto;font-style:normal;line-height:17px;margin:0}.fxs-event-module-release>p>strong{color:#8c8d91;font-weight:700}.fxs-event-module-release>p>span{color:#8c8d91;font-weight:400}.fxs-event-module-release>p>a{color:#e4871b;font-weight:700;text-decoration:none}.fxs-event-module-release>p>a:hover>span{text-decoration:underline}.fxs-event-module-inner-calendar .fxs-event-module-container{margin:16px 0 0 0;border-top:1px solid #ececf1;padding:12px 0 0 0}@media (min-width:680px){.fxs-event-module-inner-calendar .fxs-event-module-header{font-size:14.72px;line-height:20px}.fxs-event-module-release p{font-size:14.72px;line-height:20px}.fxs-event-module-read-more{font-size:14.72px;line-height:20px}.fxs-event-module-calendar-title{font-size:22.4px;line-height:25.6px}.fxs-event-module-title{font-size:19.2px;line-height:27.2px}.fxs-event-module-header{font-size:19.2px;line-height:25.92px}.fxs-event-module-content{font-size:16px;line-height:21.6px}}The Australian Dollar has reached a fresh eight-month high of 0.6613 on Thursday.S&P Australia’s Composite PMI rose to 53.6 in July, marking the highest level since April 2022.US Treasury Secretary Bessent stated that a nominee for the next Fed Chair could be announced in December or January.The Australian Dollar (AUD) advances against the US Dollar (USD) on Thursday, extending its gains for the fifth consecutive day. The AUD/USD pair is reaching fresh eight-month highs above 0.6600 following the release of Australia's preliminary Judo Bank Purchasing Managers Index (PMI) data. The focus shifts toward the Reserve Bank of Australia (RBA) Governor's speech.Judo Bank and S&P Global showed that Australia’s Composite PMI rose to 53.6 in July versus 51.6 prior, reaching the highest level since April 2022 and marking the tenth consecutive month of expansion.Australian Services PMI climbed to 53.8 in July from the previous reading of 51.8, reaching its fastest pace in 16 months. Meanwhile, the Manufacturing PMI came in at 51.6 in July versus 50.6 prior. New orders for manufactured goods rebounded, driving the strongest overall growth in new business in more than three years.The risk-sensitive AUD/USD pair also receives support from improving market sentiment, driven by the latest trade developments. The Financial Times reported that the European Union (EU) and the United States (US) are closing in on a deal that would impose 15% tariffs on EU goods imported into the US.Australian Dollar gains ground as US Dollar declines amid risk-on moodThe US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is continuing to lose ground and trading around 97.10 at the time of writing. Investors will likely observe the US S&P Global Purchasing Managers Index (PMI) data for July later on Thursday.US Treasury Secretary Scott Bessent said on Thursday that a nominee for the next Federal Reserve Chair is likely to be announced in December or January. Bessent emphasized that there is “no rush” to select a successor to current Fed Chair Jerome Powell, noting that the nominee could come from current board members or the heads of the district banks, according to Bloomberg.US President Donald Trump’s announcement of a major tariff deal with Japan, which includes a 15% tariff on Japanese exports. Additionally, talks between the United States (US) and China are gaining momentum ahead of the August 12 deadline.President Trump announced a trade deal with Japan that includes a 15% tariff on Japanese exports to the US. As part of the agreement, Japan will invest $550 billion in the US and open its markets to key American products.Republican Congresswoman Anna Paulina Luna has formally accused the Fed Chair Powell of committing perjury on two separate occasions, both stemming from discussions about the Fed's long-scheduled renovations to its head offices in Washington, DC.Fed Governor Adriana Kugler said that the US central bank should not lower interest rates "for some time" since the effects of Trump administration tariffs are starting to show up in consumer prices. Kugler added that restrictive monetary policy is essential to keep inflationary psychology in line.San Francisco Fed President Mary Daly said last week that expecting two rate cuts this year is a "reasonable" outlook, while warning against waiting too long. Daly added that rates would eventually settle at 3% or higher, exceeding the pre-pandemic neutral rate.Fed Governor Christopher Waller believes that the US central bank should reduce its interest rate target at the July meeting, citing mounting economic risks. Waller added that delaying cuts runs the risk of needing more aggressive action later.US Commerce Secretary Howard Lutnick stated unequivocally in a televised interview, “That’s a hard deadline, so on August 1, the new tariff rates will come in. Nothing stops countries from talking to us after August 1, but they’re going to start paying the tariffs on August 1.”The latest Reserve Bank of Australia’s (RBA) Meeting Minutes indicated that the board agreed further rate cuts were warranted over time, with attention centered on timing and extent of easing. The majority believed it was best to await confirmation of an inflation slowdown before easing. Most members felt cutting rates three times in four meetings would not be "cautious and gradual.”Westpac reports that its Leading Index continues to reflect weakening momentum. The six-month annualised growth rate in the Westpac-Melbourne Institute Leading Index eased to 0.03% in June, down from 0.11% in May. The slowdown is primarily driven by softer commodity prices, waning sentiment, and reduced hours worked.Australian Dollar rises above 0.6600 to mark fresh eight-month highsThe AUD/USD pair is trading around 0.6610 on Thursday. The daily chart’s technical analysis suggested a persistent bullish bias as the pair moves upwards within the ascending channel pattern. The 14-day Relative Strength Index (RSI) is positioned above the 50 mark, suggesting a bullish bias is active. Additionally, the pair has also moved above the nine-day Exponential Moving Average (EMA), indicating that short-term price momentum is strengthening.On the upside, the AUD/USD pair may target the psychological level of 0.6650, followed by the ascending channel’s upper boundary around 0.6680.The AUD/USD pair could find its primary support at nine-day EMA at 0.6558. A break below this level could weaken the short-term price momentum and prompt the pair to test the 50-day EMA of 0.6503. Further declines would weaken the medium-term price momentum and drive the pair to approach the ascending channel’s lower boundary around 0.6480, followed by the three-week low at 0.6454, which was recorded on July 17.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 strongest against the Canadian Dollar. USD EUR GBP JPY CAD AUD NZD CHF USD -0.04% -0.03% -0.39% 0.05% -0.12% -0.12% -0.09% EUR 0.04% 0.02% -0.36% 0.09% -0.07% -0.08% -0.04% GBP 0.03% -0.02% -0.40% 0.08% -0.09% -0.10% -0.07% JPY 0.39% 0.36% 0.40% 0.46% 0.27% 0.22% 0.18% CAD -0.05% -0.09% -0.08% -0.46% -0.14% -0.18% -0.15% AUD 0.12% 0.07% 0.09% -0.27% 0.14% -0.01% 0.03% NZD 0.12% 0.08% 0.10% -0.22% 0.18% 0.00% 0.03% CHF 0.09% 0.04% 0.07% -0.18% 0.15% -0.03% -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). Economic Indicator S&P Global Composite PMI The Composite Purchasing Managers Index (PMI), released on a monthly basis by S&P Global, is a leading indicator gauging private-business activity in Australia for both the manufacturing and services sectors. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the Australian private economy is generally expanding, a bullish sign for the Australian Dollar (AUD). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for AUD. Read more. Last release: Wed Jul 23, 2025 23:00 (Prel) Frequency: Monthly Actual: 53.6 Consensus: - Previous: 51.6 Source: S&P Global

Reserve Bank of New Zealand Chief Economist Paul Conway said on Thursday that tariffs will mean a weaker global economy and weaker demand and the country will constantly monitor data.

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Uncertainty over tariffs is likely to reduce business investment and inflation in New Zealand. 

Tariffs will mean a weaker global economy and weaker global demand. 

Q2 CPI data was very much in line with our expectations.

See scope to lower rates further if inflation continues to moderate.

Early data reads suggest NZ economic growth slowed in the June quarter.Market reaction At the time of writing, the NZD/USD pair is trading 0.11% higher on the day to trade at 0.6052. Tariffs FAQs What are tariffs? 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. What is the difference between taxes and tariffs? 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. Are tariffs good or bad? 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. What is US President Donald Trump’s tariff plan? 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.

The NZD/USD pair trades in positive territory near 0.6055 during the early Asian session on Thursday, bolstered by improved risk sentiment. Traders will keep an eye on the prospects of US-China trade deals that could improve the global economic outlook. 

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}NZD/USD strengthens to around 0.6055 in Thursday’s early Asian session. US and China to discuss tariff deadline extension next week. Traders brace for the preliminary reading of US PMI data for July later on Thursday.The NZD/USD pair trades in positive territory near 0.6055 during the early Asian session on Thursday, bolstered by improved risk sentiment. Traders will keep an eye on the prospects of US-China trade deals that could improve the global economic outlook. US President Donald Trump announced a trade deal on Tuesday with Japan, which lowers tariffs on auto imports to 15% in exchange for a $550 billion package of US-bound investment and loans, per Reuters. These positive developments lift the riskier currency, like the New Zealand Dollar (NZD) against the US Dollar (USD). However, uncertainty over Trump’s tariffs keeps the market on edge. US Treasury Secretary Scott Bessent stated that he will meet with Chinese officials in Stockholm next week to discuss an extension to the deadline for negotiating a trade deal.Tariffs might return to 145% on the US side and 125% on the Chinese side without a trade agreement or a negotiation extension. Any signs of renewed trade tensions might exert some selling pressure on the China-proxy Kiwi, as China is a major trading partner of New Zealand. Furthermore, rising expectations of a rate cut from the Reserve Bank of New Zealand (RBNZ) might contribute to the NZD’s downside. Data released on Monday showed New Zealand's annual inflation rose to a one-year high in the second quarter (Q2) but was below the market consensus. Markets have priced in an 80% possibility of a 25 basis points (bps) cut in August, though investors believe the easing cycle may be nearing its end.Later on Thursday, the preliminary reading of the US Purchasing Managers Index (PMI) data for July will be in the spotlight. Also, the weekly US Initial Jobless Claims, New Home Sales, and the Chicago Fed National Activity Index will be published. If the reports show weaker-than-expected outcomes, this could weigh on the Greenback and act as a tailwind for the pair.  New Zealand Dollar FAQs What key factors drive the New Zealand Dollar? 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. How do decisions of the RBNZ impact the New Zealand Dollar? 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. How does economic data influence the value of the New Zealand Dollar? 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. How does broader risk sentiment impact the New Zealand Dollar? 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.

 

On Thursday, the People’s Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead at 7.1385 as compared to the previous day's fix of 7.1414.

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} On Thursday, the People’s Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead at 7.1385 as compared to the previous day's fix of 7.1414. PBOC FAQs What does the People's Bank of China do? The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market. Who owns the PBoC? The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts. What are the main policy tools used by the PBoC? Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi. Are private banks allowed in China? Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.

Japan Jibun Bank Services PMI rose from previous 51.7 to 53.5 in July

Japan Jibun Bank Manufacturing PMI below expectations (50.2) in July: Actual (48.8)

US Treasury Secretary Scott Bessent said on Thursday that the announcement of a new Federal Reserve (Fed) Chair nominee is expected to occur in December or January next year, per Bloomberg.

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West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $65.30 during the early Asian trading hours on Thursday. The WTI posts modest gains as a new US trade deal boosts market optimism. 

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The WTI posts modest gains as a new US trade deal boosts market optimism. The uptick of black gold is bolstered by a trade deal that US President Donald Trump announced with Japan and the Philippines. On Wednesday, the European Union (EU) officials said they were heading towards a trade deal with the US that would result in a broad 15% tariff on EU goods imported into the US, avoiding a higher 30% duties slated to be implemented from August 1.US crude oil inventories fell last week. The US Energy Information Administration (EIA) weekly crude oil stock report showed crude oil stockpiles in the US for the week ending July 18 declined by 3.169 million barrels, compared to a fall of 3.859 million barrels in the previous week. The market consensus estimated that stocks would decrease by 1.4 million barrels. A fall in U.S. crude stockpiles generally lifts the WTI price, as it reflects stronger demand or tighter supply.US Treasury Secretary Scott Bessent stated that he will meet with Chinese officials in Stockholm next week to discuss extending the trade truce. Any signs of renewed trade tensions between the world’s two largest economies could spark fresh concern over global fuel demand and weigh on the WTI price.  WTI Oil FAQs What is WTI Oil? WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media. What factors drive the price of WTI Oil? Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa. How does inventory data impact the price of WTI Oil The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency. How does OPEC influence the price of WTI Oil? OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.

GBP/USD climbed on Wednesday, posting strong gains for a third straight day and clawing back toward the 1.3600 handle.

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Pound Sterling FAQs What is the Pound Sterling? 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). How do the decisions of the Bank of England impact on the Pound Sterling? 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. How does economic data influence the value of the Pound? 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. How does the Trade Balance impact the Pound? 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.

The preliminary reading of Australia's Judo Bank Manufacturing Purchasing Managers Index (PMI) came in at 51.6 in July versus 50.6 prior, the latest data published by Judo Bank and S&P Global showed on Thursday.

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} The preliminary reading of Australia's Judo Bank Manufacturing Purchasing Managers Index (PMI) came in at 51.6 in July versus 50.6 prior, the latest data published by Judo Bank and S&P Global showed on Thursday.The Judo Bank Australian Services PMI climbed to 53.8 in July from the previous reading of 51.8, while the Composite PMI rose to 53.6 in July versus 51.6 prior. Market reactionAt the press time, the AUD/USD pair was up 0.01% on the day to trade at 0.6602. Australian Dollar FAQs What key factors drive the Australian Dollar? 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. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? 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. How does the health of the Chinese Economy impact the Australian Dollar? 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. How does the price of Iron Ore impact the Australian Dollar? 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. How does the Trade Balance impact the Australian Dollar? 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.

The USD/CAD pair holds steady near 1.3600 during the early Asian session on Thursday. However, positive sentiment from a new US trade deal could improve the global economic outlook and lift the Canadian Dollar (CAD).

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However, positive sentiment from a new US trade deal could improve the global economic outlook and lift the Canadian Dollar (CAD). The preliminary reading of US Purchasing Managers Index (PMI) reports for July and Canadian Retail Sales data for May will be the highlights later on Thursday.The Financial Times reported that the EU and the US are closing in on a deal that would impose 15% tariffs on EU goods imported into the US. Progress in US–EU trade negotiations adds to the positive mood and boosts riskier assets like the CAD. Meanwhile, investors will closely monitor trade agreements between the US and Canada. Canadian Prime Minister Mark Carney said earlier this week that the country "will not accept a bad deal" with the US, as a deadline of 1 August looms before US President Donald Trump begins to impose new tariffs. 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.Traders will keep an eye on the Canadian Retail Sales data for May, due later on Thursday, which is expected to decline 1.1%. Still, analysts expect the Bank of Canada (BoC) to keep its benchmark interest rate unchanged at 2.75% next week, following recent data that showed underlying inflation remaining well above target. Canadian Dollar FAQs What key factors drive the Canadian Dollar? 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. How do the decisions of the Bank of Canada impact 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. How does the price of Oil impact the Canadian Dollar? 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. How does inflation data impact the value of the Canadian Dollar? 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. How does economic data influence the value of 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.

South Korea Gross Domestic Product Growth (QoQ) came in at 0.6%, above forecasts (0.5%) in 2Q

South Korea Gross Domestic Product Growth (YoY) registered at 0.5% above expectations (0.4%) in 2Q

Australia S&P Global Manufacturing PMI rose from previous 50.6 to 51.6 in July

Australia S&P Global Composite PMI increased to 53.6 in July from previous 51.6

Australia S&P Global Services PMI rose from previous 51.8 to 53.8 in July

The EUR/USD advanced during the North American session, up 0.16%, as rumors had grown that the United States and the European Union (EU) are about to sign a deal, similar to the one inked between Washington and Tokyo on Tuesday.

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At the time of writing, the pair traded above 1.1770, having reached a daily low of 1.1710.Trade news in the US is grabbing the headlines, keeping investors on their toes as mood fluctuates between risk-on/off. The trade deal between Japan and the US, under which Japan pays 15% tariffs on imports to the US, triggered the first leg down for EUR/USD.Nevertheless, an article in the Financial Times stating that the EU is close to sealing a deal with Washington, with some similarities to the one signed by Tokyo, sparked a U-turn, with the EUR/USD extending its gains past 1.1750.Regarding this, the US trade advisor Peter Navarro said that leaks about an agreement should be taken “with a grain of salt,” adding that the US does not negotiate in public.On the data front, US housing prices reached their highest level for June since 1999, with a 2% increase from the same period a year earlier. Existing Home Sales plunged -2.7% MoM to 3.93 million in June from 4.04 million a month ago.The EU economic docket revealed that Consumer Confidence improved to -14.5 from -14.7, though it remains well below its long-term average, according to the European Commission.Eyes turn to the European Central Bank's (ECB) monetary policy decision on July 24.Daily digest market movers: EUR/USD jumped as a trade deal between the EU-US loomsThe US Dollar Index (DXY), which tracks the buck's value against a basket of six currencies, drops 0.20% to 97.20, boosting the Euro’s advance against the former.The EUR/USD extended its rally to four straight days, yet it remains shy of testing 1.1800. However, the FT’s article improved investors' risk appetite due to the significant reduction in EU tariffs from 30% effective on August 1 to 15%, as revealed by people familiar with the trade talks between Washington and Brussels.The FT mentioned that “Both sides would waive tariffs on some products, including aircraft, spirits and medical devices, the people said.”Despite this, EU member states are set to vote on EUR 93 billion of counter-tariffs on US goods on Thursday, and a broad majority of EU members would support using the anti-coercion instrument in the event of no US trade deal and US tariffs of 30%.US Treasury Secretary Scott Bessent said that the White House is more concerned with the quality of the deals than their timing. When asked about extending the deadline, he said it would be up to Donald Trump to decide.Traders are eyeing the European Central Bank (ECB) monetary policy decision on July 24. The odds of the ECB keeping rates unchanged are 60%, with a modest chance of a 0.25 percentage point cut at 40%. Compared to yesterday, the odds of a cut increased from 37.5%.Technical outlook: EUR/USD poised to test 1.1800 and the yearly peak in the near-termThe EUR/USD is upwardly biased after clearing the July 22 high of 1.1760, opening the door to test 1.1800. A breach of the figure will expose the year-to-date (YTD) high of 1.1830, followed by 1.1850. Overhead lies 1.1900.On the other hand, if EUR/USD drops below 1.1750, the 20-day Simple Moving Average (SMA) could act as a magnet at 1.1714, before the pair slides toward 1.1700 and below. The next area of demand would be the 50-day SMA at 1.1544. Euro FAQs What is the Euro? 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%). What is the ECB and how does it impact the Euro? 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. How does inflation data impact the value of the Euro? 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. How does economic data influence the value of the Euro? 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. How does the Trade Balance impact the Euro? 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.

South Korea BOK Manufacturing BSI fell from previous 70 to 68 in August

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