The offshore yuan weakened to around 6.78 per dollar on Friday, putting the currency on track for a weekly loss as a resilient US dollar capitalized on intensifying rate-hike bets. While the Federal Reserve recently left interest rates unchanged as widely anticipated, roughly half of the FOMC policymakers now project at least one additional rate hike by the end of 2026. On the domestic front, traders are closely watching next week’s fixing of the one- and five-year Loan Prime Rates (LPR). The upcoming policy decision carries extra weight following a string of recent data underscoring China’s uneven economic growth. Meanwhile, Hong Kong is set to debut its highly anticipated offshore yuan bond futures this August. The milestone launch represents a strategic push by Beijing to cement the city’s status as a premier global offshore yuan hub while accelerating the broader internationalization of the currency.
Rupee Rises to 6-Week High
The Indian rupee hovered around 94.2 per dollar, extending gains to a six-week high as improving capital flows lifted investor sentiment. Market participants reported an improvement in foreign-exchange flows, with increased investment into Indian bonds and a slowdown in foreign equity outflows helping strengthen demand for the local currency. This marks a shift from the one-sided dollar demand that had pressured the rupee in recent weeks. The decline in crude oil prices following easing geopolitical tensions has reduced pressure on India’s import bill. Interbank market sentiment has also improved, with traders becoming more willing to take positions on both sides of the market rather than consistently buying dollars on dips, reflecting increased confidence in the rupee. However, the rupee’s gains remain challenged by a stronger dollar, with expectations of tighter Federal Reserve policy boosting demand for the greenback amid persistent inflation concerns.
Canadian Dollar dips as Fed hawkish outlook, weaker Oil pressure CAD
- USD/CAD rises 0.21% on Thursday and trades around 1.4130 at the time of writing.
- The US Dollar remains supported after a hawkish Fed meeting, despite the preliminary US-Iran agreement.
- Lower Oil prices emphasise downside pressure on the Canadian Dollar.
USD/CAD trades around 1.4130 on Thursday, up 0.21% on the day, as the US Dollar (USD) maintains a positive tone following the Federal Reserve’s (Fed) monetary policy decision. The pair continues to hold above the 1.4100 level, supported by a reassessment of US interest rate expectations.
The Fed left its benchmark interest rate unchanged within the 3.5%-3.75% range, in line with market expectations. However, updated economic projections showed that roughly half of Federal Open Market Committee (FOMC) members expect at least one additional rate hike this year. During his first press conference as head of the central bank, Fed Chair Kevin Warsh reaffirmed his commitment to restoring price stability, highlighting the resilience of the labor market and persistent underlying inflation pressures.
This more restrictive policy outlook continues to support the Greenback, even as safe-haven demand eases following the announcement of a preliminary memorandum of understanding between the United States (US) and Iran aimed at ending hostilities in the Middle East. According to Rabobank, improving geopolitical prospects and a potential full reopening of the Strait of Hormuz could reduce demand for safe-haven assets, but the impact of the Fed’s hawkish shift is currently outweighing those factors for the US Dollar.
On the Canadian side, the Canadian Dollar (CAD) is weighed down by lower Oil prices. West Texas Intermediate (WTI) is hovering below $75 per barrel, down more than 0.90% on Thursday at the time of press. This factor is generally negative for the commodity-linked currency, given the importance of energy exports to the Canadian economy.
At the same time, investors remain focused on the global growth outlook and the potential consequences of higher US interest rates. A further rise in US Treasury yields could continue to favor the US Dollar against the Canadian Dollar, even as overall market sentiment improves.
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.33% | 0.47% | 0.16% | 0.16% | 0.11% | 0.13% | 0.56% | |
| EUR | -0.33% | 0.16% | -0.15% | -0.17% | -0.23% | -0.25% | 0.22% | |
| GBP | -0.47% | -0.16% | -0.32% | -0.33% | -0.37% | -0.39% | 0.05% | |
| JPY | -0.16% | 0.15% | 0.32% | 0.02% | -0.06% | -0.08% | 0.38% | |
| CAD | -0.16% | 0.17% | 0.33% | -0.02% | -0.08% | -0.09% | 0.37% | |
| AUD | -0.11% | 0.23% | 0.37% | 0.06% | 0.08% | -0.02% | 0.44% | |
| NZD | -0.13% | 0.25% | 0.39% | 0.08% | 0.09% | 0.02% | 0.47% | |
| CHF | -0.56% | -0.22% | -0.05% | -0.38% | -0.37% | -0.44% | -0.47% |
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 Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
Swiss franc weakens after SNB keeps rates unchanged
The Swiss National Bank (SNB) decided to keep its main interest rate unchanged during its June meeting. The interest rate has remained unchanged exactly since June last year. It is worth emphasizing that interest rate decisions in Switzerland are made quarterly. The interest rate remains at 0% and currently, due to slightly elevated inflation, we should not expect any pressure for cuts, but at the same time, it is still far from the upper limit of the inflation target.
Despite the fact that the war in Iran caused a temporary increase in imported energy prices and pushed the May inflation reading to 0.6%, the Swiss CPI index still sits comfortably in the lower range of the 0-2% inflation target. Switzerland shows significantly less dependence on energy commodities from the Middle East thanks to developed hydropower and nuclear energy, which protects the local economy from global price shocks more strongly than the Eurozone. The main focus for policymakers remains the exchange rate of the Swiss franc and the risk of its excessive appreciation in the face of geopolitical uncertainty.
Macroeconomic forecasts The SNB made a slight upward revision to its inflation forecasts in the short and medium term:
- Inflation: The Bank now forecasts average inflation at 0.6% in 2026 (up from 0.5% in the March forecast) and 0.6% in 2027 (also up from 0.5%). In 2028, inflation is expected to be 0.7% (compared to 0.6% previously), and a reading of 0.8% is expected in the first quarter of 2029.
- GDP Growth: Economic forecasts remained unchanged. The SNB expects the Swiss economy to grow by about 1.0% in 2026 and 1.5% in 2027.
Statements from bankers at the SNB conference
Key members of the SNB Governing Board sent clear signals during today’s conference:
- Martin Schlegel (Chairman of the SNB):”If necessary, we show an increased readiness to intervene in the foreign exchange market. In this way, we counteract a rapid and excessive strengthening of the Swiss franc, which would threaten price stability in Switzerland”.”Inflation has risen in recent months as a result of higher energy prices. However, medium-term inflationary pressure is virtually unchanged compared to the last monetary policy assessment”.”Everything between 0 and 2% is fine regarding inflation” and “no preference as to where in the range inflation is located”.He also indicated that monetary conditions are weaker than in March, and the bank does not currently see second-round effects in Switzerland.
- “If necessary, we show an increased readiness to intervene in the foreign exchange market. In this way, we counteract a rapid and excessive strengthening of the Swiss franc, which would threaten price stability in Switzerland”.
- “Inflation has risen in recent months as a result of higher energy prices. However, medium-term inflationary pressure is virtually unchanged compared to the last monetary policy assessment”.
- “Everything between 0 and 2% is fine regarding inflation” and “no preference as to where in the range inflation is located”.
- He also indicated that monetary conditions are weaker than in March, and the bank does not currently see second-round effects in Switzerland.
- Antoine Martin (Member of the SNB Governing Board):He pointed out that the situation in the Middle East remains fragile, adding that global inflation should be expected to remain at an elevated level.
- He pointed out that the situation in the Middle East remains fragile, adding that global inflation should be expected to remain at an elevated level.
- Attilio Tschudin (Member of the SNB Governing Board):He noted that domestic indicators show a solid economic recovery, but the main risk for Swiss prospects is the condition of the global economy.
- He noted that domestic indicators show a solid economic recovery, but the main risk for Swiss prospects is the condition of the global economy.
What to expect for EURCHF and USDCHF? EURCHF
Immediately after the decision was announced, the franc weakened slightly against the euro, falling by 0.2%-0.3% to a level of around 0.9215 per euro. Since the sudden strengthening of the franc at the turn of February and March (outbreak of war in Iran), clear communication from the SNB about its readiness to intervene has systematically pushed the CHF rate down. A strong supply zone for the pair is around 0.9220 to 0.9250.
USDCHF
Wednesday’s signing of a peace agreement in Versailles between the US and Iran by President Trump and the Iranian President is a strong factor mitigating tensions in energy commodity markets. This means a drop in demand for the franc as a “safe haven,” which should favor a rebound and stabilization of EURCHF and USDCHF rates. Nevertheless, due to Martin Schlegel’s declared “increased readiness to intervene” in the event of any turmoil, investors must take into account that the SNB is artificially limiting the franc’s potential for further strengthening. Any sudden attempts at CHF appreciation will likely be met with a decisive sell-off of the currency by the Swiss central bank, which sets a solid long-term floor for EURCHF and USDCHF quotes.
Swiss Franc strengthens ahead of SNB rate decision
- USD/CHF weakens to near 0.7985 in Thursday’s early European session.
- The Fed voted unanimously to hold its benchmark federal funds rate in a range of 3.5% to 3.75% at its June policy meeting.
- The Swiss National Bank is likely to leave its key policy rate unchanged at 0% on Thursday.
The USD/CHF pair loses momentum to around 0.7985 during the early European session on Thursday. The United States (US) and Iran signed an interim agreement that would end the Iran war, weighing on the US Dollar (USD) against the Swiss Franc (CHF). The Swiss National Bank (SNB) will announce its interest rate decision later on Thursday.
US President Donald Trump and Iran’s President Masoud Pezeshkian on Wednesday electronically signed a memorandum of understanding to end the US and Israel’s war on Iran. Pakistan’s Prime Minister Shehbaz Sharif said that the agreement is taking “immediate effect” after being signed by both Washington and Tehran.
Federal Reserve (Fed) officials left interest rates unchanged in the 3.50%-3.75% range at its June policy meeting while signaling the possibility of higher rates later this year as the central bank gauges the inflation effects of the Iran conflict.
Traders have now fully priced in a rate hike in the coming months as the US central bank focuses on price stability over employment. A hawkish tone from the Fed could support the Greenback in the near term.
The SNB is expected to keep its key policy rate at 0% at the June policy meeting on Thursday and for the rest of the year, according to all the economists who responded to a Reuters poll.
“With those opposing forces from FX and energy prices at play and Switzerland’s low inflation starting point, we think inflation pressures weigh less on the SNB than on most central banks … Our base case remains the zero‑interest‑rate policy stays in place until end-2027,” said Chiara Angeloni, Europe economist at Bank of America.
EUR/USD Price Forecast: Recovers further from March low, climbs to 1.1525 on weaker USD
- EUR/USD gains positive traction as the USD drifts lower in reaction to the US-Iran peace deal.
- The ECB’s rate hike signal supports the Euro, while hawkish Fed bets should limit USD losses.
- The bearish technical setup warrants caution before positioning for any further appreciation.
The EUR/USD pair attracts some buyers during the Asian session on Thursday and moves away from its lowest level since late March, around the 1.1480-1.1475 region touched the previous day. The intraday move up is sponsored by a broadly weaker US Dollar (USD) and lifts spot prices to a fresh daily high, around the 1.1525 area in the last hour.
The US-Iran deal, aimed at ending hostilities and reopening the Strait of Hormuz, boosts investors’ confidence and prompts some USD profit-taking following Wednesday’s strong move up to a fresh high since late March. Furthermore, the European Central Bank’s (ECB) hawkish signal lends some support to the shared currency and the EUR/USD pair. However, rising bets for a rate hike by the US Federal Reserve (Fed) in December could limit USD losses and cap the currency pair.
From a technical perspective, spot prices hold well below the 200-period Simple Moving Average (SMA) on the 4-hour chart and keep a bearish near-term tone. Adding to this, the Moving Average Convergence Divergence (MACD) indicator is in negative territory, while the Relative Strength Index (RSI) hovers around 38. Momentum indicators together suggest that downside pressure persists even as the EUR/USD pair attempts to stabilize above the recent swing lows.
Hence, any subsequent move up is more likely to confront a hurdle near the 1.1575-1.1580 horizontal support breakpoint ahead of the 1.1600 round figure. Meanwhile, the 200-period SMA at 1.1638 should act as a strong barrier that bulls would need to reclaim to ease the current bearish bias and open the door to a more sustained recovery. On the downside, acceptance below the 1.1500 mark would expose the EUR/USD pair to further weakness as momentum remains skewed to the downside.
EUR/USD 4-hour chart
Japanese Yen bears turn cautious amid intervention fears as Iran deal undermines USD
- USD/JPY bulls pause as intervention fears support the JPY amid a modest USD downtick.
- The US-Iran peace deal optimism counters the Fed’s hawkish tilt and weighs on the USD.
- The US-Japan rate differential should cap the JPY and help limit the downside for the pair.
The USD/JPY pair holds steady above mid-160.00s during the Asian session on Thursday, consolidating its gains registered over the past four days to the highest level since July 2024. The US Dollar (USD) pulls back following Wednesday’s hawkish Federal Reserve (Fed)-inspired rally to a fresh high since late March amid the latest optimism over a US-Iran peace deal. Adding to this, intervention fears offer some support to the Japanese Yen (JPY) and contribute to capping the currency pair.
US President Donald Trump and Iranian President Masoud Pezeshkian electronically signed a Memorandum of Understanding (MoU) aimed at ending hostilities between the two countries and reopening the Strait of Hormuz. Furthermore, Trump said that the 60-day negotiation period to reach a final agreement on Iran’s nuclear program is not a hard deadline, boosting investors’ confidence. This, in turn, prompts some USD profit-taking and turns out to be a key factor acting as a headwind for the USD/JPY pair.
Meanwhile, traders remain on high alert amid speculations that Japanese authorities will step in again to prop up the domestic currency. In fact, Japan’s top foreign exchange diplomat, Atsushi Mimura, and Finance Minister Satsuki Katayama have issued repeated warnings that Tokyo is monitoring speculative moves and remains fully prepared to curb further JPY weakness. This, along with the Bank of Japan’s (BoJ) historic rate hike to the highest since 1995, limits further JPY losses and caps the USD/JPY pair.
That said, Japan’s borrowing costs remain lower than those of peer nations, including the US. In fact, the Federal Reserve (Fed) signaled the possibility of at least one rate hike this year after leaving its benchmark overnight borrowing rate anchored in the 3.5%-3.75% range on Wednesday. The persistently wide interest rate differential with the US keeps the JPY carry trade active, suggesting that the path of least resistance for the USD/JPY pair remains to the upside, and any corrective pullback should be bought into.
Japanese Yen Price Last 30 days
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies last 30 days. Japanese Yen was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.21% | 0.91% | 1.16% | 2.66% | 1.98% | 1.53% | 1.81% | |
| EUR | -1.21% | -0.28% | -0.04% | 1.44% | 0.79% | 0.30% | 0.61% | |
| GBP | -0.91% | 0.28% | 0.26% | 1.73% | 1.05% | 0.60% | 0.89% | |
| JPY | -1.16% | 0.04% | -0.26% | 1.48% | 0.74% | 0.34% | 0.60% | |
| CAD | -2.66% | -1.44% | -1.73% | -1.48% | -0.64% | -1.12% | -0.82% | |
| AUD | -1.98% | -0.79% | -1.05% | -0.74% | 0.64% | -0.46% | -0.16% | |
| NZD | -1.53% | -0.30% | -0.60% | -0.34% | 1.12% | 0.46% | 0.28% | |
| CHF | -1.81% | -0.61% | -0.89% | -0.60% | 0.82% | 0.16% | -0.28% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
United States Dollar Index holds losses after pulling back from 11-week highs
- US Dollar Index remains subdued after pulling back from an 11-week high of 100.57 reached on Wednesday.
- The Greenback slips as easing safe-haven demand followed a preliminary US-Iran memorandum of understanding to end the war.
- The US Dollar may regain as half of the FOMC members expect at least one rate hike this year.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, pulled back after reaching an 11-week high of 100.57 in the previous day and is now trading around 100.30 during the Asian hours on Thursday.
The Greenback slips on easing safe-haven demand following the BBC report late Wednesday, indicating that the White House confirmed that US President Donald Trump and Iranian President Masoud Pezeshkian signed a preliminary memorandum of understanding designed to end the US-Israel war on Iran. This decisive executive action follows the electronic signing of the initial framework by U.S. Vice President JD Vance and Iranian Parliamentary Speaker Mohammad Bagher Ghalibaf earlier in the week.
However, the US Dollar could rebound on rising odds of rate hikes by the Federal Reserve (Fed) later this year. The Fed’s June Summary of Economic Projections showed half of FOMC members expect at least one rate hike this year. Despite economic disruptions linked to the conflict in Iran, resilient labor market data and persistent underlying inflation measures continue to drive tightening pressures.
The Federal Open Market Committee (FOMC) voted unanimously to maintain its benchmark federal funds rate in the range of 3.5% to 3.75%. In his first meeting since taking the helm of the US central bank, the newly appointed Federal Reserve Chairman, Kevin Warsh, vowed to aggressively restore price stability.
