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Canadian Dollar weakens as geopolitical uncertainty lifts US Dollar

  • USD/CAD rises as safe-haven demand boosted the US Dollar amid uncertainty surrounding the US-Iran peace talks in Doha.
  • US envoys arrived in Qatar for Iran peace talks, but Tehran refused direct meetings, clouding prospects for a deal.
  • The commodity-linked CAD struggles as Crude oil prices decline on easing supply concerns.

USD/CAD has recovered its recent losses from the previous day, trading around 1.4220 during the Asian hours on Wednesday. The pair appreciates as the US Dollar (USD) gains ground on safe-haven demand amid uncertainty over United States (US)-Iran Doha talks.

US negotiators Jared Kushner and Steve Witkoff arrived in Qatar on Tuesday to meet with mediators regarding the implementation of an initial peace deal to end the conflict with Iran. However, Tehran stated it would not meet directly with the US envoys, clouding prospects for a lasting resolution and keeping geopolitical risk premiums alive in the market.

The Greenback received a boost from rising hawkish sentiment surrounding the Federal Reserve’s policy outlook. At its June meeting, the Fed held its benchmark interest rate steady at a target range of 3.50% to 3.75% while notably removing language that hinted at future rate cuts. According to the CME FedWatch tool, Fed funds futures are now pricing in a nearly 63% chance of an interest rate hike by September.

The USD/CAD pair also rises as the commodity-linked Canadian Dollar (CAD) faces challenges due to lower oil prices. Crude oil prices decline as traders weigh in on potential peace talks in Doha between the US and Iran.

Both nations are working toward a lasting resolution to ease tensions in the Strait of Hormuz following recent military clashes. However, Tehran maintains its firm stance on controlling maritime traffic through the strategic waterway; both sides have halted their exchange of fire, allowing oil tanker traffic and shipments to steadily recover.

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EUR/JPY Price – Eyes 186.00 amid constructive bullish bias

  • EUR/JPY could test the upper boundary of a symmetrical triangle around 186.00.
  • The 14-day Relative Strength Index at 57 indicates firm bullish momentum, leaving plenty of room for further gains.
  • Initial support sits at VWAP and clustered EMAs just below 185.50, providing a solid floor for buyers.

EUR/JPY moves little after four days of gains, trading around 185.70 during the Asian hours on Monday. The currency cross is maintaining a constructive bullish bias as it holds above the session Volume-Weighted Average Price (VWAP) at 185.29 and both the nine-period and 50-period Exponential Moving Averages (EMAs) around 184.95–184.99. This positioning suggests dip-buying interest remains in place.

Meanwhile, the 14-day Relative Strength Index (RSI) near 57.0 points to firm but not overextended upside momentum, leaving room for further gains as long as price stays supported above these nearby averages.

The technical analysis of the daily chart suggests that the EUR/JPY cross is positioned near the upper boundary of a symmetrical triangle around 186.00, indicating that the asset is gearing up for a potential breakout. Further advances above the triangle would strengthen the bullish bias and support the currency cross to test the all-time high of 187.95, which was recorded on April 17.

On the downside, initial support aligns first with the VWAP and clustered EMAs just below 185.50. A break below this confluence support zone would expose the symmetrical triangle’s lower boundary around 183.50, followed by the four-month low of 181.87, recorded on March 16, and the six-month low of 180.81.

Chart Analysis EUR/JPY
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 strongest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD0.16%0.21%0.16%0.16%0.42%0.19%0.13%
EUR-0.16%0.04%-0.02%-0.00%0.27%0.00%-0.04%
GBP-0.21%-0.04%-0.04%-0.03%0.21%-0.05%-0.06%
JPY-0.16%0.02%0.04%-0.02%0.27%-0.01%-0.04%
CAD-0.16%0.00%0.03%0.02%0.28%-0.00%-0.02%
AUD-0.42%-0.27%-0.21%-0.27%-0.28%-0.27%-0.29%
NZD-0.19%-0.01%0.05%0.00%0.00%0.27%-0.02%
CHF-0.13%0.04%0.06%0.04%0.02%0.29%0.02%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the 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).

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AUD/JPY Price – Softens below 112.50, bias turns mildly bearish

  • AUD/JPY softens to near 112.20 in Wednesday’s early European session.
  • The cross maintains a mildly bearish bias in the near term, with soft RSI momentum.
  • The first upside barrier emerges at 112.32; the initial support level is located at 111.25.

The AUD/JPY cross trades in negative territory around 112.20 during the early European trading hours on Tuesday. The Japanese Yen (JPY) strengthens against the Australian Dollar (AUD) as traders are on alert for possible intervention from Japanese authorities.

Japan’s Finance Minister Satsuki Katayama said on Tuesday that the government was ready to take appropriate action against excessive currency moves. Additionally, Chief Cabinet Secretary Minoru Kihara stated that the government will work to build an economy less vulnerable to foreign-exchange volatility while remaining prepared to intervene in currency markets if necessary.

On the other hand, a hawkish tone from the Reserve Bank of Australia (RBA) might help limit the Aussie’s losses. According to the RBA Minutes from its June meeting, monetary policy needed to remain restrictive to remove excess demand in the economy. Markets were pricing only about 10 basis points (bps) of additional tightening by year-end, while pricing about 17 bps of easing by 2027, per Reuters.

Chart Analysis AUD/JPY

Technical Analysis:

In the daily chart, AUD/JPY keeps a mildly bearish near-term tone as it slips just under the 100-day Simple Moving Average (SMA) and the Bollinger Bands midline. Price holding below these clustered moving-average resistances suggests rallies are likely to meet supply overhead, while the Relative Strength Index (RSI) around 44 points to soft but not extreme downside momentum.

On the topside, initial resistance is seen at the 100-day SMA at 112.32, with the Bollinger midline around 112.62 acting as the next cap, ahead of the upper Bollinger band near 114.01. On the downside, the first noteworthy support emerges at the lower Bollinger band around 111.25, where a break would open the door to a deeper correction within the broader range.

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GBP/USD Price – Slides below 1.3250 after failing to break through 23.6% Fibo.

  • GBP/USD attracts fresh sellers on Wednesday as traders await speeches from central bank chiefs.
  • The broader technical setup favors bearish traders and backs the case for a further depreciation.
  • A sustained strength beyond the  23.6% Fibo. level is needed to back the case for any recovery.

The GBP/USD pair meets with a fresh supply during the Asian session on Wednesday and moves away from a nearly two-week high around the 1.3275 region, touched the previous day. Spot prices currently trade around the 1.3235 zone, down 0.20% for the day, as traders look to speeches from Bank of England (BoE) Governor Andrew Bailey and Federal Reserve (Fed) Chair Kevin Warsh for a fresh impetus.

From a technical perspective, the GBP/USD pair has been struggling to make it through the 23.6% Fibonacci retracement level of the May-June downfall. This comes on top of the recent repeated failures near the 200-period Simple Moving Average (SMA) on the 4-hour chart and a breakdown below the 1.3300 mark, which, in turn, favors bearish traders. However, mixed momentum indicators warrant some caution before positioning for deeper losses.

In fact, the Relative Strength Index (RSI) is hovering near 52, while the Moving Average Convergence Divergence (MACD) is showing a fading positive bias. This, in turn, hints at limited upside while the GBP/USD pair remains capped by the clustered resistance overhead. In the meantime, the key support around 1.3139 remains the key structural floor, and a clear break below would open the door for a continuation of the broader downtrend.

On the topside, immediate resistance emerges at the 23.6% Fibo. level at 1.3260, with further barriers aligned at the 38.2% retracement around 1.3335 and the 200-period SMA at 1.3360, ahead of the 50.0% retracement near 1.3396. A sustained move beyond the said barriers would start to ease the broader bearish bias and pave the way for a more convincing recovery phase. However, a failure would leave the GBP/USD pair vulnerable to slide further.

GBP/USD 4-hour chart

Chart Analysis GBP/USD
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New Zealand Dollar Languishes Near 7-Month Low

The New Zealand dollar slipped to $0.566 on the first trading day of July, hovering near its lowest level in seven months amid a firm US dollar, while investors assessed the Reserve Bank’s interest rate outlook. Markets continue to price in a rate hike from the RBNZ next week, although analysts have become more divided on whether such a move is necessary given the recent decline in oil prices. Meanwhile, latest data showed business confidence improved in June, suggesting the economy may be holding up better than earlier feared. Although local economists still expect a contraction in the second quarter, they anticipate a recovery thereafter as fuel and other costs ease. The kiwi dropped 5.2% in June, marking its largest monthly fall since December 2024, and declined 1.2% in the second quarter.

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Indian Rupee Extends Losses

The Indian rupee hovered around 94.7 per dollar, extending its recent losses as rising US Treasury yields strengthened the greenback and weighed on Asian currencies. Higher bond yields dampened demand for emerging-market assets, while renewed dollar buying and weaker regional currencies kept pressure on the rupee. Market sentiment remained cautious after stronger-than-expected US labor market data reinforced expectations that the Federal Reserve could keep interest rates higher for longer. Investors are now awaiting additional US employment data for further clues on the Fed’s policy outlook. Meanwhile, higher oil prices added another headwind for the currency, as firmer crude prices typically increase India’s import bill and demand for dollars. Oil gained support after a Qatari official said US envoys in Doha would not hold high-level talks with Iran, casting doubt on near-term diplomatic progress and reducing expectations of a potential increase in Iranian oil supplies.

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South Korean Won Weakens Toward 17-Year Low

The South Korean won weakened to around 1,557 per dollar, approaching its weakest level since March 2009 near 1,560 touched earlier in June, as persistent foreign selling of local equities and broad demand for the US dollar weighed on the currency. Overseas investors remained net sellers of Korean stocks for an eighth consecutive session, extending a wave of capital outflows as global funds trimmed exposure to Korean technology shares. The won also came under pressure from a firmer US dollar after stronger-than-expected US labor market data pushed Treasury yields higher and reinforced expectations that the Federal Reserve could raise interest rates later this year. Meanwhile, South Korea reported record trade data for June, with exports surging 70.9% year-on-year to $102.25 billion, marking the first time monthly shipments exceeded $100 billion. The trade surplus widened to a record $36.15 billion, as semiconductor exports nearly tripled to $44.82 billion on robust AI-driven demand.

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Offshore Yuan Falls on China Growth Concerns

The offshore yuan weakened to around 6.79 per dollar on Monday, reversing gains from the previous session as renewed concerns over China’s economic outlook weighed on sentiment. A private survey showed that the Manufacturing PMI eased to a three-month low of 51.7 from 51.8 in May. The reading followed stronger-than-expected official data showing the Manufacturing PMI rising to 50.3 in June from 50.0 in May, above forecasts of 50.1. Sentiment was also weighed down by an assessment from Goldman Sachs, which noted a more cautious tone among local clients regarding China’s near-term growth outlook, alongside concerns over weak consumer confidence, persistent labor market pressures, and the prolonged property downturn. The yuan’s weakness came even as the PBOC set the daily midpoint at 6.8067 per dollar, its strongest fixing in more than three years. Meanwhile, the EU’s trade chief and China’s commerce minister began talks in Brussels aimed at easing trade tensions.