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Swiss Franc gains ground ahead of Trade Balance data

  • USD/CHF slips as SNB Minutes showed cautious policymakers, boosting safe-haven Swiss Franc demand.
  • The US Dollar falls despite escalating hostilities between Washington and Tehran, as traders focus on softer domestic economic data instead.
  • CME FedWatch Tool indicates that markets price in a 61.4% probability of a rate hike in September.

USD/CHF extends its gains for the second successive day, trading around 0.8070 during the Asian hours on Monday. The pair depreciates as the Swiss Franc (CHF) receives support ahead of the release of Trade Balance data for June.

While the Swiss National Bank (SNB) maintains that its medium-term inflation outlook remains largely unchanged, recent Meeting Minutes show that policymakers are growing cautious. Rising geopolitical tensions have heightened near-term inflation risks, prompting the SNB to reiterate its readiness to intervene in the foreign exchange market to prevent the franc from overappreciating and to protect price stability.

The USD/CHF pair depreciates as the US Dollar (USD) declines despite escalating hostilities between the United States (US) and Iran. The US has launched its ninth consecutive night of strikes against Iranian targets. In response, Iranian officials declared that the ceasefire between the two nations has been effectively abandoned, opening the door for deepening disruptions to crucial energy pathways through the region’s narrow waterways.

The Greenback struggles as the Federal Reserve (Fed) is widely expected to hold interest rates steady at its upcoming meeting, though market pricing via the CME FedWatch Tool now reflects a 61.4% probability of a rate hike in September.

Hammack flags broad-based inflation pressures, reinforcing hawkish Fed tone

Fed’s Hammack delivers a more hawkish-than-usual message, with a 7.2/10 FXS Speechtracker score standing above the 6.6/10 historical average and emphasizing that persistently high inflation is the “bigger concern.” The focus on businesses calling for action to curb inflation and consumers “who can’t make ends meet” underscores mounting political and social pressure for tighter policy, even as Hammack acknowledges solid growth and stable consumer spending. References to energy, supply chains, insurance, and AI data center investment as drivers of broad-based price pressures point to a Fed bias toward keeping policy restrictive for longer, which is supportive for the Dollar on balance.

The FXS Fed Sentiment Index has risen by 2.06 points to 128.64, signaling a clear move deeper into hawkish territory well above the neutral 100 line. In combination with the elevated FXS Speechtracker score, this suggests that Fed communication today tilts toward sustained vigilance on inflation, limiting near-term prospects for aggressive rate cuts and underpinning the Dollar against peers.

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AUD/USD Recovers to near 0.7000 amid US Dollar’s weakness

  • AUD/USD rises to near 0.6995 after a weak opening.
  • The Fed is highly anticipated to leave interest rates unchanged in the policy meeting later this month.
  • Soft US CPI data for June forced traders to pare hawkish Fed bets.

The Australian Dollar (AUD) trades 0.12% higher to near 0.6995 against the US Dollar (USD) during the Asian trading session on Monday. The AUD/USD pair bounces back after a weak opening, as the US Dollar faces selling pressure amid intensified expectations that the Federal Reserve (Fed) will not hike interest rates in the policy meeting later this month.

At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades marginally lower around 100.70. The USD Index fell sharply after a strong opening move.

According to the CME FedWatch tool, the odds of the Fed leaving interest rates unchanged in the July meeting are 85.6%, up from 65.8% recorded last week. Market participants turned confident that the Fed will maintain the status quo in the July meeting after the release of the United States (US) Consumer Price Index (CPI) data for June, which showed that inflationary pressures cooled down.

On the Australian Dollar front, the currency outperforms its major peers, following the People’s Bank of China’s (PBOC) monetary policy announcement, in which it left Prime Lending Rates (PLRs) unchanged.

AUD/USD technical analysis

AUD/USD trades higher at around 0.6990 at press time, holding a modestly bullish near-term bias as it extends above the 20-day exponential moving average (EMA) at 0.6970. The pair has reclaimed this short-term trend indicator after its late-June weakness, while the Relative Strength Index (14) at 51.8 sits just above the neutral line, suggesting stabilizing upside momentum rather than aggressive buying pressure.

On the downside, immediate support is located at the 20-day EMA near 0.6970, which is likely to act as the first line of defence on any pullback, followed by the recent price troughs below 0.6950 if sellers regain control. Below 0.6950, the March 30 low at 0.6874 will be the key support level. As long as spot holds above the 0.6970 region on a daily closing basis, the technical tone should remain mildly constructive. Looking up, the pair could extend its advance towards 0.7100 if it manages to break above the July 15 high at 0.7021.

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EUR/JPY Price Holds above nine-day EMA support at 185.50

  • EUR/JPY may find immediate resistance at the ascending triangle top near 186.10.
  • The 14-day Relative Strength Index of 55.33 signals healthy bullish momentum that is not yet overextended.
  • The initial support lies at the nine-day EMA at 185.50.

EUR/JPY remains subdued for the third consecutive day, trading around 185.80 during the Asian hours on Monday. The currency cross is holding a constructive bullish bias as it stays above both the nine-day and 50-day Exponential Moving Averages (EMAs), now aligned as nearby dynamic support.

The 14-day Relative Strength Index (RSI) at 55.33 leans to the upside without signalling overbought conditions, suggesting bullish momentum is present but not yet overstretched while price consolidates just under the recent highs.

The daily chart technical analysis shows the EUR/JPY cross is remaining within the ascending triangle, at the top near 186.10. This flat ceiling, combined with shallower dips, signals aggressive buying pressure. A decisive break above the triangle could trigger a powerful bullish continuation, which could expose the all-time high of 187.95, which was recorded on April 17.

On the downside, primary support lies at the nine-day EMA at 185.50, followed by the 50-day EMA at 185.12 and the ascending triangle’s lower boundary around 185.00. A break below the triangle would weaken the bullish bias and put downward pressure on the EUR/JPY cross to navigate the region around the five-month low of 181.87, recorded on March 16, and the seven-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 weakest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.01%-0.07%-0.02%-0.09%-0.15%-0.24%0.02%
EUR0.01%-0.02%0.00%-0.08%-0.13%-0.25%0.03%
GBP0.07%0.02%0.02%-0.06%-0.11%-0.21%0.04%
JPY0.02%0.00%-0.02%-0.06%-0.13%-0.19%0.03%
CAD0.09%0.08%0.06%0.06%-0.06%-0.12%0.09%
AUD0.15%0.13%0.11%0.13%0.06%-0.08%0.18%
NZD0.24%0.25%0.21%0.19%0.12%0.08%0.22%
CHF-0.02%-0.03%-0.04%-0.03%-0.09%-0.18%-0.22%

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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Offshore Yuan Hovers Near 1-Week Low

The offshore yuan hovered around 6.77 per dollar on Monday, remaining near a one-week low as investors weighed escalating tensions in the Middle East and the People’s Bank of China’s decision to leave key lending rates unchanged. Sentiment remained fragile after the US launched fresh airstrikes against Iran over the weekend, while Tehran declared its ceasefire with Washington no longer in effect. On the monetary policy front, the People’s Bank of China left its key lending rates unchanged at record lows for a 14th consecutive month in July, with the one-year loan prime rate (LPR) held at 3.0% and the five-year LPR at 3.5%. The decision came despite softer-than-expected second-quarter economic data that underscored the uneven nature of China’s recovery, as robust manufacturing output and exports continued to provide support while sluggish consumer spending weighed on growth. Attention is now focused on the upcoming Politburo meeting later this month for signals on stimulus measures.

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New Zealand Dollar Remains Firm

The New Zealand dollar remained at a six-week high, hovering around $0.584, as the prospect of additional rate hikes at home helped offset a broader risk-off move amid escalating US-Iran tensions. The Reserve Bank of New Zealand is widely expected to raise interest rates again in September, with the OCR projected to reach at least 3.0% by the end of the year. Earlier this week, RBNZ Chief Economist Paul Conway warned that renewed hostilities in the Middle East could reignite inflationary pressures, potentially prompting the central bank to tighten policy further after last week’s first hike in more than three years. Meanwhile, the US dollar rebounded from a near one-month low after the latest data pointed to continued resilience in the US economy, capping further gains in the kiwi. For the week, the currency rose more than 1%, marking its third straight week of gains.

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Korean Won Pauses Gains on Oil Rally

The South Korean won hovered around 1,480 per dollar, pausing recent gains after climbing to its strongest level since mid-May, as escalating US-Iran tensions fueled a rally in oil prices and dampened risk sentiment. Brent crude rose above $85 per barrel, heading for its biggest weekly gain since April after renewed US strikes on Iran and attacks near the country’s main oil export terminal heightened concerns over supply disruptions. Earlier this week, the central bank lifted its benchmark interest rate by 25 basis points to 2.75%, as widely expected, marking its first increase since early 2023 as policymakers sought to curb persistent inflation and support the currency following months of depreciation. The move signaled the start of a new tightening cycle, though the currency’s gains were capped by cautious market sentiment amid renewed volatility in technology shares and rising geopolitical tensions.

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GBP weakens below 1.3500 as US launches new wave of strikes against Iran

  • GBP/USD softens to near 1.3470 in Friday’s Asian session.
  • The US launched a new wave of strikes against Iran for a sixth day in a row.
  • Traders still ramp up their bets on BoE rate hikes this year.

The GBP/USD pair trades on a softer note around 1.3470 during the Asian trading hours on Friday. Geopolitical tensions in the Middle East trigger risk-off market sentiment and weigh on the Cable. The preliminary reading of the Michigan Consumer Sentiment Index for July is due later on Friday.

The United States (US) has carried out major strikes on Iran for the sixth day in a row. Officials in southern Iran’s Bandar Abbas reported that civilian infrastructure, including power facilities and a train station, has been hit.

The US Central Command (CENTCOM) said that the attacks were intended to “further degrade Iranian military capabilities” before saying it had boarded a vessel as part of its blockade of the strait. Earlier this week, US President Donald Trump threatened to strike Iran’s bridges and power plants if the country did not return to talks. Rising tensions in the Middle East could boost a safe-haven currency such as the US Dollar (USD) against the British Pound (GBP). 

Data released on Tuesday showed that US Consumer Price Index (CPI) inflation slowed in June, while data from Wednesday showed a decline in the Producer Price ‌Index (PPI). Traders are now pricing ‌in nearly a 55% chance that the Federal Reserve (Fed) will hike rates in September, according to the CME FedWatch Tool.

On the UK front, Bank of England (BoE) Governor Andrew Bailey said on Tuesday that he was concerned about the resumption of hostilities between the US ‌and Iran in recent days, but so far, there has been no big impact on the UK inflation outlook. Money markets are fully pricing in a BoE hike by the November policy meeting, with a second rate hike priced in by April 2027, according to Reuters.

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AUD moves away from three-week top as geopolitics and Fed hike bets lift USD

  • AUD/USD attracts some sellers for the second straight day amid a modest USD uptick.
  • Escalating US-Iran tensions, reviving inflation fears, and Fed hike bets underpin the buck.
  • The RBA’s relatively hawkish stance and steady data from China could support the AUD.

The AUD/USD pair remains on the back foot for the second straight day and slides to the 0.7980 region during the Asian session on Friday. Nevertheless, spot prices seem poised to register gains for the third week in a row and remain within striking distance of a nearly three-week high, touched on Wednesday.

The US Dollar (USD) looks to build on the previous day’s goodish recovery from a nearly one-month low amid a combination of supporting factors and exerts some downward pressure on the AUD/USD pair. Further escalation of tensions between the US and Iran keeps geopolitical risk in play. Furthermore, concerns about energy-driven inflation revive bets for a US Federal Reserve (Fed) rate hike in 2026 and underpin the safe-haven Greenback.

In the latest developments surrounding the Middle East crisis, the US stepped up its attacks on Thursday and carried out a sixth consecutive night of air strikes against Iran. The US also struck an empty oil tanker headed for Kharg Island as part of its renewed naval blockade of Iranian ports. Tehran responded by attacking US military facilities across the region, raising fears of a return to all-out war and triggering the global flight to safety.

Iran’s Islamic Revolutionary Guard Corps had threatened to expand the conflict by targeting additional regional energy supply routes. Furthermore, Reuters reported that Iran has asked Yemen’s Houthis to stand ready to close the Red Sea oil route, posing a potent new threat to global energy supplies. This remains supportive of elevated crude oil prices, fueling inflation fears and bolstering bets for at least one Fed rate hike by the year-end.

Market expectations were reaffirmed by Thursday’s upbeat US Initial Jobless Claims data and the Philly Fed Manufacturing Index. Adding to this, Dallas Fed President Lorie Logan called on Thursday for modestly higher interest rates to win a battle the central bank has been losing for the past five years. Separately, Fed Vice Chair Philip Jefferson said that he would be open to raising rates if inflation does not show near-term improvement.

The aforementioned fundamental backdrop favors the USD bulls and backs the case for a further depreciating move for the AUD/USD pair. However, the Reserve Bank of Australia’s (RBA) relatively hawkish stance, along with steady economic data from China, could lend support to the China-proxy Australian Dollar (AUD), warranting caution before placing aggressive bearish bets on the currency pair and positioning for deeper losses.

US Dollar Price Today

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

USDEURGBPJPYCADAUDNZDCHF
USD0.00%0.07%0.03%-0.04%0.17%0.09%0.00%
EUR-0.01%0.07%0.00%-0.07%0.17%0.09%-0.01%
GBP-0.07%-0.07%-0.09%-0.14%0.09%0.03%-0.08%
JPY-0.03%0.00%0.09%-0.06%0.16%0.06%-0.01%
CAD0.04%0.07%0.14%0.06%0.22%0.14%0.04%
AUD-0.17%-0.17%-0.09%-0.16%-0.22%-0.09%-0.18%
NZD-0.09%-0.09%-0.03%-0.06%-0.14%0.09%-0.09%
CHF-0.00%0.01%0.08%0.01%-0.04%0.18%0.09%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).