EUR/USD posts modest losses near 1.1615 in Friday’s early European session.
Mixed signals on the progress of US-Iran ceasefire talks continued to keep traders cautious.
The ECB June rate hike case is nearly sealed, but July is fully open, said Reuters.
The EUR/USD pair trades with mild losses around 1.1615 during the early European trading hours on Friday. The Euro (EUR) remains weak against the US Dollar (USD) amid mixed headlines surrounding the US-Iran peace deal. Germany’s IFO surveys and Michigan Consumer Sentiment Index report will be released later in the day.
Traders will closely monitor the progress of US-Iran ceasefire talks. Iranian officials said that the latest proposal from the US partly narrowed the gap between the warring sides, but comments from the Islamic Republic’s Supreme Leader about keeping Tehran’s uranium stockpile and a dispute over tolls in the Strait of Hormuz clouded the outlook for a breakthrough.
On Wednesday, US President Donald Trump warned that he may resume attacks soon if Iran doesn’t agree to his terms. Any signs of a prolonged conflict or escalating tensions in the Middle East could boost a safe-haven currency such as the Greenback and act as a headwind for the major pair.
The case for the European Central Bank (ECB) rate hike in June is nearly sealed, but the central bank is likely to be noncommittal about any further move, looking to temper bets for a quick follow-up step in July, according to Reuters. The ECB decided to hold the key interest rates steady in April, but it debated a hike and signalled that a move in the June policy meeting was likely given persistently high energy costs.
EUR/GBP remains subdued as the Euro falls ahead of upcoming German economic indicators.
The Euro struggles as flash PMI data showed the Euro Area economy shrinking at its fastest pace since late 2023.
The May 2026 UK GfK Consumer Confidence Index rose to -23, beating estimates of -28 as household pessimism slightly eased.
EUR/GBP extends its winning streak for the fifth consecutive day, trading around 0.8650 during the Asian hours on Friday. The currency cross remains subdued as the Euro (EUR) struggles ahead of upcoming German economic indicators, including the June GfK Consumer Confidence Survey, Q1 GDP figures, and the IFO Business Survey, due later in the day.
The Euro faced significant challenges as traders reacted to a surprising contraction in the Eurozone economy. According to the latest S&P Global flash Purchasing Managers’ Index (PMI) data released on Thursday, the Euro Area economy shrank in May at its fastest pace since late 2023. This downturn was primarily driven by a conflict-fueled surge in living costs that stifled service demand and pushed input price inflation to a three-year high.
The downside of the EUR/GBP cross is retrained as the British Pound (GBP) inches lower following the GfK Consumer Confidence Index release, which edged up to -23 in May 2026 from -25 in the previous month, which had marked the lowest reading since October 2023 amid persistent worries about the Iran war. The result defied market estimates of -28, suggesting that households were slightly less pessimistic about the outlook. GfK consumer insights director Neil Bellamy cautioned that the uptick was unlikely to mark a sustained recovery in overall sentiment.
In contrast to the slight bump in consumer confidence, actual UK business activity weakened considerably. Thursday’s S&P Global Composite PMI for May contracted to 48.5 from 52.6, falling well below the market estimate of 51.7. This sharp decline serves as a clear indication that economic activity could shrink further under the weight of the Middle East conflict.
Chris Williamson, chief business economist at S&P Global Market Intelligence, noted that the UK economy is facing a perfect storm as rising political uncertainty adds to the growing impact from the war in the Middle East.
Despite these signs of economic slowing, the Bank of England (BoE) Monetary Policy Committee member landed firmly on the tightening side of the ledger, creating an awkward policy contrast against survey data that points to a stalling economy. BoE Governor Andrew Bailey also spoke during the session, but did not do much to shift the market needle.
EUR/USD falls as a firm US Dollar gained support from rising expectations of a hawkish Federal Reserve stance.
President Trump will swear in Kevin Warsh as the US Federal Reserve chair on Friday at the White House.
The Euro fell as flash PMI data showed the Euro Area economy shrinking at its fastest pace since late 2023.
EUR/USD remains subdued for the second successive day, trading around 1.1610 during the Asian hours on Friday. The pair depreciates as the US Dollar (USD) remains firm, supported by rising odds of hawkish sentiment surrounding the Federal Reserve (Fed) policy stance.
Prolonged energy disruptions from the ongoing war threaten to feed into core US consumer prices and inflation expectations, which could potentially push the Fed to keep interest rates higher. Furthermore, a stronger US economic growth outlook is adding weight to the case for monetary tightening and boosting the Greenback.
Fed officials remain cautious as they evaluate whether to adjust short-term interest rates. While they are currently holding the federal funds rate steady, policymakers are moving away from the idea of rate cuts and are increasingly open to raising rates if inflation fails to cool down.
The administration of US President Donald Trump announced that Trump will swear in Kevin Warsh as the chair of the US Federal Reserve on Friday at the White House. The new chair succeeds Jerome Powell, whose term expired on Friday but who has continued to serve on a pro-tempore basis until the transition.
On the US data front, the Department of Labor (DOL) showed that Initial Jobless Claims fell by 3,000 to 209,000 during the second week of May, indicating continued resilience in the labor market. Meanwhile, Continuing Jobless Claims increased to 1,782,000 for the week ending May 9, up from 1,776,000 the previous week.
The Euro (EUR) struggles against the US Dollar (USD) as traders reacted to a surprising contraction in the Eurozone economy. According to the latest S&P Global flash PMI data release on Thursday, the Euro Area economy shrank in May at its fastest pace since late 2023, driven by a conflict-fueled surge in living costs that stifled service demand and pushed input price inflation to a three-year high.
Market attention now shifts to upcoming German economic indicators, including the June GfK Consumer Confidence Survey, Q1 GDP figures, and the IFO Business Survey.
GBP/USD struggles to gain any meaningful traction on Friday amid mixed fundamental cues.
UK political uncertainty counters BoE rate hike bets and keeps the GBP bulls on the defensive.
Geopolitical risks and hawkish Fed expectations underpin the USD, keeping a lid on the pair.
The GBP/USD pair is seen oscillating in a narrow trading band during the Asian session on Friday, though it remains on track to register modest weekly gains. Spot prices remain capped near the 100-day Exponential Moving Average (EMA) and currently trade around the 1.3425-1.3430 region, nearly unchanged for the day.
The British Pound (GBP) has been struggling to attract any meaningful buyers amid mixed signals over the Bank of England’s (BoE) policy outlook and the UK political uncertainty. In fact, Swati Dhingra, an external MPC member, said that the BoE might not need to raise rates if its “scenario B” – where higher energy prices have only moderate second-round effects – materialises. In contrast, fellow external member Catherine Mann warned that high inflation in late 2026 could become embedded in wage deals for 2027.
Meanwhile, BoE Governor Andrew Bailey said on Wednesday that a rise in market interest rates since the start of the Iran war has given the central bank more time to assess the economic impact of the conflict. Nevertheless, markets are still pricing in the possibility of at least one interest rate hike by the BoE in 2026. The GBP bulls, however, seem hesitant amid serious leadership challenges to UK Prime Minister Keir Starmer. This, along with a bullish US Dollar (USD), contributes to keeping a lid on the GBP/USD pair.
Despite the incoming positive headlines, investors remain skeptical about a US-Iran peace deal amid major disagreements over Tehran’s nuclear program and a standoff over the critical Strait of Hormuz. In fact, the Islamic Republic’s Supreme Leader, Mojtaba Khamenei, stated that Iran’s uranium enrichment and Tehran’s control over the strategic waterway remain major sticking points in the negotiations. This, along with hawkish US Federal Reserve (Fed) expectations, underpin the USD and cap the GBP/USD pair.
Minutes from the April 28–29 FOMC meeting released on Wednesday revealed that a majority policymakers believe that policy firming would likely become appropriate if inflation continued to run persistently above the 2% target. Traders were quick to react and are now pricing in around a 60% chance that the US central bank will raise borrowing costs by the year-end. This, in turn, assists the USD in preserving its recent strong gains to a six-week high and warrants some caution for the GBP/USD bulls.
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Canadian Dollar.
USD
EUR
GBP
JPY
CAD
AUD
NZD
CHF
USD
0.10%
-0.76%
0.21%
0.29%
0.17%
-0.46%
0.05%
EUR
-0.10%
-0.87%
0.18%
0.17%
0.05%
-0.49%
-0.07%
GBP
0.76%
0.87%
1.00%
1.05%
0.93%
0.38%
0.78%
JPY
-0.21%
-0.18%
-1.00%
0.03%
-0.11%
-0.72%
-0.19%
CAD
-0.29%
-0.17%
-1.05%
-0.03%
-0.13%
-0.75%
-0.27%
AUD
-0.17%
-0.05%
-0.93%
0.11%
0.13%
-0.55%
-0.06%
NZD
0.46%
0.49%
-0.38%
0.72%
0.75%
0.55%
0.40%
CHF
-0.05%
0.07%
-0.78%
0.19%
0.27%
0.06%
-0.40%
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).
The 14-day Relative Strength Index around 47 indicates recent pullback is a consolidation.
Failing to break the wedge could push the spot down toward its three-month low near 181.87.
EUR/JPY remains flat for the second consecutive day, trading around 184.70 during the Asian hours on Friday. The technical analysis of the daily chart indicates the currency cross is positioned on the upper boundary of an emerging descending wedge pattern, indicating a potential for a bullish reversal.
However, the EUR/JPY cross is holding beneath both the nine-period and 50-period Exponential Moving Average (EMA), keeping the near-term bias capped despite the broader uptrend. The 14-day Relative Strength Index (RSI) sits around 47, pointing to neutral momentum and suggesting the recent pullback is consolidating rather than impulsive for now.
The immediate resistance lies at the confluence around nine-day EMA of 184.76, followed by the 50-day EMA at 184.85 and the upper boundary of the descending wedge. A successful break above this zone would support the EUR/JPY cross to explore the region around the all-time high of 187.95, which was recorded on April 17.
A failure to break the descending wedge would put downward pressure on the EUR/JPY cross to navigate the region around the three-month low of 181.87, recorded on March 16, followed by a five-month low of 180.81, which was reached on February 12.
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.
USD
EUR
GBP
JPY
CAD
AUD
NZD
CHF
USD
0.08%
0.06%
0.03%
0.11%
0.21%
0.08%
0.06%
EUR
-0.08%
-0.02%
-0.04%
0.02%
0.15%
0.00%
-0.04%
GBP
-0.06%
0.02%
-0.04%
0.05%
0.15%
0.03%
-0.03%
JPY
-0.03%
0.04%
0.04%
0.09%
0.17%
0.04%
-0.01%
CAD
-0.11%
-0.02%
-0.05%
-0.09%
0.08%
-0.05%
-0.08%
AUD
-0.21%
-0.15%
-0.15%
-0.17%
-0.08%
-0.13%
-0.19%
NZD
-0.08%
-0.01%
-0.03%
-0.04%
0.05%
0.13%
-0.05%
CHF
-0.06%
0.04%
0.03%
0.00%
0.08%
0.19%
0.05%
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
The Swiss Franc ranges around 0.7870 vs. the US Dollar, with investors awaiting US-Iran deal confirmation.
The issues regarding the handover of uranium enrichment by Iran to the US and the authority on Hormuz remain unsolved.
Flash US S&P Global Manufacturing PMI surprisingly expanded at a faster pace to 55.3 in May.
The Swiss Franc trades flat against the US Dollar (USD) around 0.7870 during the Asian trading session on Friday. The USD/CHF pair consolidates as investors await the confirmation of a prolonged peace deal between the United States (US) and Iran, following the announcement that both sides have reached a “final draft” with mediation from Pakistan.
As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades marginally higher to near 99.27.
On Thursday, market sentiment turned favorable for riskier assets after the Iranian Labour News Agency (ILNA) reported that a final draft between Washington and Tehran has been reached and a deal can be announced within next few hours.
However, Iran still seems not ready to surrender its enriched uranium and wants recognition of its authority on the Strait of Hormuz, Reuters reports.
On the economic data, front preliminary S&P Global Composite PMI data for May has come in steady at 51.7 as an unexpected strong growth in the manufacturing sector activity offsets the impact of moderate expansion in the Services PMI.
In the Swiss economy, investors seek fresh cues regarding whether the Swiss National Bank (SNB) will call for an exit from its dovish monetary policy stance due to rising global inflationary pressures amid elevated oil prices.
AUD/JPY drifts lower to near 113.50 in Friday’s early European session.
Surprise rise in Australia’s Unemployment Rate will give RBA more reason to delay further rate hike at the June meeting.
The constructive outlook of the cross prevails above the 100-day EMA, with neutral-to-mildly bullish RSI momentum.
The first upside barrier emerges at 113.65; the initial support level to watch is 112.50.
The AUD/JPY cross trades in negative territory around 113.50 during the early European session on Friday. The Australian Dollar (AUD) softens against the Japanese Yen (JPY) as markets slash the chance of more interest rate hikes from the Reserve Bank of Australia (RBA) after a surprise rise in the jobless rate.
Australia’s Unemployment Rate jumped to 4.5% in April from 4.3% in March, the Australian Bureau of Statistics showed on Thursday. This reading registered the highest in about four and a half years. The report will provide the Australian central bank with more reason to hold off on a fourth rate hike at its next meeting in June, which could weigh on the Aussie.
The probability of a rate hike at the next meeting dropped to just 3%, from 13% before the release of the employment report, according to financial market pricing provided by Westpac.
On the other hand, softer Japanese inflation data could weigh on the JPY and act as a tailwind for the cross. Japan’s National Consumer Price Index (CPI) rose by 1.4% YoY in April, compared to 1.5% in March, the Japan Statistics Bureau revealed on Friday.
Meanwhile, Japan’s core CPI climbed by 1.4% YoY in April, marking the slowest annual pace in four years.
Technical Analysis:
In the daily chart, AUD/JPY holds comfortably above the 100-day Simple Moving Average (SMA) at 110.70, keeping the broader bias constructive despite the latest pullback from recent highs. Price is now trading just under the Bollinger Bands’ 20-day SMA basis line, suggesting topside momentum has slowed but not broken, while the Relative Strength Index (14) near 51 hints at neutral-to-mildly positive momentum rather than overbought conditions.
On the topside, immediate resistance is located at the Bollinger middle band around 113.65, with a break higher opening the way toward the May 14 high of 114.66. The next hurdle is seen at the upper Bollinger band near 114.83. On the downside, initial support emerges at the lower Bollinger band around 112.50, ahead of the April 13 low of 111.66. The key trend support is located at the 100-day SMA near 110.70, where buyers would be expected to defend the prevailing uptrend on deeper pullbacks.
MUFG’s Lee Hardman highlights a strong recovery in the Pound and gilts as UK fiscal and inflation concerns ease. GBP/USD has bounced toward the 200-day moving average, while long gilt yields have fallen sharply. Softer UK CPI and weakening labour market data have reduced expectations for Bank of England rate hikes, though MUFG still sees downside risks for the Pound from energy and political uncertainty.
Pound recovery faces lingering downside risks
“The pound and gilts have staged an impressive rebound this week driven both by a reduction in fears over UK fiscal and inflation risks. After hitting a low of 1.3303 on 18th May, cable has risen back up towards the 200-day moving average at around 1.3420.”
“The spokesperson stated that Andy Burnham plans to stick the government’s current fiscal rules which would curtail room to loosen fiscal policy if he becomes prime minister. The policy “u-turn” helps to ease downside risks for the pound and gilts in the near-term.”
“The report revealed a much larger than expected drop in core and services inflation helping to ease some concerns over the risk of more persistent inflation in the UK. It provides some reassuring news that underlying inflation was continuing to slow before the energy price shock hits harder heading into the summer.”
“In response to the softer CPI report, the UK rate market has moved to scale expectations for BoE rate hikes. The timing of the first rate hike has been pushed out until July or September, and there are only around 50bps of hikes priced in by year end.”
“Overall, the latest developments leave the pound on a stronger footing in the near-term but we still judge that risks remain tilted to the downside. The ongoing fallout from the energy price shock and lingering UK political uncertainty continue to pose downside risk for the pound.”
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