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New Zealand Dollar rallies to 0.5700 vs USD on expected RBNZ rate hike

  • NZD/USD gains some positive traction after the widely expected RBNZ rate hike.
  • Renewed US-Iran hostilities underpin the safe-haven USD and cap spot prices.
  • Reviving inflation fears further support the buck ahead of the FOMC Minutes.

The NZD/USD pair attracts some buyers in reaction to the Reserve Bank of New Zealand’s (RBNZ) anticipated interest rate hike and reclaims the 0.5700 mark during the Asian session on Wednesday. Spot prices, for now, seem to have snapped a two-day losing streak, though the upside potential seems limited amid geopolitical uncertainties.

As was widely expected, the RBNZ decided to raise the Official Cash Rate (OCR) by 25 basis points (bps) to 2.50% following the conclusion of the June monetary policy meeting. The New Zealand Dollar (NZD) bulls, however, seem hesitant and opt to wait for further insight if this is a one-off move rather than the start of further tightening. Hence, the focus will be on the post-meeting press conference, where comments from RBNZ Governor Dr. Anna Breman will influence the NZD and provide a fresh impetus to the NZD/USD pair.

In the meantime, renewed US-Iran hostilities assist the safe-haven US Dollar (USD) to stand firm near the weekly high, which is seen acting as a headwind for the currency pair. The US military unleashed a new wave of strikes against Iran on Tuesday following reports of attacks on three oil tankers in the Strait of Hormuz, jeopardizing the already fragile ceasefire. The US also moved to withdraw a concession that allowed Iran to sell oil on international markets, triggering a sharp rally in Oil prices and reviving inflation fears.

The concerns, in turn, lift market expectations that the Fed will hike interest rates at least once by the end of this year, triggering a fresh leg up in US Treasury bond yields and further underpinning the Greenback. This contributes to capping the upside for the NZD/USD pair. Traders also seem hesitant and keenly await the release of FOMC Minutes before positioning for the next leg of a directional move, warranting caution before positioning for the resumption of the recent recovery from the year-to-date low, touched in June.

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British Pound declines to near 1.3350 as US launches strikes on Iran

  • GBP/USD softens to around 1.3355 in Wednesday’s Asian session.
  • US launched strikes on Iran after tankers hit in Strait of Hormuz.
  • Burnham is widely expected to become Prime Minister by July 20.

The GBP/USD pair loses traction to near 1.3355 during the Asian trading hours on Wednesday. The US Dollar (USD) edges higher against the British Pound (GBP) amid renewed geopolitical tensions after the US renewed strikes on Iran. The Federal Reserve’s (Fed) June meeting minutes will be published later on Wednesday.

Washington unleashed a new wave of strikes against Tehran on Tuesday and revoked a license allowing the country to sell oil after three tankers were attacked in the Strait of Hormuz, per Reuters. Geopolitical fears surge following this headline, supporting the Greenback as a safe-haven asset.

Westpac analysts said that concerns for the stability of the peace deal reemerged after Iran attacked ships crossing the Strait of Hormuz. “Concerns over the inflation outlook were in focus, seeing yields jump higher across the globe,” they wrote.

The formal race to replace outgoing Prime Minister Keir Starmer begins on July 9. Frontrunner Andy Burnham is widely expected to become Prime Minister by July 20. The Cable might receive some support as the UK political landscape stabilizes. Investors are pricing out the domestic risk premium as Burnham anchors his position as the leader-in-waiting to succeed Keir Starmer.

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Dollar Firms Up on Mideast Tensions

The dollar index held above 101 on Wednesday after advancing in the previous session, supported by renewed safe-haven demand as the US military carried out fresh air strikes on Iran following recent attacks on ships transiting the Strait of Hormuz. The latest escalation threatened the interim US-Iran peace deal to end the war and pushed oil prices higher, stoking inflation fears and raising prospects for interest rate hikes. Meanwhile, investors awaited the minutes of the Federal Reserve’s June meeting for additional clues on the policy outlook after the central bank adopted a more hawkish tone at its June policy meeting. Markets are currently pricing in around a 50% chance of a Fed rate increase in September, up from about 46% a day prior. Elsewhere, data on Tuesday showed the US trade deficit widened to $77.6 billion in May, the largest since March 2025.

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Canadian Dollar weakens despite higher oil prices

  • USD/CAD rises as the US Dollar holds gains amid renewed geopolitical tensions in the Strait of Hormuz.
  • The Greenback’s upside could be restrained as traders price out any Fed rate hike for this month and September.
  • The commodity-linked Canadian Dollar may gain support from higher oil prices.

USD/CAD gains ground for the third successive day, trading around 1.4210 during the European hours on Tuesday. The pair appreciates as the US Dollar (USD) holds ground, which could be attributed to the renewed geopolitical tensions in the Strait of Hormuz.

However, the upside of the Greenback could be restrained as traders price out any Federal Reserve rate hikes this month and in September. This shift in sentiment followed a cooling employment report that revealed fewer jobs added across April, May, and June than Wall Street had anticipated.

Furthermore, a recent drop in crude oil prices, driven by an OPEC+ production boost and a US-Iran peace deal, has alleviated broader inflationary pressures, softening the urgency for an aggressive Fed policy outlook.

The upside of the USD/CAD pair could be capped as the commodity-linked Canadian Dollar (CAD) gains support from higher oil prices. Although Canada is a major crude exporter, lower oil prices diminish foreign capital inflows, ultimately weighing on the loonie dollar.

West Texas Intermediate (WTI) oil price gains ground after registering modest losses in the previous day, trading around $69.40 per barrel at the time of writing. Crude oil prices received a temporary boost following reports that Iran fired at least two missiles at commercial vessels transiting the strategic waterway late Monday.

While two ships sustained significant damage, no casualties were reported. Separately, the UK Maritime Trade Operations (UKMTO) confirmed that a southbound tanker was struck on its port side by an unknown projectile, which ignited a fire on board.

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USD/CHF Price – Resistance at 0.8075 remains in focus as dips find buyers

  • USD/CHF remains bid above 0.8050, with 0.8075 resistance under pressure.
  • The Swiss Franc remains on the back foot after the downbeat Swiss employment report released on Monday.
  • Technically, the pair is in an A-B-C correction, following a 5-wave bullish cycle.

The US Dollar (USD) trades higher for the second consecutive day against the Swiss Franc (CHF). Downdside attempts remain shallow so far, amid a calm market mood, and the immediate trend shows a mild bullish stance, with resistance at the 0.8075 area under pressure.

On the macroeconomic front, data from the Swiss National Bank revealed that Foreign Currency Reserves rose to CHF759 billion in June, from CHF 711 billion in May. 

The Swissie, however, remains weighed by the downbeat employment figures released on Monday, which showed that the Unemployment Rate rose to a five-year high of 3.1%. Later in the day, the US ISM Services Purchasing Managers Index (PMI) met expectations with solid growth in activity, while the S&P Global Services PMI revealed an unexpected slowdown.

Technical Analysis: Looking for direction above 0.8050

Chart Analysis USD/CHF

USD/CHF is in a corrective phase after completing a 5-wave (Elliot Wave) bullish cycle, with momentum indicators showing mixed signals. The daily chart reflects a constructive Relative Strength Index (14), near 58, while the Moving Average Convergence Divergence (MACD) has slipped marginally into negative territory.

Bulls need to break resistance around 0.8075 (June 26, 30 lows and July 6 high) to confirm the completion of the corrective phase, and shift focus towards the late June and early July highs, between 0.8120 and 0.8135.

On the downside, a bearish reaction below 0.8045 session lows would add pressure towards Friday’s trading floor at the 0.8010 area. If this level gives way, an A-B=C-D correction would target the 61.8% Fibonacci retracement off the bullish run, just above 0.7900.

Swiss Franc Price This week

The table below shows the percentage change of Swiss Franc (CHF) against listed major currencies this week. Swiss Franc was the strongest against the Japanese Yen.

USDEURGBPJPYCADAUDNZDCHF
USD0.10%-0.23%0.37%0.17%-0.06%0.39%0.43%
EUR-0.10%-0.36%0.26%0.04%-0.13%0.25%0.28%
GBP0.23%0.36%0.50%0.39%0.23%0.61%0.63%
JPY-0.37%-0.26%-0.50%-0.24%-0.32%0.02%0.02%
CAD-0.17%-0.04%-0.39%0.24%-0.10%0.27%0.24%
AUD0.06%0.13%-0.23%0.32%0.10%0.38%0.41%
NZD-0.39%-0.25%-0.61%-0.02%-0.27%-0.38%0.02%
CHF-0.43%-0.28%-0.63%-0.02%-0.24%-0.41%-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 Swiss Franc from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CHF (base)/USD (quote).

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Offshore Yuan Extends Fall

The offshore yuan depreciated to around 6.80 per dollar on Tuesday, extending losses from the previous session and hitting a one-week low as investors weighed the latest outlook for China’s economy. The World Bank projected China’s economic growth to slow to 4.4% in 2026 and 4.3% in 2027, citing a prolonged property market downturn and subdued consumer spending. Meanwhile, the government also set its 2026 GDP growth target at 4.5%–5.0%, the lowest since 1991 and the first downward revision since 2023, after maintaining a target of around 5% over the previous three years. Separately, the PBoC announced measures to strengthen Hong Kong’s role as an offshore yuan hub. These include more than doubling the RMB Business Facility to 500 billion yuan, raising the annual Southbound Bond Connect quota to 800 billion yuan from 500 billion yuan, and pledging support for more yuan-denominated commodity products following the launch of a new gold clearing system in Hong Kong backed by major banks.

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EUR/USD Price – Turns broadly sideways below 20-day EMA

  • EUR/USD edges down to near 1.1433 as the US Dollar ticks higher.
  • The FOMC Minutes of the June meeting will be the major driver for the US Dollar this week.
  • The ECB seems to be following the Fed’s footsteps, refusing to deliver remarks on the monetary policy outlook.

The EUR/USD pair trades marginally lower at around 1.1433 during the European trading session on Tuesday. The major currency pair faces slight selling pressure as the US Dollar (USD) edges up, while investors await the release of the Federal Open Market Committee (FOMC) minutes of the June policy meeting on Wednesday.

At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades slightly higher to near 100.92.

Investors keep an eye on the FOMC Minutes to identify reasons probably responsible for restricting policymakers from delivering forward guidance on monetary policy decisions.

In the June monetary policy press conference, Fed Chairman Kevin Warsh said that policymakers agreed that the “so-called forward guidance is not well suited to the current policy conjuncture.

Like the Fed, officials from the European Central Bank (ECB) also appear not in favor of delivering remarks regarding the monetary policy outlook.

Over the weekend, ECB Governing Council member Emmanuel Moulin also denied providing cues regarding the central bank’s decision in July, while speaking at the Rencontres Economiques conference in Aix-en-Provence. “We are not doing forward guidance so I won’t say what we will do in July,” Moulin said.

EUR/USD technical analysis

EUR/USD trades lower at around 1.1430, keeping a bearish near-term tone as the pair holds beneath the 20-day exponential moving average (EMA) at 1.1460. The fact that price remains under this short-term trend gauge suggests rallies are still being capped, while the Relative Strength Index (14) at 41.9 stays below the neutral 50 line, hinting at lingering downside pressure rather than a decisive recovery.

On the topside, immediate resistance is located at the 20-day EMA around 1.1460, and a sustained break above this level would be needed to ease the current bearish bias and open the way for a stronger rebound. Looking up, the pair could advance to the psychological level of 1.1500 if it breaks above the moving average.

On the downside, the yearly low around 1.1330 will be the key support zone; a break below it would expose the pair to the 29 May 2025 low at 1.1210.