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the US launched fresh airstrikes against Iran over the weekend, while Tehran declared its ceasefire with Washington no longer in effect.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.
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.
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.
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.
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.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.00% | 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% | |
| CAD | 0.04% | 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).
Japanese Yen softens on renewed US-Iran tensions, Japan flags intervention risk
- USD/JPY trades with mild gains around 162.40 in Friday’s Asian session.
- The US is carrying out major strikes on Iran for the sixth consecutive day, lifting the US Dollar.
- Japan’s Katayama said authorities are ready to act on currency moves whenever necessary.
The USD/JPY pair posts modest gains near 162.40 during the Asian trading hours on Friday. The US Dollar (USD) strengthens against the Japanese Yen (JPY) as the United States (US) launches a new wave of strikes against Iran for a sixth night in a row. Traders will keep an eye on the preliminary reading of the Michigan Consumer Sentiment Index for July later on Friday.
The US Central Command (CENTCOM) said on Thursday that it launched a new wave of strikes against Iran for a sixth night in a row, per the BBC. The US military 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 of Hormuz.
Iran’s state media reported US missiles struck close to the island of Qeshm, near the strait, as well as in Bandar Abbas and Bushehr, the site of a nuclear power plant. Earlier this week, US President Donald Trump threatened to strike Iran’s bridges and power plants if the country did not return to talks. Renewed Hormuz hostilities could boost the Greenback against the JPY in the near term.
Kyodo News Agency reported on Friday that the Japanese government will state in its economic blueprint that decisions on specific monetary policy tools should be left to the Bank of Japan (BoJ). A final version of the blueprint will also state that the government will reach a decision “by early August” on whether and by how much Japan will cut 8% consumption tax levied on food.
Traders remain on alert for possible intervention from Japanese officials. Japan’s Finance Minister Satsuki Katayama said on Friday that the authorities are ready to act on currency moves whenever necessary.
Chinese Yuan loses as safe-haven demand lifts US Dollar
- USD/CNH climbs as rising Middle East tensions drive investors toward the US Dollar as a safe-haven asset.
- Iran told Houthi rebels to block the Red Sea oil route if the US attacks Iranian infrastructure.
- Economists and an adviser say China can stabilize growth by fast-tracking already-budgeted national infrastructure projects this year.
USD/CNH gains ground for the second successive day, trading around 6.7760 during the Asian hours on Friday. The pair appreciates as the US Dollar (USD) receives support from escalating developments surrounding conflicts in the Middle East.
Reuters reported on Thursday that Iran has instructed Yemen’s Houthi militia to stand ready to close the critical Red Sea oil route if the United States strikes Iranian power infrastructure, presenting a potent new threat to global energy supplies. Amplifying these concerns, the Tasnim news agency reported explosions in Bandar Abbas, Qeshm, and Ahvaz, while very loud explosions were also heard in Kuwait and as far away as Basra.
These geopolitical flare-ups follow threats made earlier this week by US President Donald Trump, who stated the US would strike Iran’s bridges and power plants next week if the country does not return to the negotiating table. Ultimately, these signs of escalating tensions in the Middle East could boost safe-haven currencies like the US Dollar, potentially creating a strong tailwind for the USD/CNH pair in the near term.
China can stabilize its economic growth this year by fast-tracking already-budgeted national infrastructure projects, according to economists and a government adviser. This approach reduces the likelihood of large-scale fiscal stimulus. The strategy allows Beijing to counter an unexpected, broad decline in investment—which recent data showed has dragged down growth—while maintaining strict control over local government spending, per Reuters.
GBPUSD up 0.1% after better-than-expected UK GDP data
08:00 AM, United Kingdom, monthly GDP report:
- UK GDP Estimate YoY Actual 1.3% (Forecast 1.2%, Previous 1.2%)
- UK GDP Estimate MoM Actual 0.1% (Forecast 0%, Previous -0.1%)
- UK Manufacturing Production MoM Actual 0.1% (Forecast -0.2%, Previous 0.4%)
The UK economy continues its steady, post-recession expansion, marking its sixth consecutive month of rolling three-month growth. While the broader trend remains highly positive, momentum slowed slightly heading into the summer, influenced by global supply chain disruptions stemming from the geopolitical conflict in Iran. Figure 1: Contributions to three-month GDP growth, UK, May 2025 to May 2026
Source: Gross domestic product (GDP) monthly estimate from the Office for National Statistics Key Performance & Sector Breakdown
- Overall GDP: Grew 0.7% in the three months to May 2026 (down slightly from 0.8% in April), but managed a modest 0.1% tick-up in the month of May itself.
- Services (The Growth Engine) : Grew 0.7% in the three months to May. Growth was powered by Information & Communication (up 2.5%) and professional services—specifically scientific R&D (up 5.1% in May), driven by medical sciences.
- Production & Manufacturing: Rose 0.1% over the three months. Manufacturing was the standout sub-sector (up 1.6%), led by pharmaceuticals. However, this was weighed down by sharp declines in energy and water utilities.
- Construction: Grew 1.6% over the three months, buoyed by private commercial projects. However, it contracted 0.8% in May, dragged down by a 5% drop in private housing repair and maintenance.
The pound reacted positively to the reading, though it wasn’t able to break out of the current range between 1,3520 and 1,3550. GBPUSD is tradining closely to the 10-hour exponential moving average (EMA10 on an H1 chart; yellow), slowing down after dynamic gains thruought the yesterday’s session.
Source: xStation5
