• Cable was helped off 1.3367 intra-day low by Pakistan's peace talks offer

• Rally extended to 1.3425 NY session high as USD dipped on CNN news

• CNN-Iranian source acknowledges U.S. outreach. Ensuing low is 1.3389

• 1.3389 low plumbed on word Gulf states weigh military options vs Iran

• BoE's Pill says uncertainty is no excuse for inaction on inflation risk

• UK February inflation data due on Wednesday at 0700 GMT; CPI f/c 3%

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

MUFG Research discusses the scope for USD/JPY intervention.

"The hope must be that rhetoric will cap the upside. But as is always the case, rhetoric loses its value over time and if we see further energy price rises this week (more likely than not) then USD/JPY will be through the key level and testing the 2024 high of 161.95," MUFG notes.

"Given the Fed checked rates in USD/JPY in January and given Washington is probably unhappy with the strength of the dollar, there is certainly a plausible scenario of joint intervention although we see that scenario only as a risk. Sole intervention will have the usual initial impact but will be even more challenging to achieve success than in the recent previous episodes," MUFG adds.

• Cable falls to 1.3367 as safe-haven dollar strengthens on Iran news

• Iran toughens negotiating stance amid mediation efforts, sources say

• NY Times-Saudi prince is said to push Trump to continue Iran war in recent calls

• 1.3367 is the lowest level since Monday's two-week high of 1.3480

• Support points include 1.3352 (Friday's NY session high) and 1.3315

• Hawkish comments from BoE's Pill suggest he will vote for April hike

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

Bank of America Global Research summarizes its latest views and targets for EUR/USD and USD/JPY.

"EUR (EUR/USD 1.20) – bullish: Bearish near term on geopolitics and elevated energy prices. Bullish in H2 on German growth acceleration, FX hedging, and low bar for EU reforms," BofA notes.

"JPY (USD/JPY 157) – bearish: Structural outflows from corporates and households continue. BoJ’s wait‐and‐see stance to energy shock and political pressure for fiscal stimulus could add to yen weakness. FX intervention risk rises in 161-165 range," BofA adds.

Goldman Sachs Research likes short EUR/USD and short EUR/CHF plays to position for a prolonged energy shock.

"We recently highlighted that when growth concerns begin to have as much impact as inflation concerns, FX tends to see greater outperformance of the safe havens (JPY, CHF, USD) and broad underperformance of high-beta currencies—even those that tend to benefit from higher energy prices (e.g., CAD, AUD, NOK, BRL). But for JPY to outperform USD, long-end yields need to fall, and we are not there yet," GS notes.

"For that reason, and observed performance during the 2022 shock (, short EUR/USD (and short EUR on crosses) is one of our preferred expressions for a prolonged shock, especially as it has lagged the latest rally in European natural gas prices We also like short EUR/CHF as the SNB likely becomes less inclined to limit currency strength under more persistent inflationary pressures," GS adds.

• AUD/USD implied vols are the highest in G10 USD FX, driven by elevated realised vol, war risk and AUD's strong risk correlation

• Benchmark 1-month implied vol holds near its conflict peak of 12.2, with dips proving shallow as buyers re-engage consistently

• The persistence of elevated implied vol suggests the market sees little prospect of a near-term de-escalation in risk drivers

• Risk reversals show their steepest downside skew since Liberation Day, with 1-month AUD puts 1.8 vol premium over calls

• Elevated vol and skew show that FX options remain very wary of more FX volatility and potential losses, with little appetite to fade

• Related comment - Gamma games — FX options traders ride Iran headline storm

• Related comment - Gold's crisis paradox: Why the safe haven stumbled
Benchmark 1-month expiry FXO implied volatility


AUD/USD 25 delta risk reversals


(Richard Pace is a Reuters market analyst. The views expressed are his own)

Markets have been searching for answers as to why gold — traditionally a geopolitical hedge — has defied expectations amid the Middle East conflict. Deutsche Bank has canvassed theories from market participants in a recent client note.

The first explanation is a simple valuation re-rating. A regression of de-trended gold against yields and emerging market equities suggests gold was significantly overvalued — by more than 15% — at the end of February. That gap has now narrowed to just 2%, suggesting much of the froth has been wrung out.

That re-rating has been driven in part by heavy supply from the retail community, with persistent selling linked to Exchange Traded Fund outflows and regional trading houses across Asia Pacific — some of which may be margin call-related.

At the same time, the Commodity Trading Advisor community — particularly trend-following models — have flipped their positioning, adding further selling pressure. This has been compounded by the unwinding of legacy bullish trades from macro discretionary funds, alongside some interest from Relative Value players looking to buy front-end volatility.

Mixed signals from front-end rates have also confused systematic models, creating an uncertain backdrop for algorithmic strategies.

On the options side, there has been a major gap higher in gold gamma given the spot move, with liquidity extremely thin. One-week implied volatility reached around 60.0 volatility points mid-market, compared with the high 30s at the London close on Friday.

Longer-term investors have also been active, raising US dollars either by selling their gold holdings outright or lending gold in the front end via swaps. Gold lease rates continue to push lower as lending across the front end of the curve increases — partly driven by activity in the Bank of England curve.

Finally, structured product flows have added to the pressure, with the Private Wealth Management sector unwinding long gold Target Redemption Forward and accumulator positions. To unwind these structures, dealers must sell spot gold and buy volatility — a dynamic that has amplified the move.

In summary, the observed price action appears to be primarily a liquidity-driven event rather than any fundamental shift in gold's long-term trajectory. This aligns with Deutsche Bank strategy's assessment that gold is nearing fair value — and that a re-evaluation of upside targets may now be warranted.
XAU=

(Richard Pace is a Reuters market analyst. The views expressed are his own)

• EUR/USD recovered 1.1640 from 1.1485 after Trump extended Iran Power network attack deadline Monday

• Setback and consolidation ensued around 1.1600, with 1.1576-1.1618 range so far Tuesday

• Close above 21-dma 1.1617 might alleviate some downside pressure, above 1.1672-98 200-100-dma preferred

• Eurozone PMI's saw Manufacturing beat, services and composite missed, but data largely ignored

• Conflict headlines continue to drive EUR/USD and broader FX which benefits short-dated expiry FX options

• Option implied volatility bought on dips and remains high - reflects volatility risk and scepticism over peace deal

• Big FX option strike expiries at Tues 10-am New York/14.00 GMT cut and related hedge flows surround EUR/USD
EUR=EBS


(Richard Pace is a Reuters market analyst. The views expressed are his own)

• Cable has traded a 56 pip range thus far Tuesday; 1.3388-1.3444

• Those parameters are within Monday's London afternoon range of 1.3379-1.3480

• Ascent to 1.3480 was due to USD supply after Trump postponed Iran strikes

• 1.3480 is two-week peak (1.3481 was March 10 high). 1.3258 was Monday's low

• UK March flash PMI data due at 0930 GMT; services index is forecast at 53

• UK February CPI data is due on Wednesday at 0700 GMT; 3% YY expected

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

• USD/JPY has seen a 158.30-158.79 range, on Tuesday, according to EBS data

• Despite Monday's setback spot could still surge through the 160 level eventually

• Last week spot failed to sustain the break under the 158.11 Fibo, a bullish bear-trap

• 158.11 Fibo is a 23.6% retrace of the 152.28 to 159.90 (February to March) EBS rise

• A bear-trap is set when a market breaks below a tech level but then subsequently reverses

• USD/JPY and EUR/JPY tend to move in tandem, log correlations are high above +0.5

• Fin Min Katayama: ready to act any time on all fronts (in reference to FX volatility)

Correlation Chart


Daily Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own)

• USD/JPY on slightly lower plane on 158, Asia today 158.30-71 EBS

• Follows news Trump giving Iran more time for negotiations on conflict end

• Market awaiting further news, eyes on crude oil futures re-open later today

• USD/JPY holding around base of 158.66-159.11 widening hourly Ichimoku cloud

• Kijun 158.84, 100-HMA 158.93, 200-HMA 159.08 - all in cloud currently

• Support, bids seen good towards 158.00, low yesterday 158.03

• Option expiries today supportive, $2.3 bln between 158.00-10

• EUR/JPY off high yesterday, Asia 183.91 to 183.68 EBS

• Pivoting around wafter thin 183.50-72 daily Ichimoku cloud

• Holding above ascending hourly Ichimoku cloud currently between 183.17-51

• GBP/JPY 212.19-87, inside day after 211.51-213.31 range yesterday

• Inside day for CHF/JPY too, 200.95-201.49 after 200.43-201.99 yesterday

• AUD/JPY still heavy after fall to 110.24 yesterday, Asia today 110.43-111.21

• More downside here could jeopardize uptrend since last April

• FinMin Katayama even more threatening on FX intervention today

• Talk of Japanese intervention in crude oil markets seen very unlikely

• Related comments , ,

• Also , on Katayama-speak/Japan action

• On Japan data , for more click on [FXBUZ]

USD/JPY hourly:


EUR/JPY hourly:


AUD/JPY hourly:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• GBP/USD down 0.2% in Asia as Iran denies that it engaged in talks with U.S.

• WSJ reports that Gulf States are edging toward joining fight against Iran

• Brent rallies 3.5%, Wall St futures slide, Treasury yields rally

• S&P E-Mini down 0.5%, U.S. 2-year yield up 7 bps, gold declines 1.2%

• Choppy moves to continue as markets await clarity on possible de-escalation

• Strong resistance at 1.3470-80, support 1.3380, 1.3350

• Ranges : Monday 1.3258-1.3480, Asia 1.3388-1.3435
Iran conflict causing price spikes in UK mortgages:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• USD off as Trump 'ultimatum date' to Iran postponed, de-escalation?

• All markets react with US Treasury yields, crude oil prices off, stocks up

• USD/JPY backs off, tracks away from 160 to 158 handle

• Asia 158.30-60 EBS so far, low yesterday 158.03, support eyed pre-158.00

• More at 157.62 low Friday, 157.51 low last Thursday, Japan importers on bid

• Hourly chart shows spot below widening 158.67-95 hourly Ichimoku cloud

• Now descending 100-HMA 158.94 in Ichimoku cloud, 200-HMA 159.08 above

• Option expiries likely supportive, today $2.3 bln between 158.00-10

• Middle East news, moves in energy prices and Treasury yields still foci

• Related comments , , ,

• And , , , also

• US markets , , ,

• On Fed , , US economy ,

• Also , for more click on [FXBUZ]

USD/JPY:


NYMEX crude oil futures:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• True North Copper rises as much as 5.8% to A$0.32; marks biggest intraday pct gain since February 25

• Copper explorer gets Queensland Government Collaborative Exploration Initiative Grant of ~A$250,000 ($175,425)

• Funds to accelerate co's geophysical surveying at its Mt Oxide Copper Project

• Nearly 500,948 shares traded, 1.1x the 30-day average

• YTD, TNC down 33.7%
($1 = A$1.4251)

(Reporting by Roshan Thomas in Bengaluru)

• Australian gold stocks rise 3.9%, on track for their best day since April 10, 2025

• Gold trimmed losses on Monday to recover from a four-month low after U.S. President Donald Trump postponed strikes on Iranian infrastructure [GOL/]

• Gold miners Evolution Mining , Northern Star Resources up 4.35% and 4.42%, respectively

• Despite moves, sub-index down 1.8% YTD

(Reporting by Aamir Sheik Khalid in Bengaluru)

• NZD/USD +1.6% from Mon 0.5765 low in wake of plummeting oil prices

• Trump unwinds Iran ultimatum & claims productive talks (which Iran denies)

• RBNZ Governor Breman says will only hike if oil spike entrenches inflation

• NZD downtrend intact, offers in front of 0.5920 55-DMA inflection point

• RBNZ Chief Economist Paul Conway speaking in Auckland Wed

• Range NZ 0.5855-80, support 0.5710 0.5580, resistance 0.5918 0.6092 0.6120
NZD Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

Danek Research targets USD/CAD at 1.38 by end of Q2 and Q3, and 1.39 by end of Q4.

"We expect USD strength to persist in the near-term but turn bearish over the coming year (see EUR/USD slide). Over the longer term, this will in isolation act as a headwind for the trade weighted CAD," Danske notes.

"In addition, the Canadian economy outlook alongside continued trade concerns with the US are likely to pull CAD lower – also vs the USD. As such, we have adjusted our forecasts but stick to a flat-to-marginally upward sloping profile for USD/CAD," Danske adds.

• AUD/USD +1.4% from Mon 0.69114 low, Brent Crude -10.6%, USD index -0.4%

• Trump postpones strikes on Iran's civilian infrastructure for 5-days

• Trump claims productive talks, but Iran denies any negotiations taking place

• AUD news driven with support/resistance zones widely separated by volatility

• AU monthly CPI Feb update due Wed, will help shape RBA OCR expectations

• Range overnight 0.69114-0.7062, support 0.6900, resistance 0.7250 0.7282
AUD Daily 200-DMA & DXY Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• EUR/USD hit 1.1485 in Europe's morning, buyers emerged as risk sentiment rallied

• Pres. Trump's postponement of military strikes on Iran power plants rallied risk

• US$ selling emerged, US yields turned down, USD/CNH turned lower

• Oil fell, gold erased most losses while silver & stocks turned positive

• EUR/USD rallied to above the 10-DMA then pierced the 21-DMA, t-l off the Jan. 27 high

• The pair traded to an eight session high of 1.1640 then gave back some gains

• US$ firmed up a bit, EUR/USD neared 1.1605 late, traded up +0.33% in NY's afternoon

• Daily techs lean bullish; RSI rising, poossible head & shoulders bottom forming
eurusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

(Corrects typo in headline)

• NY opened near 0.6925 after AUD/USD fell sharply overnight and traded down to 0.6911

• Pair rallied as risk-on ensued after Trump's postponement of strikes on Iran energy infrastructure

• US yields fell sharply while the US$ lost its safe-haven bid

• Oil & USD/CNH fell while gold erased most losses and silver, equities turned positive

• AUD/USD rallied toward the converging 10- & 21-DMAs, hit 0.7062 then gave back some gains

• The US$ bounced slightly, AUD/USD neared 0.7015 late, traded close to flat on the session

• A large daily doji formed after a 1-1/2-month low was hit, suggests investors are indecisive
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

RBC Research maintains a bullish bias for EUR/USD targeting the pair at 1.16, 1.17, 1.18. and 1.20 by end of Q1, Q2, Q3, and Q4 respectively.

"We are leaving our forecasts unchanged for EURUSD– but emphasize short-term risks are material and much be managed. There are three main arguments for EUR/USD higher in 2026 & 27: (1) As the cost of carry compresses between the countries, hedges on US assets will rise. (2) There is an ongoing expectation of an asset rotation from US-toEurope. (3) Stronger European growth in 2026," RBC notes.

"We are aware of the headwinds to long-term EUR/USD strength – US productivity growth outperforms Europe’s, there is no good European alternative to USTs, the US dominates Europe in AI and tech and the EU also still has an undercurrent of political risk. Taken on balance, we are comfortable with our target of 1.24 for 2027," RBC adds.

• Cable hits 1.3379 after extending south from 1.3480 (two-week high)

• Drop to 1.3379 influenced by Iran's war guidance

• Iran's foreign ministry denies talks with US, IRNA says

• 1.3352 (Friday's NY session high) is now a GBP/USD support point

• UK March flash PMIs due on Tuesday at 0930 GMT; services PMI f/c 53

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

Morgan Stanley Research argues that USD/JPY puts may be increasingly attractive to hedge risk exposure given JPY- positive intervention risks.

"Investor caution on JPY may be related to a host of concerns about fiscal sustainability, the need for BoJ hikes in an environment of energy price-induced inflation, and the effects of higher energy prices on Japanese growth. However, upside risks to USD/JPY appear capped in part by the potential willingness of Japanese authorities to intervene to support the JPY," MS notes.

"Our colleagues write here that recent communication from the Japanese Minister of Finance (including noting that "currency moves have not been aligned with fundamentals for a while, but the deviation appears particularly significant at present") appear to be precursors to intervention or a rate check," MS adds.

• Cable meets fresh headwind around 1.3434 after extending north from 1.3313

• 1.3434 is the 200-day moving average (1.3436 was Friday's Ldn am high)

• Offers by 200DMA also capped the earlier Trump-spurred jump from 1.3269

• 1.3313 was pullback low from the high following Trump's dovish war guidance

• Trump says U.S. has "major points of agreement" in talks with Iran

• Ultra-dove Miran still believes Fed should cut interest rates

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)