Goldman Sachs Research see a scope for another major reverse lower in EUR/CHF.

"An explicit shift in the SNB’s intervention bias at the onset of the current energy shock has been key to the Franc’s underperformance in March, but we see a building case for a reversal lower in EUR/CHF from current levels. We think a similar pattern to the 2022 shock should apply this time around, with initial SNB-driven CHF underperformance giving way to clearer EUR/CHF downside," GS notes.

"While the SNB’s current intervention stance may continue to limit the Franc’s haven behavior in the near term, we increasingly favor outright downside EUR/CHF exposure over the more medium term," GS adds.

Bank of America Global Research maintains a tactial bearish bias on EUR/USD through Q2.

"We remain bearish on EURUSD in the near term, with our end-Q2 forecast at 1.14 and risks skewed to the downside. Persistently higher energy prices present stagflationary impulses globally and slower US-Euro area growth convergence," BofA notes.

The Fed-ECB divergence that our economists forecast for later this year creates an interesting backdrop: on the one hand, an ECB that is focused on protecting its inflation credentials, vs a Fed that prioritizes the labor market, could be a EURUSD tailwind. On the other hand, the picture gets clouded when looking at our economists' forecasts in real terms. Belly real rates have already moved against the EUR and could move further in case of higher global growth concerns or an ECB overreaction," BofA adds.

Nomura Research previews the RBNZ April policy meeting.

"The RBNZ meets this week amid heightened Middle East uncertainty, following the speech by President Trump. We share the strong consensus that it will announce an unchanged cash rate of 2.25%. While we expect some sabre rattling – to guard against the risk of a jump in longer-term inflation expectations – we think the RBNZ will appear relatively balanced , and likely less hawkish than the RBA, ECB and BoE," Nomura notes.

"The renewed jump in oil prices is a negative for NZD too, as New Zealand is a large energy importer, and NZD has also proved somewhat risk-sensitive...We do think positioning favours NZD over AUD – given long positions in AUD in particular – but struggle to identify a fundamental catalyst to push AUD/NZD down near term," Nomura adds.

(Amended headline)

• Dollar kept aloft as another Trump deadline looms

• USD/JPY's daily chart points to an eventual 161 break

• Topside fears persist but option vol premiums are actually low

• Spot has seen a 159.45-92 range, on Tuesday so far, according to EBS data

• Upside limited due to continuing threats of FX intervention

• Fin Min Katayama vows close G7 coordination as markets remain volatile

• 30-day log correlation between USD/JPY and EUR/JPY well below +0.5

• The relationship between USD/JPY and EUR/JPY is breaking down

Correlation Chart


Correlation Chart


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

• FX option implied volatility is broadly heavy due to the lack of FX realised volatility

• However, for pairs like EUR/USD - it remains well above pre conflict lows

• Risk reversals have seen their EUR put over call premiums edge lower beside implied volatility

• However, that EUR/USD downside over upside strike premium is still strong at 1.05 for 1-month expiry

• Recall It was actually 0.25 for EUR calls over puts in late Feb - vol premium for upside over downside strikes

• 1.7 was the conflict peak and 3-year high for downside, but 1-month implied vol was nearer 9.0 then (now 7.4)

• Trump's Iran deadline - how FX options are pricing the risk
EUR/USD 25 delta risk reversals


1-month vol


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

• Traders continue to buy USD/JPY topside strikes at/above 161.00 - would cover near-term break higher

• Despite the demand for upside protection, implied volatility remains heavy amid a lack of realised volatility

• 1-month implied vol traded between 8.85 and 9.0 in size on Monday — back to pre-Middle East conflict levels

• 1-month historic/realised vol sits at 8.0, highlighting the gap between what traders fear and what's actually happening

• The disparity tells the story — hedging demand is there, but the market simply isn't moving enough to justify it

• Benchmark 1-month 25d risk reversals maintain a steady 0.45 vol premium for USD/JPY downside over upside strikes

• Related - Trump's Iran deadline - how FX options are pricing the risk
USD/JPY 1-month implied vs historic/realised vol


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

• AUD/USD has traded a 23.5 pip range thus far Tuesday; 0.6899-0.69225

• Monday range was 0.68775-0.69375 (0.6860-0.6941 was Thursday range)

• Another Trump deadline looms, at 8pm ET/0000 GMT; Iran defiant

• CFTC data-net AUD long rose 15% to 81,506 contracts in week to March 31

• 81,506 contracts is the largest net AUD long position since 2013

IMM net AUD long


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

• Cable has traded a 33 pip range thus far Tuesday; 1.32115-1.32445

• 1.3178-1.3267 was Monday range (1.3160-1.3345 was last week's range)

• Another Trump deadline looms, at 8pm ET/0000 GMT; Iran defiant

• Israeli military tells people in Iran to avoid using trains

• CFTC data-net GBP short fell to 52,665 contracts in the week to March 31

• UK final March services PMI due 0830 GMT; 51.2 f/c, as per flash estimate

GBPUSD


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

• USD/JPY better bid, 159.63-92 EBS as US proposals to Iran deadline nears

• Middle East conflict, crude oil and other energy prices remain foci

• Fears of energy supply, stagflation high, to continue to weigh on JPY?

• Good Japanese importer demand at today's Tokyo fix, other buyers noted too

• USD/JPY upside limited however on continuing threats of FX intervention

• 160.00 seen proverbial line in sand for many, 160.50? Others say maybe 162

• 161.96 high dating back to July 3, 2024, recent high March 30 160.47

• Option expiries today 159.00 $807 mln, 160.00-05 $737 mln, 160.25 $650 mln

• Also $761 mln just above at 160.50 strike

• JGB-US 2-year interest rate differential @247 bps, 10s @192 bps

• EUR/JPY 184.27-40 EBS, buoyant, holding below 184.65 high March 27

• Above its 183.49-83 daily Ichimoku cloud, ascending 100-DMA 183.15 below

• GBP/JPY 211.06-52, holding mostly above its 210.57-211.08 daily Ichi cloud

• AUD/JPY buoyant too, 110.25-58, 110.59 high yesterday, 110.92 March 26

• Also holding above its ascending daily Ichimoku cloud between 107.98-109.74

• Related comment , also , on Japan data

• On MOF/PM Takaichi-speak , ,
USD/JPY hourly:


EUR/JPY hourly:


AUD/JPY hourly:

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

• EUR/USD trading heavy with US proposals to Iran deadline nearing

• EUR/USD 1.1525-46 EBS, better offered but within 1.1507-41 range yesterday

• Pair essentially sideways after rally from a low of 1.1443 on March 30

• Towards base of 1.1524-55 hourly Ichimoku cloud

• Descending 200-HMA 1.1531 in area, now descending 100-HMA 1.1548

• Continued heaviness should see pair fall below is ascending cloud

• Chunky option expiries in area today - 1.1450-85 total E1.9 bln

• 1.1500 E1.9 bln, 1.1520-50 E2.8 bln, 1.1575-1.1600 E4 bln, more on 1.16

• EUR/JPY 184.27-40 EBS, buoyant, holding below 184.65 high March 27

• Above its 183.49-83 daily Ichimoku cloud, ascending 100-DMA 183.15 below

• EUR/GBP last indicated between 0.8718-29

• At top of 0.8702-25 descending daily Ichimoku cloud, 100-DMA 0.8709 in cloud

• Today sees 0.8700 E600 mln option expiries, also E691 mln between 0.8740-60

• EUR/CHF 0.9210-22 EBS, in area of 0.9219 100-DMA, below 0.9273 200-DMA

• Smattering of option expiries today between 0.8995-0.9010, at 0.9180

• Related comments , , also

• On ECB , for more click on [FXBUZ]

EUR/USD:


EUR/JPY:


EUR/CHF:

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

• AUD/USD -0.2% Tue in subdued trading amid continued U.S.-Iran war anxiety

• WTI trading above $113 a barrel in Asia, spot premiums at all-time highs

• Iran rejects Pakistan's ceasefire proposal as Trump's Tues deadline looms

• AU Feb household spending +0.3% m/m (prior +0.3%), data now less relevant

• AUD pushing lower hourly Bollinger band, further downside progress difficult

• Range Asia 0.69015-225, support 0.6834 0.6660, resistance 0.7188 0.7282
AUD Hourly Bollinger Study & DXY Daily 55-DMA

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

• Middle East conflict remains the main focus in FX, other markets

• No end in sight yet, crude oil higher, stagflation concerns

• USD/JPY in stasis on 159, Asia 159.63-72 EBS, quiet so far

• Upside capped by threat of Japan FX intervention, especially 160+

• Downside limited, bids from Japanese importers, others on dips

• Good support pre-159.00, today sees $807 mln option expiries at strike

• Some at 158.00, 160.00-05 $737 mln, 160.25 $650 mln, 160.50 $761 mln

• JGB-US Treasury rate differentials well below recent wides

• Differential in 2s last @246 bps, in 10s @193 bps, to narrow more?

• Related comments , , also

• US markets , , ,

• On Iran war , Fed , US economy

• Also , on BOJ , for more click on [FXBUZ]

USD/JPY:


JGB-US Treasury 10-year interest rate differential:

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

• AUD/USD +0.5% wtd as markets struggle to process U.S.-Iran war status

• Ceasefire framework proposed by Pakistan rejected by Iran

• Trump continues to threaten Tues deadline for Iran infrastructure attacks

• Oil rises in volatile trading on reality of medium-term supply challenges

• Futures now imply 72% chance of RBA May rate hike; AUD remains news reactive

• U.S. Mar non-farm payrolls exceeded expectations at +178k (poll +60k)

• Overnight range 0.69061-375, support 0.6834 0.6660, resistance 0.7188 0.7282
AUD Weekly 52-WMA

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

Morgan Stanley Research previews the FOMC minutes from the March meeting on Wednesday.

"Chair Powell's press conference and Fed-speak since then suggest that the heightened uncertainty because of the Middle East conflict means cuts are likely delayed. With increased uncertainty, the minutes will likely address a range of more hawkish and more dovish scenarios. These minutes probably will include discussion of the conditions that would cause the Fed to raise rates," MS notes.

"We are also curious about how broad the consensus is among Fed officials that the FOMC should look through oil price increases. The press conference was dominated by questions on inflation; we expect a bit more focus on the growth effects of oil price changes in the Minutes," MS adds.

The dollar index eased slightly on Monday as investors tempered recent war concerns to await U.S. President Donald Trump's deadline for Iran to come to an agreement.

In its response to the U.S. proposal, Tehran pushed back against pressure to swiftly reopen the Strait of Hormuz under a temporary ceasefire, saying it wanted a lasting end to the war, in a response that consisted of 10 clauses, including an end to conflicts in the region, a protocol for safe passage through the strait, lifting of sanctions, and reconstruction.

President Donald Trump, who has threatened to rain "hell" on Tehran if it did not make a deal by 8 p.m. EDT Tuesday (midnight GMT) to open the vital route for global energy supplies, rejected the Iranian proposal as "not good enough" and said his deadline was final. The ISM said its nonmanufacturing purchasing managers' index slipped to 54.0 last month from 56.1 in February and compared to the Reuters consensus forecast of 54.9.

The ISM survey's measure of prices paid by businesses for inputs soared 7.7 percentage points to 70.7, the highest reading since October 2022. This gauge has remained above 60 for 16 straight months, and the percentage increase was the largest in more than 13 years. The ISM price gauge was the kind of data that could produce further struggles for EUR/USD -- especially if PCE and CPI due later in the week corroborate the story of rising inflation -- though the euro was up on Monday. USD/JPY was holding a slight bullish tone above the Tenkan-sen. GBP/USD has support ahead of the March 31 low but needs a move above the 21-DMA and last week's high to build momentum. In AUD/USD's bounce, there are some reasons for bulls to feel comforted.

U.S. Treasury yields were 1-2 basis points lower across maturities with the 2s-10s curve flattening slightly.

The S&P 500 was trading 0.37% higher in New York afternoon.

WTI crude oil rose 1.54%.

Copper was up 0.38%.

Gold eased 0.28%.

Heading toward the close: EUR/USD +0.18%, USD/JPY +0.08%, GBP/USD +0.4%, AUD/USD +0.53%, =USD -0.33%, EUR/JPY +0.34%, GBP/JPY +0.43%, AUD/JPY +0.5%.(Burton Frierson)

• NY opened near 0.6925 after 0.6878 traded overnight, rally extended in early NY

• Upbeat risk sentiment weighed down the US$; stocks, gold, silver moved upward

• Oil and USD/CNH traded heavy in early NY; AUD/USD rallied to 0.6938

• US$ then firmed & risk soured after Iran rejected proposal to end hostilities

• Risk further soured on the latest comments on Iran from President Trump

• Gold, silver turned lower, stocks traded downward, USD/CNH lifted off its low

• AUD/USD fell to 0.6906, traded near 0.6915 late, traded up +0.44% in NY's afternoon

• Pair fell back below the 10-DMA which gives bulls some concerns

• Rising daily, monthly RSIs, hold above the daily cloud base gives bulls some comfort
audusd


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

Credit Agricole CIB Research previews the US March CPI report on Friday.

"We expect a sharp acceleration in US CPI in March, driven by the energy component. We have the headline index at 330.47 (3.34% YoY), with core at 0.30% MoM SA. This is almost a 100bp acceleration in headline, from the 2.4% YoY marks recorded in January and February," CACIB notes.

"Within core, we expect a relatively solid core goods component around 0.28% MoM SA, with namely used cars around 0.4% MoM SA. We expect services around 0.32% MoM SA, with airfares around 2-3% MoM SA (with more to go over the coming months and quarters)," CACIB adds.

USD/JPY may ultimately continue along the path of least resistance, with underlying fundamentals still favoring the dollar and a favorable risk tone on Monday underpinning yen crosses.

The yen remains defensive amid a combination of elevated oil prices, continued Bank of Japan accommodation, and lingering fiscal concerns tied to expansionary policy. While rising yields have renewed interest in owning JGBs, the steeper yield curve has yet to translate into sustained yen support as the BOJ keeps policy rates anchored near zero. Reports that the BOJ may be increasingly concerned about the growth impact of higher oil linked to the Iran conflict add uncertainty around the prospects for an April rate hike. That conflict itself risks further escalation ahead of President Donald Trump’s Tuesday deadline for potential U.S. strikes.

By contrast, the dollar continues to benefit from inflation concerns and haven demand. As such, USD/JPY risk reversals show little sign of either short-term or longer-term yen support.

Still, USD/JPY is not likely to move sharply higher given intervention risks above 160 and a BOJ policy meeting later this month.

For now, fundamentals argue for the pair remaining in an uptrend. That view could change quickly given elevated convexity. A close below its nearby 21-day moving average at 159.11 and 158 pivot level would help neutralize bullish momentum, shifting focus toward cloud resistance near 155.77.
Yen


JPY riskies


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

Nomura Research discusses JPY outlook and the scope for intervention.

"Since USD/JPY briefly rose above 160 last Friday , the Japanese authorities have stepped up verbal intervention . While growing caution over actual intervention is seen as limiting further upside in USD/JPY, unless there is a clear improvement in the Middle East situation and a more substantial correction in crude oil prices, upward pressure on USD/JPY is likely to persist,": Nomura notes.

"Fundamentals, including the BOJ Tankan, also remain solid , and if this week’ s BOJ branch managers’ meeting increases the likelihood of an April rate hike, JPY is likely to find near-term support. On the level at which intervention may occur, caution is warranted over the possibility of actual JPY-buying intervention in the 161–163 range," Nomura adds.

GBP/USD is receiving a welcome lift as risk sentiment improves on hopes that a peace deal can be reached before President Donald Trump’s Tuesday evening deadline for potential attacks on Iranian infrastructure, but the outlook remains troubled for sterling.

The pair is finding initial support ahead of the 1.3000–1.3150 congestion zone from late last year, helping to slow the two-month downtrend. Unrelated to geopolitical developments but supportive for bulls, sterling is also entering its seasonally strongest month in April.

That said, the broader backdrop remains challenging. Escalating conflict that keeps oil prices elevated and bond markets defensive tends to undermine GBP, as the USD captures the bulk of the haven flows. Rising global yields also rekindle concerns around the UK’s fiscal position. USD strength is reinforced by a hawkish stance from Fed officials amid persistent inflation risks. Monday’s ISM services survey showed ongoing expansion, with the prices paid component hitting its highest level since 2022. This week’s inflation slate, including Thursday's February core PCE and Friday’s March CPI, adds further event risk.

For GBP to reverse its bearish trend, stronger technical confirmation is required. Extremely bearish risk reversals and elevated option convexity suggest scope for a sharp, mean-reverting bounce.

Still, the pair must first reclaim the falling 21-day moving average at 1.3326 and challenge layered resistance below 1.35. A sustained break above 1.35 would tilt momentum back in favor of bulls; failure to do so risks a renewed test of key support just above 1.30, including the two-year ascending trendline.
GBP


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

ANZ Research previews this week's RBNZ April meeting and NZD outlook.

"We continue to expect a single 25bp rate hike from the RBNZ this year in December. While a hold is fully priced at the RBNZ’s 8 April meeting, any change in tone, particularly around the implications of the Middle East conflict will be important for near-term rate expectations. Nonetheless, global risk sentiment is likely to remain the dominant driver of NZD in the near term," ANZ notes.

"Further increases in energy prices would also weigh on the currency via its terms of trade, given New Zealand’s status as a net energy importer. With geopolitical tensions likely to remain elevated in the near term, we see scope for mild downside pressure in NZD/USD over the month ahead,' ANZ adds.

Goldman Sachs Research previews this week's RBNZ policy meeting and NZD outlook.

"This week’s RBNZ meeting seems unlikely to encourage further hawkish repricing across markets...Against a backdrop of much more hawkish reactions to oil price shocks from other G10 central banks, the RBNZ has sounded consistently dovish," GS notes.

"Without domestic policy support, we expect NZD to continue to trade in step with US yields for now. Despite the inflation-driven nature of the rise in 10y yields and tightening in FCI, the currency remains vulnerable to rising yields...

While the market has shown only limited signs of pricing in a larger hit to global growth, NZD is still likely to see weakening pressure from more persistent upward pressure to oil prices," GS adds.

• EUR/USD hit 1.1506 in Asia, buyers emerged, 1.1569 traded in Europe's morning

• NY opened near 1.1545, the pair traded up +0.15% in early action

• Broad-based US$ selling lifted the pair, hopes for US-Iran deal weighed down the US$

• Drops in oil, USD/CNH helped buoy EUR/USD; gold, equity gains also helped the lift

• Some US$ buying into NY's open helped EUR/USD drop from its overnight high

• EUR/USD fell back below the 10- & 21-DMAs which could be concerns for bulls

• US March non-mfg PMI & Pres. Trump's Tuesday deadline for Iran deal are key risks
eurusd


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

• AUD/USD rallied 0.6878-0.6935 overnight, NY opened near 0.6925, up +0.64%

• US$ slid on report US, Iran received plans to hostilities, immediate ceasefire

• Oil , USD/CNH fell while gold, silver, stocks rallied on improved risk

• AUD/USD rallied away from the daily cloud base and above the falling 10-DMA

• A bullish outside day candle formed, RSIs are rising, techs lean slightly bullish

• US March non-mfg PMI is a risk, response may be muted due to holiday thinned market

• Pres. Trump's deadline for Iran to agree deal by Tuesday night also looms
audusd


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