Bank of America Global Research discusses the impact of equity-related FX hedging on G10 currencies.

"We have previously argued that equity-related FX hedging may have contributed to yen weakness since 2025. We expand the analysis to cover major currencies. Given the lack of comprehensive statistics on currency hedging and the multiple assumptions required, the results should be interpreted with caution. Nevertheless, it is worth putting this hypothesis on the table.

The impact of FX hedging appears to have been particularly pronounced as a downside pressure on the yen. By contrast, for other G10 currencies (ex-USD), hedging has generally acted as a supportive factor and may have supported cross-yen pairs. In particular, SEK, CHF, CAD, and AUD may have benefited from hedging flows during the latest AI-driven equity rally since 2Q25.," BofA notes.

"Risk-reward favors being long yen given the combination of near-term caution of our US and Japanese equity strategy teams and the risk of yen-buying intervention. We maintain at least a short-term cautious or bearish stance on CAD and CHF and we think the risk is skewed to the downside for CHF/JPY and CAD/JPY. We have recommended selling CHF/JPY," BofA adds.

• USD/CHF has traded a 19 pip EBS range since the European open; 0.8082-0.8101

• 0.8082 is 15 pips above the EBS low since last week's 10-month peak of 0.8139

• Switzerland seeks trade deal with U.S. after initial November accord

• U.S. JOLTS data, consumer confidence index due at 1400 GMT; 7.3M, 94.8 f/c

• Swiss June CPI data due on Thursday; 0.5% YY expected (Reuters poll)

USDCHF


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

Danske Research previews the US jobs report for June (due on Thursday).

"We forecast nonfarm payrolls (released already on Thursday ahead of 4 July) at +100,000, slightly below consensus of 110,000, and unemployment rate steady at 4.3%," Danske notes.

"We still see further strategic upside potential for both US rates and broad USD FX but also see some room for a near-term reversal especially if this week’s labour market data comes out cooler than consensus predicts.

We forecast 2x25bp rate hikes from the Fed (slightly more than markets price in, currently 39bp) but only in December and March (markets have fully priced in the first hike by October)," Danske adds.

• Broad-based USD buying in Asia drove AUD/USD down to a fresh 2-month low

• The pair neared the 200-DMA, it traded 0.6867, buyers then emerged

• USD dropped & USD/CNH fell to 6.7865, gold & silver

rallied

• AUD/USD hit 0.6887 in early NY action, the pair traded up +0.01%

• Daily techs warn shorts; RSI diverged on the low & a long legge daily doji formed

• Monthly techs remain bearish though so rallies may be limited

• US May JOLTS & June consumer confidence are data risks in NY's morning
audusd


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

Gold's price action through June tells a cautious story. A pattern of lower highs — from around $4,540 on June 1, to $4,370 mid-month, to roughly $4,090 on Friday — points to steady selling pressure, with each recovery falling shorter than the last. Whether that reflects sellers running out of steam or consistent supply overwhelming demand remains unclear, but the compression itself is the concern.

The $4,000 an ounce level is proving pivotal. Prices dipped briefly to $3,944 overnight before snapping back, so there could be a buyer below, but it might just be that thin liquidity is simply triggering stop-hunting behaviour.

On the downside, Deutsche Bank's metals desk highlights the next big level being $3,950.00 — coinciding with the approximate position of the July GLD 360 put strike. They cite little support below that level, since gold has held above $4,000 all year — suggesting any breach could leave the market exposed to a sharper leg lower as dealer delta hedging amplifies selling pressure.

Macro headwinds are compounding the technical pressure. ETF outflows continue, with heavy liquidation last week extending into this week. OCBC has revised its gold and silver forecasts lower, citing higher real yields, a firmer USD and sluggish ETF flows as near-term obstacles, even as central bank buying and hedging demand provide a structural floor. Fed rate path uncertainty adds another layer — until clarity emerges on the number of hikes this year, central bank buying can cushion falls but lacks the firepower to drive a sustained rally.

Silver faces similar constraints, with OCBC noting it likely needs gold to stabilise, real yields to ease, or ETF flows to recover before any durable recovery takes hold.

The structural case for gold remains intact for many, but the near-term setup is challenging — ETF flows, and price action, are all pointing in the same direction right now.
XAU=EBS


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

June 30 (Reuters) - USD/JPY could see much bigger gains in the coming sessions due to a lack of action from Japanese authorities. The yen slumped to levels not seen since 1986 on Tuesday, leaving traders on alert for any potential intervention from Japan to shore up the persistently weak currency. Japan reiterated on Tuesday that authorities stood ready to respond to currency moves, keeping the rhetoric unchanged despite the yen's slide to a four-decade low.

Elevated USD/JPY has seen a 161.91-162.41 range, on Tuesday, according to EBS data. Spot could well climb further to test the 163.00 psychological level, a clean and sustained break above which in turn would put Japanese authorities under further pressure to step in. However, FX traders should be aware that the relationship between USD/JPY and EUR/JPY is broken, meaning gains in the cross will likely be limited as it is currently carrying significant euro downside risks. The 30-day log correlation reading between the two currency pairs is very close to zero.
Correlation Chart


Daily Chart


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

• Short-dated USD/JPY option demand rises after USD/JPY breaks 162.00 barriers for a new 40-year high

• Options expiring Friday/early next week most sought — capturing both NFP volatility and possible MoF intervention

• A strong NFP extending USD/JPY gains raises intervention risk — thin holiday liquidity amplifies the threat

• Friday's US holiday thins liquidity sharply — giving MoF the ideal window to weaken USD/JPY with maximum impact

• Traded options include many downside strikes, while risk reversals maintain a high JPY call over put vol premium

• Market clearly wary of intervention risk and Thursday/Friday NFP and holiday window seen as an ideal opportunity
1-week and 1-month expiry USD/JPY FXO implied volatility


USD/JPY 25 delta risk reversals


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

• AUD/USD holds sub-0.69 following Asian session fall to 0.6867 (3-month low)

• 0.69 is a former support point (0.6895-0.6900 option expiries today)

• 0.6860 (April 2 low) and 0.6834 (March 30-31 low) are support levels

• Minutes from June 15-16 RBA meeting were published at 0130 GMT

• RBA held its cash rate unchanged on June 16, after three consecutive hikes

• U.S. JOLTS data, consumer confidence index due at 1400 GMT; 7.3M, 94.6 f/c

AUDUSD


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

• Shares of Australia's Capricorn Metals rise as much as 5.7% to A$13.28, their highest since June 23

• Gold explorer says its unit received Federal Environmental approval for the expansion and operation of the Mount Gibson Gold Project in Western Australia

• The Federal approval allows Capricorn to finalise the primary Western Australian approvals required for the Mount Gibson Project under the Environmental Protection Act 1986 (WA)

• CMM down 11.3% YTD
(Reporting by Keshav Singh Chundawat in Bengaluru)

• FX option strikes expire at 10am New York/14:00 GMT on Tuesday June 30

• EUR/USD: 1.1310-20 (1.7BLN), 1.1345-50 (1.1BLN), 1.1400-05 (5BLN), 1.1420 (1.6BLN), 1.1445-50 (1.2BLN)

• USD/CHF: 0.8075 (302M), 0.8160 (919M)

• EUR/GBP: 0.8660 (178M), 0.8685 (279M)

• GBP/USD: 1.3200 (223M), 1.3245-50 (408M)

• AUD/USD: 0.6895-0.6900 (710M)]

• USD/CAD: 1.4200-05 (785M)

• USD/JPY: 161.00 (590M), 161.25 (450M), 161.50-55 (350M), 162.50 (2.25BLN)

• Mondays daily FX options wrap - Fragile calm as geopolitics and NFP collide (Richard Pace is a Reuters market analyst. The views expressed are his own)

• AUD/USD slips 0.3% Tue as reality of RBA meeting minutes settles

• RBA noted risks of "potentially material weakening" in housing markets

• Traders beginning to conclude RBA tightening cycle may have run its course

• AUD drifting toward 0.6834 support, break below will reinvigorate downswing

• Iran says will not be meeting any U.S. officials in Qatar on Tue

• U.S. Supreme Court blocks Trump from firing Fed Governor Lisa Cook

• U.S. Jun non-farm payrolls due Thur, Reuters poll consensus +110k

• Range Asia 0.68665-89 support 0.6834 0.6660, resistance 0.7089 0.7200
AUD Daily 55-DMA

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

• AUD/USD +0.2% from Tue 0.6867 low as meeting minutes show inflation concern

• RBA sees policy settings as somewhat restrictive to combat excess demand

• Iran says will not be meeting any U.S. officials in Qatar on Tue

• U.S. Supreme Court blocks Trump from firing Fed Governor Lisa Cook

• U.S. Jun non-farm payrolls due Thur, Reuters poll consensus +110k

• Range Asia 0.6867-89 support 0.6834 0.6660, resistance 0.7089 0.7200
AUD Hourly Bollinger Study & DXY Daily 55-DMA

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

• Australian gold miners fall 3.3% to their lowest point since June 12

• Gold prices fell on Monday as fresh U.S.-Iran tensions lifted oil prices and sparked fears of inflation, bolstering expectations of higher interest rates [GOL/]

• Shares of Evolution Mining fall 3.5%, Northern Star Resources sheds 2.8%

• YTD, sub-index down over 19%

(Reporting by Shruti Agarwal in Bengaluru)

• USD/JPY holding bid, refuses to go down, however still capped pre-162.00

• 162.00 option KO defence strong, Japan exporter month/quarter-end sales too

• That said, month/quarter-end Japanese importer, retail-NISA flows too

• Specs also continuing to bet USD/JPY goes higher, large stops 162.00+

• Without Japanese FX intervention, 162 break to see swift move towards 163

• Range so far in Asia this morning 161.91-97, 161.97 high yesterday

• Nearby vanilla option expiries today 161.25-50 $750 mln only

• 162.50 strikes does see $2.2 bln however, below 160.25-161.00 $1.8 bln

• JGB-US Treasury rate differentials tad narrower, in 2s @270, 10s @173 bps

• Related comments , , ,

• Also ,on the Fed

• US markets , , ,
USD/JPY:

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

• NZD/USD +0.4% from Mon 0.5633 low as markets factor in probable RBNZ hike

• Futures pricing now implies 70.5% chance of 25 bps hike on Jul 8

• NZD may consolidate further, but if 0.5627 breaks expect downside extension

• Opposing claims create uncertainty around Tue's Qatar U.S.-Iran peace talks

• U.S. Supreme Court blocks Trump from firing Fed Governor Lisa Cook

• U.S. Jun non-farm payrolls due Thur, Reuters poll consensus +110k

• Range NZ 0.5650-54, support 0.5627 5580, resistance 0.5991 0.6012 0.6093
NZD Daily 55-DMA

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

CIBC Research discusses the USD medium-term outlook and targets the USD Index (DXY) at 100.21 in Q3 and 98.76 by year-end.

"On a forward looking basis, we see the USD rally as being cyclical rather than structural. In the short term we do see risks that the USD can extent slightly further into mid summer. Cyclical sectors of the US economy are beginning to pick up more materially, likely due to a combination of fading tariff uncertainty/impact, large OBBBA tax refunds, and an AI driven CAPEX cycle. This is notable in the labour market, with highly cyclical jobs, hours worked, and wages picking up (second chart). The next leg may be for coincident/lagging sectors to feel some of this uplift, and this could see Fed pricing shift cuts out of 2027 with increased odds of a mid-cycle adjustment. And importantly for the USD is that there is currently a lack of growth elsewhere in the world, with Asia showing some weakness, and Europe dealing with the effects of the energy spike; this accentuates the importance of this small cyclical uplift in the US," CIBC notes.

"These views are central to our bias to fade USD strength within the coming months. We expect the DXY to selloff towards 98 by Q4 of this year," CIBC adds.

• AUD/USD flat wtd, but risk of downside extension lingers

• AUD drift towards 0.6834 seems likely, break below will enliven bears

• RBA Jun monetary policy meeting minutes due for release 0130 GMT Tue

• Iran denies claims that they will meet U.S. officials in Qatar Tue

• U.S. Supreme Court blocks Trump from firing Fed Governor Lisa Cook

• U.S. Jun non-farm payrolls due Thur, Reuters poll consensus +110k

• Overnight range 0.68775-0.6904, support 0.6834 0.6660, resistance 0.7089
AUD Weekly 52-WMA

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

• NY opened near 1.1405 after 1.1380 traded overnight, pair extended its rally in NY

• Early USD selling, rally in equities helped the pair to steadily climb

• EUR/JPY rally toward 185.05 & USD/CNH's drop helped fuel the pair's rally

• EUR/USD neared the 10-DMA, hit 1.1431, it traded up +0.41% in NY's afternoon

• Drops in gold, silver and firmer US yields likely helped limit EUR/USD gains

• Daily RSI is rising but monthly is falling & the pair is still below the 10- & 21-DMAs
eurusd


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

• NY opened near 0.6900 after 0.6904 traded overnight, the pair fell early NY

• Rising USD, US yields & gold, silver, copper drops weighed on the pair

• 0.6878 traded but buyers emerged as USD/CNH sank & AUD/JPY lifted off its low

• Equity rally & some USD selling helped AUD/USD near 0.6890 late in the day

• The pair traded down -0.03% in NY's afternoon and a daily doji candle formed

• Techs lean bearish though; RSIs are falling, pair consolidating recent drop
audusd


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

Citi Research discusses the USD outlook and likes to trade it tactically in the near-term.

"We think you chase USD for a trade, but don't overstay. We forecast EURUSD at 1.13 over the 0-3 month horizon (this is what we expect it can average over the forecast window), but with a asymmetric skew towards lower and potential to touch 1.10 (we would consider this more of a trade target where we would take profit)." Citi notes.

"As a reminder, we maintain our 9m EURUSD 1.14/1.10 put spread that we entered at the start of the year (spot ref 1.1352)," Citi adds.

AUD/USD edged higher Monday, though long-positioned investors remain cautious as the pair hovers near critical support levels ahead of a busy week of U.S. employment data.

The pair is currently consolidating after dropping from its June 15 high — a bearish signal on its own — with that consolidation forming just above the key 0.6834–0.6861 support zone, which contains the 200-day moving average alongside the March and April monthly lows.

The technical picture offers little comfort for bulls. AUD/USD is trading below both the falling 10- and 21-day moving averages, and the monthly RSI points to entrenched longer-term downward momentum.

All eyes now turn to a string of U.S. labor market releases. May JOLTS job openings drop Tuesday, followed by June ADP on Wednesday, and the June payrolls report on Thursday — moved up due to the July 4th holiday on Friday. These reports will be pivotal in shaping the pair's near-term direction.

AUD/USD bulls are counting on softer jobs numbers, which could prompt markets to scale back expectations for Fed hawkishness. That would likely push U.S. yields and SOFR futures rates lower, weighing broadly on the dollar and potentially driving AUD/USD up toward the June high of 0.7190.

Conversely, a strong jobs print would reinforce dollar strength and could send the pair sliding toward the 0.6600 level.
audusd


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

Bank of America Global Research previews this week's US jobs report for the month of June.

"After three solid months, we expect Jun payrolls to also rise by a robust 110k (private: 120k), supported by benign claims and strong ADP data. That said, we see downside risks: May's surge in leisure & hospitality may have been driven by the World Cup or Memorial Day timing, and if it was the latter, Jun could see payback. We could also see a large reversal in local gov't jobs after May's outsized gain. We expect the u-rate to remain at 4.3%, though continued strength in HH employment could push it down to 4.2%," BofA notes.

"A strong report would likely move markets closer to our call for three hikes in '26," BofA adds.

Sterling's near-term path looks better supported than it has in weeks, with cooling geopolitical risk, steadier UK politics and a potentially softer Fed path forming a constructive backdrop for the pound. The pound continued its steady ascent on Monday, rising 0.2% in early North American trading as cable benefited from a cooling geopolitical environment—notably easing U.S.-Iran tensions—and a less-charged UK political climate following Prime Minister Keir Starmer’s resignation. Domestic fiscal anxieties are also abating after Andy Burnham committed to existing UK fiscal rules, a move that supports the recent decline in 10-year gilt yields down to 4.72% from their pre-resignation peaks near 5.2%.

With political and fiscal tumult settling, market focus is pivoting back to monetary policy, making this week’s U.S. payroll data highly scrutinized for near-term Fed clues. While the dollar recently gained ground on expectations of a hawkish Fed in H2 2026, a sharp drop in oil prices could temper inflation expectations and revive a more dovish outlook.

Given the deeply stretched sterling short positioning, a calmer UK outlook paired with a softer Fed could trigger an aggressive short-unwinding surge, driving GBP/USD past its initial technical hurdle at the 10-day moving average near 1.3243. Should this momentum clear Monday's 1.3240 high, bulls will confidently target the 200-DMA and daily cloud base near 1.3400, while solid support remains firmly anchored down at Monday's low of 1.3194 and the crucial June 24 trend low of 1.3140.
GBP Chart:


(Paul Spirgel is a Reuters market analyst. The views expressed are his own)

Goldman Sachs Research discusses JPY outlook and the scope for another round of JPY intervention by Japan's MoF.

"This past week saw USD/JPY trade up close to 162, its highest level since July 2024, when the MoF subsequently intervened..Even with the risk of additional intervention still elevated, the risk that markets continue to press a more hawkish Fed leaves JPY funding relatively more attractive than before. Because as long as Fed expectations are shifting, JPY should be a lower vol funder than the other low-yielders; it tends to have a more muted response when equities and yields are moving in opposite directions," GS notes.

"Overall, a backdrop of higher US yields, low recession odds, as well as lingering domestic fiscal risks alongside only gradual BoJ hikes (which reportedly will come with even greater resistance from the administration than before, given its plan to call for the BoJ to help bolster demand) means that the upward pressure on USD/JPY should persist- as long as policymakers allow it," GS adds