• GBP upside has largely been a by-product of legacy shorts unwinding

• With little in the way of new news, the bear bias has become stale

• Keep in mind, GBP is a high yielder, thus expensive to hold short in quiet times

• That said, with the BoE is an easing cycle, focus will be on incoming data

• In particular, the data to watch in the UK jobs and CPI

• Given that a Dec cut is near fully priced, the 2026 outlook matters more

• With 50bps of easing priced by April, there is room for a dovish repricing

• Resistance in cable sits at 1.3368 (100DMA). Support = 1.3200
GBP daily chart


Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

• USD/JPY and most JPY crosses remain on back foot in Asia, trends down?

• USD/JPY 155.23 to 154.94 EBS after bounce from 154.51 low yesterday

• Japanese importers, other good buyers into Tokyo fix, off thereafter

• USD/JPY pivoting around flat, hourly Ichimoku kijun at 155.02

• Resistance from 155.32-59 descending hourly cloud, 100-HMA 155.41 in cloud

• More resistance at descending 200-HMA at 155.88, 156.00 now seen cap

• Massive option expiries today at 155.00 providing some gravitational pull

• This especially the case on narrowing Japan-US rate differentials

• FX intervention threat on USD/JPY moves higher too

• FinMin Katayama emphasized agreement with BOJ on policy, won't hinder hike

• EUR/JPY 180.55-71 EBS, tad heavy but essentially sideways in lofty range

• GBP/JPY 206.45-80, also holding below 207.35 yesterday, best since July '24

• AUD/JPY most buoyant, 102.38-60, high yesterday 102.84, best since July '24

• Related comments , , also

• Katayama-speak , , on Japan data

• On JGB yields , 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)

• AUD/USD +0.1% Fri, threatens break of 0.6630 resistance zone

• All 38 economists polled by Reuters expect OCR on hold Tuesday

• RBA statement may fuel AUD rally toward 2025 0.6707 high

• Lower than forecast U.S. initial jobless claims underpinning UST yields/DXY

• U.S. Sep personal consumption data & core PCE price index due Fri

• AU Nov employment data due Dec 11 (prior +42.2k jobs, 4.3% unemployment)

• Range Asia 0.66055-175, support 0.6415 0.6373, resistance 0.6630 0.6707
AUD Daily 200-DMA & DXY Daily 55-DMA

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

• GBP/USD unchanged in Asia after closing 0.2% lower on Thursday

• Mildly positive US economic data, higher Treasury yields spurred p/taking

• But pound retains most of its 1% weekly gain on improved UK economic outlook

• Positive effect of fiscally prudent UK budget continues to support GBP

• Downside limited as dovish Fed rate expectations stay elevated

• GBP resistance 1.3370-80, support 1.3280-90; Asia range 1.33215-1.33315
GBP

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

Dec 5 (Reuters) - USD/JPY has been ratcheting lower after peaking at 157.90 on November 20. The threat of Japanese FX intervention towards 160 and expectations of a Bank of Japan rate hike are among the factors pushing USD/JPY lower. The big question is, can this trend be sustained? Much will depend on how the market reacts following a likely BOJ rate hike on December 19. A hawkish hike could fuel more yen strength. Some players in Tokyo, including a major investment bank, are already eyeing another hike in January and possibly a follow-up move in July.

Totan Research/ICAP shows a 93% chance of a hike in December but only 4% in January and 7% in March. Expectations for June 2026 then rise to 25%. No data is available for July yet.

While contingent on BOJ expectations following the December meeting, the clear narrowing of Japanese government bond and U.S. Treasury rate differentials and the effect on USD/JPY cannot be denied. The two-year yield spread has fallen to 246

basis points this month from a peak of 517 bps in October 2023. The 10-year differential was at 214 bps Thursday from 355 bps on January 15 and 412 bps at its October 2023 peak. Aside from daily lows, USD/JPY has no meaningful support ahead of its daily Ichimoku cloud currently between 149.97-151.74, which appears to be the target for USD bears.

Related comments , . For more click on [FXBUZ]

USD/JPY daily:


JGB-US Treasury 10-year interest rate differential:


Japan's inflation and interest rates:

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

• AUD/USD steady Fri after rallying 2.9% from Nov 21 0.6422 low

• Pair targets 0.6630, break above will spur next leg of late-year upswing

• RBA monetary policy meeting outcome Tue, OCR expected to remain at 3.60%

• Lower than expected U.S. initial jobless claims supporting UST yields/DXY

• U.S. Sep personal consumption data & core PCE price index due Fri

• Range Asia 0.66055-115, support 0.6415 0.6373, resistance 0.6630 0.6707
AUD Daily 55-DMA

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

• Australia's gold sub-index rise as much as 2.6% to 17,558.20, their best intraday session since November 27

• Gold prices were steady on Thursday, as rising U.S. Treasury yields offset support from a weaker dollar [GOL/]

• Gold miners Genesis Minerals and Evolution Mining advance 1.4% and 1%, respectively

• The sub-index, however, is down 2.1% in the week so far

• AXGD has risen over 100% this year, including day's moves

(Reporting by Roshan Thomas in Bengaluru)

• NZD/USD -0.25% from Thur 0.5778 high as traders moderate Fed rate cut bets

• UST yields firmed after U.S. initial jobless claims printed 191k (poll 220k)

• DXY finished +0.2% Thur but remains under pressure ahead FOMC Dec 10

• U.S. Sep personal consumption data & core PCE price index due Fri

• NZ Nov electronic card retail sales due Dec 11 (prior +0.2% m/m, +0.8% y/y)

• Range NZ 0.5761-725, support 0.5580 0.5485, resistance 0.5801 0.5844
NZD Daily 55-DMA


DXY Daily 55-DMA

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

Overview: CA argues that Sanae Takaichi’s policy stance makes sustained JPY weakness politically undesirable, creating medium-term downside asymmetry for EUR/JPY.

Crédit Agricole highlights that Takaichi “does not want a weaker JPY,” noting it would erode household purchasing power, lift inflation expectations and risk political blowback.

They add that weaker JPY would increase US import costs and potentially irritate the Trump administration, strengthening the case for intervention as a backstop for JPY longs.

Unlike Abenomics, CA stresses that inflation is already above target, rate differentials are narrowing, and Sanaenomics could fuel repatriation flows, especially if Japan’s GPIF reallocates to domestic assets — all factors that make strategic EUR/JPY shorts a top trade for 2026.

• AUD/USD -0.2% from Thur 0.6624 high, but still holding 1.0% gains wtd

• U.S. initial jobless claims 191k (poll 220k), lowest since Sep 2022

• UST yields slightly higher, but claims data unlikely to impact FOMC outcome

• DXY looks set to break 9-day losing streak, +0.2% in late trading Thur

• AUKUS review reveals U.S. supportive of biggest ever AU defence project

• AUD drifting from upper hourly Bollinger band, likely supported 0.6600-05

• U.S. Sep personal consumption data & core PCE price index due Fri

• Overnight range 0.6603-24, support 0.6415 0.6373, resistance 0.6630 0.6707
AUD Hourly Bollinger Study


DXY Daily 55-DMA


AUD Daily 200-DMA

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

• NY opened near 0.6615 after AUD/USD neared 0.6620 overnight, pair fell early

• 0.6603 traded after US weekly, continuing claims came in below estimates

• US yields & US$ firmed are the reports; UD/CNH rallied to 7.0705

• AUD/USD buyers emerged however, 0.6624 with help from AUD/JPY & gold rallies

• The pair pulled back slightly, it neared 0.6615 late, traded up +0.22% in NY's afternoon

• Techs are bullish; RSIs are rising, 2-month high hit, pair above trend line off 2021 yearly high
audusd


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

Overview: JPM notes muted reaction in CHF markets following Swiss CPI, with pricing still showing low odds of the SNB returning to negative rates. They highlight USD strength returning after weak ADP data and speculation over Hassett for Fed chair, but see little urgency to chase CHF here.

JPM says they are “patiently await[ing] a dip to buy in EURCHF,” with USDCHF holding firm around 0.7990/00 despite renewed USD demand.

Systematic funds have extended CHF selling to 8 of the last 11 sessions, reinforcing their bias to accumulate EURCHF on weakness rather than chase higher.

For now they see no immediate catalyst, keeping a tactical wait-to-buy stance.

• EUR/CHF track risk assets higher to hit 2-month highs

• Plethora of hurdles between 0.9350/72 cap for now

• But a break above will open the door to 0.94

• Potential Russia/Ukraine truce by year-end should help support

• Consequently, risks continue to lean higher for the cross

• While dips are limited to 0.93 unless risk assets sell-off
EURCHF daily chart


Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

Overview: MUFG has revised its year-end EUR/USD target lower to 1.1800 from 1.20 after the pair failed to materially advance through November.

They note the month saw the narrowest trading range since Sept 2024, reflecting mixed US-EU macro currents and uncertainty caused by the US data blackout.

With key labour prints only arriving after the Dec 10 FOMC, MUFG sees limited catalysts in the very near term.

MUFG highlights that the ECB remains comfortable with current policy, with officials repeating that stance is “in a good place” as inflation nears 2%. Without a stronger data impulse, EUR/USD upside looks capped through year-end.

EUR/USD is likely to maintain its upward momentum as investors lean toward the Fed delivering dovish signals next week and further dollar weakness.

U.S. weekly and continuing claims reports showed a surprising declines. Weekly claims came in at 191k versus estimates for 220k while continuing claims printed at 1.939m against estimates of 1.961m and the prior week's downward revised 1.943m. However, investors may believe the data may not accurately reflect the labor market's health due to the shortened reporting period caused by the Thanksgiving holiday. Investors may be giving more credence to Wednesday's November ADP employment report highlighting a significant deterioration in job growth as well as Thursday's Revelio Labs report indicating a loss of 9,000 jobs in the same month.

After Thursday's employment reports the spread between U.S. and German two-year yields widened only slightly, which has not been sufficient to drive EUR/USD lower. Additionally, expectations surrounding potential Federal Reserve rate cuts have remained stable, with an 87% probability of a 25 basis point cut next week and a 27% probability for another 25bps cut in January, according to CME's FedWatch tool.

The technical indicators support a bullish outlook for EUR/USD, as rising relative strength indices (RSIs) and the pair's hold above the 55-day moving average suggest that upward momentum is intact. Overall, the combination of technical factors and potential for dovish Fed sentiment indicate euro gains against the dollar.
eurusd


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

Overview: CA highlights 2025 as a year defined by US exceptionalism, persistent USD dominance, and limited progress in EUR as an investment currency. 

Crédit Agricole outlines five key lessons:

• US exceptionalism remains intact, supported by “record portfolio inflows into the US so far in 2025”, resilient economic performance, and further FDI inflows expected into 2026.

• Short-USD hedging remained limited due to elevated hedging costs, despite some rise in de-risking flows.

• USD is still the reserve currency of choice, dominating cross-border payments and benefiting from policy initiatives like GENIUS that could boost USD-asset demand.

• EUR is not yet an investment currency, weighed down by weak growth, French political risk, tariff vulnerability & slow technological catch-up.

• Gold proved the real safe haven, outperforming amid geopolitical uncertainty and debasement fears, while CHF remained the strongest fiat safe haven and JPY struggled—though repatriation may help in 2026.

Overview: BofA sees structural JPY weakness persisting while EUR/USD strengthens toward 1.22 on medium-term convergence themes.

BofA summarizes their directional stance as: “(USD/JPY 155) – bearish: structural outflows continue… BoJ hikes risk being pushed back.” Fiscal uncertainty and Japan’s persistent outward investment bias keep USD/JPY supported.

On EUR/USD, they expect appreciation to 1.22 by end of 2026, noting “growth convergence, FX hedging & a low bar for reform surprises keep us bullish medium-term,” even if near-term catalysts are limited.

• U.S.-listed shares of Canadian miner First Majestic Silver

down 1.5% to $15.45 before the bell after debt-refinancing capital raise

• AG late Weds announced pricing private offering of $300 mln 0.125% convertible bonds (CBs) due 2031

• Initial conversion price set at $22.36, a 42.5% premium to shares last close of $15.69

• AG's U.S.-listed shares on Weds closed down 1.4% after co launched the offering to repurchase a portion of its $230 mln outstanding 0.375% CBs due 2027, among other purposes

• Through Weds, shares up ~186% YTD

• Meanwhile, spot silver down nearly 2% on Thurs as investors look ahead to next week's U.S. Fed meeting
(Lance Tupper is a Reuters market analyst. The views expressed are his own)

• Despite the cleansing of legacy GBP shorts in Wednesday's trade

• The support zone (0.8738/69) in EUR/GBP has continued to hold

• Note that the ECB-BoE policy convergence is a caution for bears

• The ECB are on hold while the BoE are lowering rates

• In turn, EU/GB rate spreads suggest it is difficult to chase weakness

• Should see the support zone give way, downside is likely limited to 0.87

• For now, EUR/GBP is in consolidation mode
EURGBP daily chart


Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

• Euro's clearance of 1.1650 emboldens bulls to push for 1.1720/30

• With bearish USD seasonals, this should underpin EUR/USD in the short-run

• Note that the pair remains undervalued vs yield spreads - signals move to 1.1800

• There is still the potential that Russia/Ukraine agree a peace deal by year-end

• If so, this will likely fuel further upside in the pair

• Support now sits at 1.1650 and at 1.1592/1.1610 (200-hour MAs)
EURUSD hourly chart


EUR/USD vs spreads


Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

Dec 4 (Reuters) - Divergent monetary policy from the U.S. Federal Reserve and Reserve Bank of Australia could lift AUD/USD towards 0.70 next year.

The U.S. central bank is expected to reduce rates at least once more before Jerome Powell's term as Fed chair ends next May, beyond the 25-basis-point cut to 3.50-3.75% expected next week.

Additional Fed cuts are expected from June, especially if Kevin Hassett is chosen to succeed Powell.

In contrast, markets see about a 50% chance of Australia's central bank raising rates by 25 bps to 3.85% by May after a hawkish shift in its rate expectations on data showing Australian household spending surged in October.

AUD/USD, which was last at 0.70 in February 2023, rose to a two-month high of 0.6619 on Thursday, courtesy of strong Australian spending data.

Related:
AUDUSD

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

• Shares of Hindustan Copper rise 6.8% to 362.25 rupees

• Set to gain the most since Sept 12

• Shanghai copper hit a record high boosted by a spike in cancellations in warehouses registered with the London Metal Exchange and increasing bets of a Federal Reserve rate cut this month

• Rally comes after the benchmark three-month LME copper notched a record high of $11,540 a ton on Wednesday

• HCPR top gainer on the Nifty Metal index which is trading flat

• Stock up ~46% YTD vs. sub index's ~19% climb
(Reporting by Urvi Dugar in Bengaluru)

• Cable has traded a 24 pip range thus far Thursday; 1.3328-1.3352

• 1.3352 is two pips shy of Wednesday's five-week peak

• Wednesday gains fuelled by soft U.S. jobs data, concerns over Hassett at Fed

• 1.3300 (former resistance level) is now a GBP/USD support point

• Tuesday's base was 1.3180 (lowest level since UK budget on November 26)

• Bbg-Franklin Templeton's Zahn sees 6% UK yields, warns of budget reckoning

GBPUSD

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

• FX options expire at 10-am New York/3-pm London Thursday December 4

• EUR/USD: 1.1500-10 (4.34BLN), 1.1515-25 (820M), 1.1550 (6.1BLN)

• 1.1600 (1.9BLN), 1.1625-35 (454M), 1.1645-50 (2.7BLN), 1.1655-60 (256M)

• 1.1675 (1.8BLN), 1.1695-05 (1.1BLN), 1.1715-25 (1.3BLN), 1.1750 (746M)

• 1.1765-85 (405M), 1.1800 (781M)(Peter Stoneham is a Reuters market analyst. The views expressed are his own)