• Overnight FX option expiry includes Thursday's BoE policy announcement and any related GBP volatility

• EUR/GBP overnight implied vol gives a cleaner read on related GBP risk as GBP/USD distorted by Fed inclusion

• EUR/GBP overnight implied vol only marginally higher from 4.0 to 4.5 — a break-even of 14 to 17 GBP pips either way

• Compared to April 30 BoE: overnight vol nearly doubled from 3.5 to 6.5 when including the event — break-even 12.5 to 24 pips

• Preference seems to be for options expiring early next week to capture any GBP reaction to Thursday's Makerfield by-election result

• Worth noting that EUR/GBP broader implied volatility is at multi year lows - 1-month expiry just 3.1

• Low implied vol reflects low realised volatility inside 0.8600-0.8750 in 2026 - BoE clearly not expected to break that range
EUR/GBP FXO implied volatility


GBP Overnight expiry FXO implied volatility


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

• EUR/GBP has traded a nine pip range thus far Wednesday; 0.86465-0.86555

• 0.86555 is the highest level since June 4 (0.8656 was the high that day)

• UK CPI unexpectedly holds at 13-month low of 2.8% before BoE event risk Thursday

• BoE to keep its policy rate at 3.75%, despite Times shadow MPC voting 5-4 for hike

• UK Makerfield by-election on Thursday too; result expected Friday (by 0400 GMT)

• Streeting says he could challenge UK PM Starmer next week

EURGBP


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

• The cash hedging of soon-to-expire FX option expiries can help to draw/contain the underlying cash price

• There are billions of EUR/USD strike expiries in the vicinity which expire at 10-am New York cut on Thursday

• 1.1550 on 3bln euros, 1.1570-75 on 1.8bln euros, 1.1595-1.1615 on 5bln euros and 1.1625-30 on 2.1bln euros

• The biggest collection is between 1.1640-55 on a massive 10bln euros, before a 1.1700 strike on 1.7bln euros

• Should EUR/USD post a significant post Fed drop then don't ignore a massive 11bln euros of 1.1500 strikes

• Related comment - Reading the Fed through FX options

• Related comment - The Fed can lift the USD, but its unlikely to last
EUR/USD FX option strike expiries June 17-18-19


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

June 17 (Reuters) - USD/JPY could rise to test a 2026 peak despite this week's Bank of Japan rate hike and authorities' worries about yen weakness. The BOJ raised interest rates to a 31-year high on Tuesday in a landmark step in its policy normalisation, signalling readiness to tighten further as it focuses on taming price pressures from the Iran-war-induced energy shock. However, policymakers offered few clues on the timing of the next rate hike. Elevated USD/JPY has seen a 160.26-160.45 (EBS) range on Wednesday, leaving traders on alert for any potential intervention from Japan to shore up the persistently weak currency. However, a lack of action by authorities could help spur yen sales across the board.

USD/JPY remains on course to test the 2026 160.72 peak recorded in April, a break above which would unmask the 161.00 psychological level initially and put Japanese authorities under pressure to act.
Daily Chart


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

• Cable remains on a 1.34 handle after UK CPI unexpectedly holds steady in May

• 2.8% vs 3.0% forecast. 1.3410 is intra-day low (1.3405 was NY session low Tuesday)

• Cooler than expected CPI print is boost for doves opposed to BoE rate hike this year

• Fed rate hold expected at 1800 GMT; Warsh press briefing starts at 1830 GMT

• BoE is expected to keep its policy rate at 3.75% on Thursday; 7-2 MPC vote expected

• UK Makerfield by-election on Thursday; result expected on Friday (by 0400 GMT)

GBPUSD


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

• Shares of Tongguan Gold Group climb 5.1% to HK$2.08

• Chinese gold miner says it proposes to use up to HK$300 mln ($38.30 mln) to repurchase shares in the open market to safeguard the intrinsic corporate value of the company

• The share repurchase, which is to be funded by the company's own resources, is to reinforce management's confidence in the Tongguan's future and underscoring its positive business outlook - co

• YTD, stock down 28.2%, benchmark Hang Seng Index down 5.1%
($1 = 7.8334 Hong Kong dollars)

(Reporting by Donny Kwok)

• GBP/USD consolidates in Asia after closing 0.1% higher on Tuesday

• Traders circumspect as risk events loom; Fed rate decision Wed key

• Traders keen to see if Fed drops easing bias on inflation concerns

• UK May inflation data Wed; CPI expected at 3.0% yr-on-yr, vs. 2.8% in April

• BoE rate decision and April employment data Thu, May retail sales due Friday

• Makerfield election on June 18 awaited as UK political uncertainty rises

• Results likely around 4am-5am BST on Friday

• Support 1.3380-85, 1.3350, 1.3325, resistance 1.3350, 1.3470-80, 1.3500-10

• Tuesday range 1.3391-1.3443, Asia 1.34255-1.34335
UK debt:

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

• AUD/USD flat Wed as market focus trains on FOMC outcome late Wed

• New Fed Chair Warsh speaking post-decision for the first time

• Trump says details on preliminary Iran deal will be published soon

• AUD not gathering momentum despite broader uplift in risk appetite

• Pair vulnerable to downside drift, break below 0.6834 would accelerate move

• Range Asia 0.70641-72, support 0.6834, resistance 0.7089 0.7200 0.7283
AUD Daily 55-DMA


AUD Hourly Bollinger Study & DXY Daily 55-DMA

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

• Australian gold stocks climb as much as 2.6%, their highest level since May 15

• Sub-index rises for a fourth consecutive session

• Gold prices jumped on easing expectations of interest-rate hike from the U.S. Federal Reserve this year, following an interim U.S.-Iran peace deal that lowered oil prices [GOL/]

• Shares of Northern Star Resources and Evolution Mining up around 1.5% each

• Sub-index down ~7%, YTD

(Reporting by Anjali Singh in Bengaluru)

• JPY remains weak with BOJ seen behind the curve, Fed likely more hawkish

• USD/JPY bid before/after bland BOJ policy announcement, seen behind curve

• Government made sure BOJ limited rate hike, EconMin attended BOJ meeting

• Takaichi appointee Asada dissented for hold, more appointees to board soon

• Fed on other hand likely more hawkish tonight despite Warsh as FOMC Chair

• Not a good recipe for JPY, USD/JPY to remain bid, maybe move higher

• FX intervention threat only thing helping to limit USD/JPY upside now

• USD/JPY 160.40-45 EBS so far in Asia after 160.05-48 yesterday

• Eyes on 160.59 high June 11, 160.72 peak April 30, 161.00, stops above all?

• Then 161.96 peak July 3, 2024, massive option KOs at 162.00, then 165.00

• On expiries today, 159.00 $844 mln, 159.65-85 $598 mln, 160.25 $440 mln

• USD/JPY as usual from Japanese importers, foreigners hedging stock purchases

• Related comments , , ,

• And , , also

• US markets , , ,

• On the Fed , , , US-Iran

• On US economy , on BOJ , ,
USD/JPY:

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

• NZD/USD -0.2% Wed after consumer confidence hits lowest level since 2023

• NZ Q2 Westpac consumer confidence index falls to 80.4 (prior 94.7)

• NZ Q1 current account -1.04 bln, Q1 GDP Thur (poll +0.8% q/q, +1.1% y/y)

• Focus moves to new Fed Chair Warsh's first post-FOMC address late Wed

• Trump says preliminary Iran deal detail will be available soon

• NZD's rejection of 0.5867 55-DMA will encourage bears for time being

• Range NZ 0.5830-399, support 0.5680 5580, resistance 0.5990-95 0.6012
NZD Daily 55-DMA

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

• AUD/USD flat Wed as market attention swings from RBA to FOMC

• RBA's Bullock: board did not consider a hike at this week's meeting

• Residual hawkish tone looks slightly contrived after unanimous hold

• New Fed Chair Warsh's first post-FOMC address late Wed will be pivotal

• Details of U.S.-Iran preliminary deal unclear, Trump flags imminent release

• AUD's struggle to break 0.7089 remains in play, drift lower seems likely

• Overnight range 0.70535-79, support 0.6834, resistance 0.7089 0.7200 0.7283
AUD Hourly Bollinger Study & DXY Daily 55-DMA

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

Credit Agricole CIB Research nudge up its Q3 EUR/USD target from 1.12 to 1.14.

"Hopes for a sustained cessation of hostilities in the Middle East and a reopening of the Strait of Hormuz have sunk global energy prices and helped risk sentiment recover. In contrast, EUR/USD has been unable to hold on to its initial gains in the wake of the announcement of the US- Iran ‘deal’. The pair could remain a sell-on-rallies at current levels, in part because of the lingering geopolitical risks ahead," CACIB notes.

"It remains uncertain whether the US and Iran would be able to reach a deal at the end of their self-imposed 60-day negotiation period. To the extent that we do see some normalisation of the flow of energy through the Strait of Hormuz, however, this should cut the risk of renewed oil price spikes and thus the risk of significant EUR/USD downside. We thus nudge up our September forecast to 1.14 from 1.12 previously," CACIB adds.

• GBP$ up a smidge in NY afternoon, +0.16% at 1.3429; NorAm range 1.3443-1.3405

• Early gain on upbeat Mideast peace expectations pared into NorAm EOD

• Upcoming Fed rate announcement on Wednesday, and BoE Thursday stir position curating

• Both c.banks expected to hold this week; for now each seen hiking 25bp in Q4

• Oil lower, futures strips indicate prices to yearend & beyond holding above prewar lvls

• Global inflation may persist as the Strait of Hormuz reopens and oil deliveries resume

• GBP$ res 1.3443/47 Tues high/30-DMA, 1.3496 daily cloud top, 1.3509 May 25 trend high

• Supt 1.3400 psychological lvl, 1.3383 daily low June 12, 1.3304 May 18 trend low

GBP$ Chart:


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

(Adds headline)

• NY opened near 1.1610 after 1.1575 traded overnight, pair fell in early NY

• USD buying helped drive the pair down to 1.1588; EUR/USD buying then emerged

• USD buying abated as US yields & oil added to losses

• Rallies in gold, silver & EUR/JPY helped EUR/USD rally to 1.1620

• The pair pulled back slightly, sat near 1.1610 late, traded up +0.19% late

• Rising daily RSI, pair's move above the 21-DMA are encouraging signs for bulls

• Fed risk Wednesday, investors to focus on Chair Warsh's policy leanings
eurusd


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

• AUD/USD hit 0.7043 in Europe's morning then rallied to 0.7079 in early NY

• The pair then traded within the 0.7064-0.7079 zone for the rest of the session

• Lower US yields , drop in USD/CNH helped AUD/USD lift off its low

• Rallies in gold & silver added buoyancy as did AUD/JPY's rally above 113.50

• AUD/USD traded near flat in NY's afternoon as investors await the Fed Wednesday

• Long legged daily doji, pair above trend line off the Dec. 18 low are bull signals

• Falling monthly RSI, hold below 0.7100 are concerns for AUD/USD bulls though
audusd


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

Bank of America Global Research previews the June FOMC meeting on Wednesday.

"Statement: FOMC expected to keep the policy rate at 3.5-3.75% in June and remove the easing bias from its statement. We don't anticipate any dissents. SEP: higher inflation, lower u-rate, no '26 cuts in median, but a few additional hike dots.

Press conf: Warsh will likely lean dovish in the presser, arguing: i) supply shocks are one-offs, ii) the Fed should be forward looking on AI disinflation, iii) trimmed-mean PCE and wage inflation don't look problematic," BofA notes.

"US rates: A data-dependent, centrist Warsh likely reads hawkish; stay paid 2y rates

USD: 2-way risks. Bigger up-move on hawkish presser, but more likely he reiterates previous bias towards lower rates," BofA adds.

• Cable has traded a 40.5 pip range thus far Tuesday; 1.3391-1.34315

• Those parameters are well within the 1.33065-1.3483 June range-to-date

• UK May CPI data due at 0600 GMT; 3% forecast. BoE MPA, UK by-election Thursday

• UBS sees hawkish Fed tone on Wednesday, expects no easing this year

• British pensions giant B2C reducing US exposure over tech risks

• EU, UK to hold summit on July 22 (10-year anniversary of Brexit vote next week)

GBPUSD


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

Danske Research previews tomorrow's June FOMC meeting.

"Neither we nor markets expect policy rate changes from the Fed at this week’s meeting, or in July for that matter. As such, all eyes will be on Kevin Warsh, his personal views on rates and the economy as well as possible changes to old practices. But even if Warsh lands on the dovish camp of the FOMC, the distribution of individual rate forecasts will still likely shift higher from March," Danske notes.

"We expect Warsh to avoid strong directional forward guidance on Wednesday evening, we also doubt that the meeting will trigger significant level shifts in EUR/USD and/or short-end UST yields. Warsh is likely to land on the dovish side of voter consensus, but the rest of the committee is increasingly leaning towards a neutral (if not tightening) bias. We continue to forecast two rate hikes in Dec26 and March27, while markets price in only one rate hike," Danske adds.

Sterling may find renewed upside in the near-term as Middle East de-escalation, lower oil prices, and shifting monetary policy expectations on both sides of the Atlantic combine to support the pound against the dollar. The recent signing of the U.S.-Iran memorandum of understanding has catalysed a meaningful decline in oil prices, providing broad relief to risk sentiment and potentially alleviating persistent inflationary pressures in the UK and globally. Should the drop in oil accelerate the disinflationary trend, the Bank of England's current hawkish stance — with one rate hike priced in by the October MPC meeting — is likely to soften.

A pivot toward a more dovish BoE policy path would support GBP/USD by relieving fiscal pressures that resulted from the recent surge in UK gilt yields, which heightened market sensitivity to Britain's funding dynamics.

A more accommodative BoE outlook could additionally ease domestic political tensions, as improved UK growth prospects may strengthen Prime Minister Keir Starmer's position within the Labour Party.

On the U.S. side, lower oil and reduced inflation expectations may afford Fed Chair Kevin Warsh room to deliver the rate cuts President Donald Trump has been pressing for, which would likely weigh on the dollar and provide an additional tailwind to sterling.

For now, GBP/USD traders appear comfortable operating within the 1.33–1.35 range, with moves driven largely by U.S.-Iran headlines. Key risks remain, however. The smoldering Hezbollah-Israel conflict could derail fragile U.S.-Iran peace and reignite hostilities, while any delay in lowering UK inflation lower could revive fiscal and political concerns, potentially capping sterling gains above the 1.35 trend-high.
Sterling Chart:


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

Morgan Stanley Research previews the June FOMC meeting on Wednesday.

"We expect the Fed to hold rates unchanged in June, with no dissents. In the statement, we expect new recognition of faster payroll gains. We also expect the FOMC to drop the easing bias, instead saying something like "in considering any adjustments to the target range..." In the SEP, we expect the median dot to show no cuts this year, one cut in 2027, and one cut in 2028. First press conferences can be uneven. There's a greater chance of miscommunication and subsequent correction, in our view," MS notes.

"We expect Warsh to describe an uncertain economic outlook, to point out that heightened uncertainty argues for patience in policymaking, and to say that the FOMC believes the current stance of policy is appropriate. How much guidance he is willing to give is an important question, as he has leaned against guidance in commentary in the past," MS adds.

Goldman Sachs Research previews tomorrow's June FOMC meeting.

"The FOMC is widely expected to drop its forward guidance suggesting cuts at its June meeting. We expect the FOMC to remove the phrase “the extent and timing of additional” in reference to adjustments to the funds rate, though it could also simplify its statement further. We expect the median dot to show no change to the funds rate in 2026, with three participants showing a hike, followed by one cut in 2027 and one more in 2028.  We assume that Warsh will not submit dots," GS notes.

"In the 2026 economic projections, we expect lower GDP growth (-0.2pp to 2.2%) and unemployment (-0.1pp to 4.3%) and higher headline (+1.2pp to 3.9%) and core inflation (+0.6pp to 3.3%).  We expect the 2027 inflation projection to rise 0.1pp to 2.3%, implying little effect of the oil shock beyond this year. We continue to see rate hikes as unlikely but do not expect further cuts until well into 2027," GS adds,

• AUD/USD fell below the 10-DMA, hit 0.7043 overnight on broad-based USD buying

• USD selling then emerged, US yields softened & USD/CNH turned lower

• AUD/USD buying took hold, the pair hit 0.7078, it traded up +0.09% in early NY

• Gains in equities , gold , silver helped underpin AUD/USD gains

• Daily techs lean bullish; RSI turned upward & a daily bull hammer candle formed

• Monthly techs still lean bearish however; above 0.7205/10 may negate bearish signals
audusd


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

• EUR/USD peaked 1.1622 Monday after US/Iran deal news and trades 1.1609-1.1575 Tuesday (EBS), market await Fed for clues

• More large 1.1600 FX option strikes help to contain price action before their 10-am New York cut expiry Tues, larger on Thursday

• Bulls may be encouraged by daily close above 21-dma at 1.1605 and 55-dma 1.1662, but above 200-dma 1.1672 remains key

• Daily cloud adds resistance 1.1629-1.1701 as do a massive $9-billion 1.1640-55 option strikes which expire on Thursday

• FX option implied volatility sits at at 2026 lows - that's consistent with low realised volatility/expectations

• Risk reversals are stepping back from last week's highs, reflecting diminishing demand for EUR/USD downside hedges
EUR/USD daily chart (EBS)


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