• AUD/USD +0.3% Thur as risk sentiment improves after U.S. & Iran sign MOU

• Brent crude down 1.4%, Gold up 1.5% and equities broadly higher in Asia

• Pair still down significantly from Wed highs as Fed hike expectations build

• 9-Fed policymakers now expect at least one rate hike by the end of 2026

• AUD remains vulnerable overall, break of 0.6834 would confirm trend lower

• Range Asia 0.70135-35, support 0.6834, 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.)

• USD/JPY remained better bid overnight, trading up to 160.79 EBS

• Fed's hawkish hold and strong US retail sales helped

• Seems Fed dot plots now almost assuring market of a rate hike ahead

• USD bid across the board, USD/JPY upside limited on intervention risk

• 161.00 the new line the sand for Japan's Finance Ministry?

• With large stops 161.00+, massive option KOs from 162.00, no doubt?

• BOJ Uchida's presser Tuesday also re-evaluated, take more hawkish?

• Whatever the case, USD/JPY likely to remain in 160 limbo barring FX action

• USD/JPY 160.54-64 so far in Asia, demand still on dips

• Large Japanese importers buys to continue at almost every Tokyo fix

• Offshore investors buying Japan equities to continue to hedge by yen sales

• Nikkei to fresh record high after TSE open despite Wall Street plunges

• Option expiries today to help contain spot action

• 160.00-50 total $4.2 bln, massive at 160.00, 160.50, 161.00-10 $2.3 bln

• Crude oil prices up overnight despite US-Iran deal, doubts peace to last?

• Related comments , ,

• Also , on BOJ , on US retail sales

• US markets , , ,

• On Fed , , ,

• On US-Iran , for more click on [FXBUZ]

USD/JPY:


Nikkei 225:


NYMEX crude oil futures:

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

• Australian gold stocks fall as much as 2.8%, set to log its steepest intraday pct rise since June 11

• Sub-index snaps a four-day winning streak

• Bullion prices reversed course to drop more than 1% after the U.S. Federal Reserve held interest rate steady but hinted at a hike later this year, pushing the dollar higher. [GOL/]

• Shares of Northern Star Resources and Evolution Mining slipped over 2.5% each and were among the worst performers in the S&P/ASX 200 index

• Sub-index down ~8%, YTD
(Reporting by Anjali Singh in Bengaluru)

• NZD/USD -1.0% from Wed 0.58345 high after Fed officials flag FFR hikes

• Better than anticipated NZ GDP update giving some relief to the pair

• NZ Q1 production-based GDP +0.8% q/q (poll +0.8%), +1.5% y/y (poll +1.1%)

• FOMC left FFR range unchanged, but 9-policymakers expect to hike this year

• 2-year UST yields +14 bps, DXY +0.8% and U.S. equities soften in response

• Iran & U.S. both sign MOU, will work on peace agreement detail over 60 days

• NZD targets 0.5681 support after Mon's failure to break above 0.5867 55-DMA

• Range NZ 0.57535-0.5808, 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 -0.9% from Wed 0.70755 high after FOMC leaves FFR range unchanged

• Nine Fed policymakers now expect at least one rate hike by the end of 2026

• 2-year UST yields +14 bps, DXY +0.8% and U.S. equities soften in response

• Preliminary peace agreement signed by both Iran and U.S.

• AUD trading near lower hourly lower Bollinger band, progress lower may slow

• Pair remains vulnerable to downside, break of 0.6834 would accelerate move

• Overnight range 0.6995-0.70755, support 0.6834, resistance 0.7089 0.7200
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.)

Bank of America Global Research previews the June BoE meeting on Thursday.

"We expect the MPC to vote 7-2 for a hold, with Pill and Greene voting for a hike. Pill voted for a hike in April while Greene has recently argued that the case for hikes is growing and noted that risk of acting is less severe than that of failing to act," BofA notes.

"We think there are risks for a 6-3 with potentially Mann (or Lombardelli) voting for a hike, though the guidance from her has been less explicit. Mann's paragraph was hawkish in April where she said she expected greater additional second round effects than in the scenarios and continued rising inflation outturns/expectations can tilt her to a hike. But she has also pointed to tighter financial conditions," BofA adds.

• NY opened near 1.1600 after 1.1617 traded overnight, EUR/USD slid in early NY

• USD buying, US yield gains & USD/CNH lift off its low weighed on EUR/USD

• Rally in oil also helped pressure EUR/USD down, 1.1580 was neared

• The pair lifted slightly as USD buying abated, oil dipped & the Fed decision approached

• EUR/USD fell sharply on Fed removing "easing bias" reference, projected 2026 hike

• USD & yields rallied sharply while stocks, gold and silver traded lower

• EUR/USD fell to 1.1545 shortly after the statement, was down -0.48% into Warsh's presser

• The slide extended to 1.1536 during Chair Warsh's presser as USD buying persisted

• Bears ceded some grornd as USD buying abated, the pair neared 1.1555, was down -0.46%
eurusd


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

• NY opened near 0.7560 after AUD/USD drifted downward in Asia & Europe's morning

• The pair rallied in early NY despite firmer USD yields & USD/CNH's lift off its low

• The pair traded 0.7076 then stalled; gains in gold & silver helped AUD/USD move up

• Drops in stocks & AUD/JPY helped stem the rise but the pair held onto gains

• AUD/USD was in positive territory & sat near 0.7075 ahead of the Fed's policy decision

• Pair spiked lower as Fed removed "easing bias" reference", projections show hike in 2026

• US yields added to gains, stocks , gold & silver moved downward

• AUD/USD hit 0.7040 after the statement, latest SEP was down -0.28% into the presser

• During Chair Warsh's news conference USD buying persisted, AUD/USD neared 0.7030

• The pair then bounced, sat near 0.7055 late, traded down only -0.029%
audusd


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

• GBP$ soft in NY afternoon trade -0.54% at 1.3357; NorAm range 1.3418-1.3350

• Flows light in NY pre-Fed hold, Fed inflation concerns likely keep rates elevated

• UST yields higher owing to high inflation bias; stmt not much different than other c.banks

• Fed projections see 25bp hike in '26, followed by 25bp cut in '27/'28

• Geopolitical concerns ebbing, but remain fluid heading into phase 2; oil holds near lows

• Pair remains anchored near middle of 1.33-1.35 range; Thursday BoE moves into focus

• Today's UK CPI a touch beloow f/c may allow BoE to embark on less-hawkish policy path

• UK 10-yr gilt lower relieves some fiscal angst; post-BoE Makerfield by-election in focus

• GBP$ supt 1.3350 post-Fed hold low, 1.3325 daily low June 11, 1.3293 lower 30-d Bolli

• Res 1.3385 falling 10-DMA, 1.3522 daily cloud base, 1.3481 50% Fib of 1.3658-1.3304

GBP$ Chart:


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

• USD/CAD keeps grinding higher, printing fresh YTD highs at 1.4035

• Warsh’s first Fed presser is the key event risk; tail risk is a hawkish leann

• A hawkish surprise could see USD/CAD probe 1.4100 in short order

• CAD also faces a separate headwind from USMCA uncertainty into the July 1 deadline

• Bias remains tilted higher for USD/CAD near term, with CAD looking set to underperform

• Prior resistance-turned-support sits at 1.3920/67, with the 200DMA below at 1.3820
CAD daily chart


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

Morgan Stanley Research previews the UK labor report on Thursday.

"After a level shift higher in March, we expect the jobless rate to remain at 5.0% in the three months to April, before rounding up to 5.1% in the next month's reading. We forecast a revised April payrolls change at -10k and May at -25k. In addition, we see vacancies as slipping to just below 700k in the three months to May," MS notes.

"On earnings, the AWE data suggests compositional effects are as negative as -0.5pp but there is a decent degree of uncertainty around the data. Mindful of this, we model the private sector regular AWE growth in April just about rounding down to 2.9%3M/Y, with whole economy ex-bonus pay growth coming in at 3.3%3M/ Y. We see total pay growth at 4.0%3M/Y, as some of the recent strength in bonuses as measured by AWE cools," MS adds.

• EUR/GBP holds above recent range lows at 0.8600–20, preserving a modest topside bias

• However, price action lacks conviction as rebounds remain shallow

• Rate spreads & softer energy prices continue to point to higher EUR/GBP

• Despite this, market remains anchored within the well-defined 0.8600–0.8700 range

• Near-term GBP event risk elevated: BoE decision and Makerfield by-election (Thursday)

• Skew of risks leans GBP-negative on potential for a marginally more dovish BoE outcome

• Political backdrop also in focus - by-election fallout hinges on potential leadership pressure on Starmer

• Initial resistance at 0.8650–60, with a further hurdle at 0.8700
eurgbp vs factors


EURGBP daily chart


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

Societe Generale Research discusses USDJPY technical outlook.

"USD/JPY has staged a steady up move after defending a multi-month ascending trend line near 155.50/155 (now at 157). The pair is now challenging the peak of April around 160.70/161.20, which is an interim hurdle. A short-term pullback is likely, the trend line near 157 is an important support," SocGen notes.

"A cross above 160.70/161.20 will be crucial for confirming an extension of the up move. In such a scenario, the next objectives could be located at 2024 high of 162 and projections near 163.70," SocGen adds.

Credit Agricole CIB Research previews today's June FOMC meeting.

"We and the market expect that the Fed should keep its policy rates unchanged in June and remain data-dependent in its policy outlook. We also note that the FOMC's dual objectives of stable inflation and low unemployment have become less misaligned of late, after the US labour market consolidated and thus allowed policymakers to drop their easing bias in April and focus on accelerating US inflation," CACIB notes.

"Turning to the FX market reaction, we start by noting that, at the time of writing, US rates markets are already pricing in c.25bp of hikes by March 2027. This is a more hawkish view than our own and suggests that many Fed-related positives are already in the price of the USD. We also note that the currency is the most overbought G10 currency at present, according to our latest FX positioning data. This could suggest that the Fed would have to deliver a hawkish surprise for the USD to rally once again. At the same time, a potential dovish surprise from Warsh and co, could trigger some profit taking on long USD positions," CACIB adds.

• AUD/USD hit 0.7072 overnight, sellers emerged, the pair turned lower

• Pair neared the 10-DMA & trend line off the Dec. 18 low, 0.7055 traded

• AUD/USD traded down -0.12% in early NY and ahead of the Fed decision

• USD buying, firmed US yields , USD/CNH gains weighed on the pair

• Drops in gold, silver and AUD/JPY also helped send AUD/UD downward

• The pair held within the June 15 range, suggests gains are being consolidated

• Falling monthly RSI, hold below resistance near 0.7100 are concerns for bulls

• US May retail sales, pending home sales are data risks in NY's morning
audusd


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

• 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)