Synopsis:

CIBC reacts to the latest June inflation data from the US and Canada, noting modest signs of underlying strength but little evidence yet of significant tariff passthrough. The bank expects the Fed to stay on the sidelines and the BoC to remain cautious, likely delaying any rate move until the fall.

Key Points:

• US CPI: Headline inflation rose 0.3% m/m (2.7% y/y) with energy prices rebounding. Core CPI was softer at 0.2% m/m (2.9% y/y). Core goods inflation remains low at 0.7% y/y while core services run at 3.6% y/y.

• Tariffs: Businesses are still working through pre-tariff inventories, limiting passthrough for now, but CIBC expects more visible effects ahead, keeping the Fed cautious.

• Canada CPI: Headline rose 0.1% m/m (1.9% y/y). Core measures (trim, median) remain elevated at ~3% y/y. Shelter costs climbed on volatile rent increases. Core goods inflation remains firm, likely reflecting FX effects and early tariff impact.

• BoC Outlook: On the back of solid jobs data and sticky core inflation, CIBC sees the BoC pausing in July, preferring to gather more data on cost pressures and tariff impacts before acting, likely waiting until the fall.

Conclusion:

Both US and Canadian inflation reports for June suggest steady but manageable price pressures. While tariff passthrough is limited for now, inventories are thinning, raising future risks. CIBC expects the Fed to hold steady and the BoC to stay patient, watching how inflation and trade uncertainty evolve over the coming months.

• Overnight expiry FX options get Tues' U.S. and Wed's UK inflation data

• Related implied volatility is higher to reflect realised volatility risk

• Overnight expiry implied volatility is 2.0 above last weeks 10.0 average

• Premium/break-even at 12.0 is 67 USD pips vs 56 USD pips at 10.0

• Not excessive but reflective of risk. GBP put demand said to trump calls

• Shows traders more wary of the downside risk to spot/volatility post data

• USD call demand evident for US CPI. GBP downside risk premium 4-month high

• Related comment - Month-end volatility warning shouldn't go unheeded
GBP/USD risk reversals


Overnight expiry FXO implied volatility

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

• U.S.-listed shares of gold miners up premarket, tracking rise in bullion prices [GOL/]

• Spot gold up 0.6% at $3,361.46/ounce as concerns over the global trade war fuelled demand for safe-haven assets, while investors awaited a key U.S. inflation reading

• The U.S. dollar was down 0.1%, making gold cheaper for buyers holding other currencies [USD/]

• Top miners Newmont and Barrick Mining

each up marginally

• South African miners Gold Fields and Harmony Gold

each rise ~1%, AngloGold Ashanti up 2.9% and Sibanye Stillwater rises 1.4%

• Canadian miners Agnico Eagle Mines up marginally and Kinross Gold up ~1%

(Reporting by Pooja Menon in Bengaluru)

July 15 (Reuters) - EUR/USD traders shouldn't expect too much to happen now that they are well-prepared for the pair to rise further following a 1.0125-1.1830 surge that has forced a huge adjustment in betting, hedging and expectations.

When EUR/USD first began to rise traders were betting around $9 billion that the euro would drop, but they are now gambling almost twice that sum on the euro rising.

While this big wager didn't stop the pair from rising to a 2025 high at 1.1830 at the beginning of July, it will provide a significant restraint on the pair rising further.

The significance of a better-prepared market is already evident in the marked slowdown in the pace of the rally, which took about four months to span 1.0125 towards 1.1600 and roughly two and a half months to reach 1.1830.

Bets on a bigger rise have grown by roughly $2 billion since EUR/USD reached its 2025 high on July 1, and the pair has dropped to 1.1650.

Many of those betting on a rally are making money and therefore may be more inclined to book them now that momentum is ebbing and volatility has slumped.

The drop in volatility - which has halved - suggests option traders are also now much better prepared for EUR/USD to rise, and no longer need to buy more cover for that eventuality. Quiet markets will raise the importance of the marked difference in U.S. and euro zone interest rates. This may encourage investors to sell to bank returns derived from them (carry trades) during any quieter period. While both fundamental and technical reasons for the rally remain intact, which may limit the extent of any drop, bigger, and certainly rapid gains, are less likely.

For more, click on [FXBUZ]

EURUSD , betting and volatility

(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• EUR/USD dips have been shallow throughout this year's 1.0125-1.1830 rise

• Momentum has ebbed as rise has extended and traders grow longer

• Traders are now prepared for a bigger rise that the majority expect to see

• Without an unexpected trigger any rise is likely to evolve slowly

• Diminishing chance of quick or bigger profits may spur profit taking

• Correction to 1.1538 may be foundation of a bigger rise

• Significant levels around 1.20 will be difficult to overcome

•
EURUSD

(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• Cable consolidates losses to 1.3422 before U.S. June CPI data at 1230 GMT

• 1.3422 is lowest level since June 23 (1.3373 was low that day)

• Drop to 1.3422 spurred by dovish guidance from BoE chief in The Times Monday

• Bailey-larger rate cuts possible if jobs mkt shows pronounced slowdown signs

• GBP/USD might extend south if U.S. core CPI data is hotter than expected

• 0.3% MM, 3.0% YY forecast. UK retail spending bounced back in June, BRC says

GBPUSD

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

• Shares of Many Peaks Minerals rise as much as 7.8% to A$0.83, marking their best session since July 8

• Stock currently up 5.8% at A$0.815

• Gold-copper miner confirms presence of a higher volume of gold at its Ferké gold project in Cote d’Ivoire than found in previous drilling exercises

• One area among the newly drilled zones shows a 26% increase in the width of the gold target, among other results showing expansion of the site

• Around 429,731 shares change hands, compared with the 30-day avg trading volume of about 310,956

• Session lifts YTD gains to 315%

(Reporting by Shruti Agarwal in Bengaluru)

• Traders watch U.S. inflation data for signs of tariff impact

• Fed has said CPI may rise in U.S. summer as it held off cutting rates

• Aussie dollar, yuan shrug off resilient Chinese GDP figures

(Updates prices ahead of European markets open)

By Kevin Buckland

TOKYO, July 15 (Reuters) - The dollar hovered near a three-week high versus major peers on Tuesday as traders awaited the release of U.S. inflation data later in the day that could provide clues on the path for monetary policy.

The U.S. currency was also buoyed by elevated Treasury yields, with investors weighing a potential exit of Jerome Powell from the Federal Reserve as President Donald Trump continued his criticism of the central bank chairman.

Currencies showed little reaction to data showing China's economy grew 5.2% last quarter, slightly topping analysts' forecasts.

Bitcoin drifted further from Monday's all-time peak of $123,153.22 following a seven-day, 14% surge as investors bet on long-sought legislative policy wins for the cryptocurrency industry this week. It was changing hands at around $117,550 as of 0520 GMT.

The dollar was little changed at 147.62 yen , after earlier rising to the highest since June 23 at 147.89 yen.

The dollar index , which tracks the currency against the yen, euro and four other major rivals, eased slightly to 98.003, not far below the overnight peak of 98.136, the highest since June 25.

The euro edged up to $1.1681, after dipping to $1.1650 on Monday for the first time since June 25.

Fed Chair Powell has said he expects inflation to increase this summer as a result of tariffs, which is seen keeping the U.S. central bank on hold until later in the year.

Economists polled by Reuters expect headline inflation to increase to 2.7% on an annual basis, up from 2.4% the prior month. Core inflation is expected to rise to 3.0%, from 2.8%.

"Should inflation fail to materialise or remain steady, questions may arise regarding the Fed's recent decision not to cut rates, potentially intensifying calls for monetary easing," James Kniveton, senior corporate FX dealer at Convera, wrote in a client note.

"Calls from the White House for leadership changes at the Fed may increase."

Trump on Monday renewed his attacks on Powell, saying interest rates should be at 1% or lower, rather than the 4.25% to 4.50% range the Fed has kept the key rate at so far this year.

Fed funds futures traders have been pricing in about 50 basis points of interest rate cuts by year-end, with the first quarter-point reduction seen as likely in September.

"If Powell leaves, we expect the (U.S. Treasury yield) curve to steepen sharply, with the short-end factoring in front-loaded rates cuts," DBS analysts wrote in a note.

"Meanwhile, the loss of confidence in price stability should translate into sharply higher 10-year and 30-year yields."

China's economic growth topped market forecasts in the second quarter - even as it slowed slightly from the prior three months - in a sign of resilience against U.S. tariffs.

At the same time, analysts warned of underlying weakness and rising risks later in the year that will ramp up pressure on Beijing to roll out more stimulus.

The Chinese yuan weakened slightly to 7.1766 per dollar in offshore trading.

The Aussie was steady at $0.6548.

(Reporting by Kevin Buckland; Editing by Sonali Paul and Lincoln Feast.)

• AUD/USD buyers sitting near 0.6540, but multiple factors continue to weigh

• CN retail sales (4.8% y/y vs poll 5.4%), new home prices -3.2% y/y impacting

• Westpac consumer sentiment slightly improved but pessimism still dominant

• Moderate USD demand amid renewed tariff concerns also leaning on pair

• Albanese/Xi meeting Tue, key topics: resources, energy transition, security

• U.S. Jun core CPI 1230 GMT Tue, Reuters poll consensus +0.3% m/m, +3.0% y/y

• AU employment data due Thur, Reuters poll +20.0k jobs, 4.1% unemployment

• Range Asia 0.65395-55, support 0.6485 0.6440, resistance 0.66875
AUD Hourly Bollinger Study


USD Index Daily 55-DMA

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

Synopsis:

Morgan Stanley maintains a bearish outlook on the US Dollar Index (DXY) versus major FX peers like the euro and yen, while flagging oil prices as a potential upside risk to the dollar.

Key Points:

• Bearish DXY: Morgan Stanley expects continued weakness in the DXY, favoring EUR, JPY, and to a lesser extent GBP and CHF.

• Oil Price Risk: A sustained increase in oil prices could pose a challenge to their USD-bearish view.

• Broad G10 View: They see upside for EUR, JPY, GBP, CHF, AUD, and NZD.

• Relative Underperformance: They see downside risks for CAD, NOK, and SEK.

Conclusion:

Morgan Stanley’s base case is a weaker USD driven by relative macro and policy trends, but they caution that rising oil prices could temporarily support the dollar. They continue to favor long positions in EUR and JPY as core expressions of their bearish USD view.

• Steady in a slow start for the FX majors today in Asia

• EU threatens countermeasures over US tariffs, Trump says he is open to talks

• Euro has softened in recent days, but markets expect an EU/US tariff deal

• EZ ZEW and industrial production today, but US Core CPI leads data risk

• Charts - daily momentum studies slip, 21-day Bollinger bands contract

• 5, 10 & 21-day moving averages conflict - the daily charts are neutral

• Resistance starts at 1.1723 10 DMA, then last week's 1.1789 high

• Yesterday's 1.1650 low then 1.1537, 0.382% of the May/July rise support

• A sustained break below the under pressure 1.1671 21-dma would be bearish

• There are no significant close strikes for July 15th
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• AUD/USD -0.2% from Tue 0.65535 high as traders await CN economic data suite

• Q2 GDP (poll +0.9% q/q, +5.1% y/y); industrial output, retail sales also due

• Moderate USD buying following renewed tariff concerns also weighing on pair

• Westpac consumer sentiment slightly improved in Jul +0.6% m/m (+0.5% prior)

• U.S. Jun core CPI 1230 GMT Tue, Reuters poll consensus +0.3% m/m, +3.0% y/y

• AU employment data due Thur, Reuters poll +20.0k jobs, 4.1% unemployment

• Range early Asia 0.65395-535, support 0.6485 0.6440, resistance 0.66875
AUD Hourly Bollinger Study

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

• Traders watch U.S. inflation data for signs of tariff impact

• Fed has said CPI may rise in U.S. summer as it held off cutting rates

• Aussie dollar slips ahead of China GDP release

By Kevin Buckland

TOKYO, July 15 (Reuters) - The dollar hovered near a three-week high versus major peers on Tuesday as traders awaited the release of U.S. inflation data later in the day that could provide clues on the path for monetary policy.

The U.S. currency was also buoyed by elevated Treasury yields, with investors weighing a potential exit of Jerome Powell from the Federal Reserve as President Donald Trump continued his criticism of the central bank chairman.

The Aussie dollar dipped from last week's eight-month peak ahead of a report on gross domestic product in China, Australia's top trading partner.

Bitcoin changed hands at $120,067, after pushing to an all-time high $123,153.22 on Monday as investors bet on long-sought legislative policy wins for the cryptocurrency industry this week.

The dollar was little changed at 147.75 yen early in Asia's day, trading just below Monday's high since June 23 at 147.78.

The dollar index , which tracks the currency against the yen and five other major rivals, stood at 98.104, just below the overnight peak of 98.136, the highest since June 25.

The euro was steady at $1.1662 after slipping to $1.1650 on Monday for the first time since June 25.

Fed Chair Jerome Powell has said that he expects inflation to increase this summer as a result of tariffs, which is seen keeping the U.S. central bank on hold until later in the year.

Economists polled by Reuters expect headline inflation to increase to 2.7% on an annual basis, up from 2.4% the prior month. Core inflation is expected to rise to 3.0%, from 2.8%.

"Should inflation fail to materialise or remain steady, questions may arise regarding the Fed's recent decision not to cut rates, potentially intensifying calls for monetary easing," James Kniveton, senior corporate FX dealer at Convera, wrote in a client note.

"Calls from the White House for leadership changes at the Fed may increase."

Trump on Monday renewed his attacks on Powell, saying interest rates should be at 1% or lower, rather than the 4.25% to 4.50% range the Fed has kept the key rate at so far this year.

Fed funds futures traders have been pricing in 50 basis points of interest rate cuts by year-end, with the first reduction expected in September.

Meanwhile, China's economy is likely to have cooled in the second quarter after a solid start to the year, as trade tensions and a prolonged property downturn drag on demand, raising pressure on policymakers to roll out additional stimulus to underpin growth.

Data due on Tuesday is expected to show GDP grew 5.1% year-on-year in April–June, slowing from 5.4% in the first quarter, according to a Reuters poll.

"Should the data disappoint, and China's economic situation continue to underwhelm expectations, this could maintain downward pressure on the Australian dollar," said Kniveton.

The Aussie edged down slightly to $0.6542.

(Reporting by Kevin Buckland; Editing by Sonali Paul)

• Steady after closing -0.25%, with the USD +0.2% amid modest UST/Stock moves

• US tariffs complicate the ECB's July rate decision, but won't stop a pause

• Trump arms Ukraine and threatens sanctions on countries that buy Russian oil

• Charts - daily momentum studies slip, 21-day Bollinger bands contract

• 5, 10 & 21-day moving averages conflict - the daily charts are neutral

• Resistance starts at 1.1722 21 DMA, then last week's 1.1789 high

• Yesterday's 1.1650 low then 1.1537, 0.382% of the May/July rise support

• A sustained break below the under pressure 1.1666 21-dma would be bearish

• There are no significant close strikes for July 15th
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• AUD/USD -0.6% from Mon 0.65875 high as U.S. yield curve steepens/USD firms

• Trump criticism causing concern on Fed independence, undermines bond markets

• DXY +0.25% Mon, moderate USD buying triggered by renewed tariff concerns

• Focus now on crucial U.S. Jun core CPI Tue, (poll +0.3% m/m, +3.0% y/y)

• AU employment data due Thur, Reuters poll +20.0k jobs, 4.1% unemployment

• Overnight range 0.6543-76, support 0.6542 0.6485 0.6440, resistance 0.66875
AUD Daily 200-DMA & DXY Daily

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

Synopsis:

MUFG highlights that Japan's upcoming Upper House election could significantly impact the yen, with various political outcomes influencing USD/JPY in different directions.

Key Points:

• Political Instability Risk: PM Ishiba leads a minority government in the Lower House. A loss in the July 20 Upper House vote could force his resignation.

• Takaichi Risk: A likely successor, Sanae Takaichi, is perceived as favoring looser fiscal policy—raising the risk of yen depreciation under her leadership.

• Scenario Analysis:

  • Ishiba resigns after poor result: JPY likely to weaken significantly.

  • Government weakened but holds majority: Modest yen selling expected.

  • Government retains strong position: USD/JPY likely to retrace recent losses.

Conclusion:

The July 20 Upper House election represents a major political risk event for the yen. A leadership change could trigger renewed JPY weakness, while a stable outcome may stabilize USD/JPY. Markets should prepare for heightened volatility around the vote

• GBP down -0.5%, break of 55DMA (1.3482) adds to bearish momentum

• Dovish BoE rhetoric give bears a lift

• BoE's Bailey increases focus on upcoming jobs data - due Thur

• UK labour market survey cooled rapidly in June

• Support at 1.3434 (2024 high) tested. Risk of sub-1.34 move rising

• Additional support sits at 1.3376 (b-band range low)

• COMMENT-BoE outlook is looking more dovish

• BUZZ-EUR/GBP guided higher by tighter EU/UK rate spreads
GBPUSD daily chart

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

Synopsis:

BNP Paribas maintains a bullish stance on EUR/USD, expecting eurozone investor flows and fiscal expansion to drive the pair toward 1.20 by end-2025 and 1.25 in 2026. They see continued USD selling by large pension funds as a major catalyst.

Key Points:

• Investor Flows: Dutch and Danish pension funds — representing ~60% of eurozone private pension assets — still hold a significant overweight in USD assets (20% of AUM in Q1 2025 vs. 15% in 2015).

• Scope for More: These investors have started cutting USD exposure but BNPP sees ample room for more flows, supporting sustained EUR strength.

• Fiscal Support: Europe’s bold fiscal expansion, particularly Germany’s spending plans, is expected to boost growth and make EUR assets more attractive relative to USD assets.

• Risk Factor: A key downside risk is if the US targets Europe with tariffs, which could weigh on eurozone exports and the EUR.

Conclusion:

BNPP sees continued structural drivers for EUR/USD to climb towards 1.20 and then 1.25, underpinned by eurozone investor diversification and fiscal expansion. However, trade policy remains a key risk to monitor.

• EUR/GBP hits 0.8692, high since April 11, after adding to gains since Friday

• Monday's GBP losses prompted by dovish steer from BoE's Bailey in The Times

• Bailey-larger rate cuts possible if jobs mkt shows pronounced slowdown signs

• On Friday, sterling was hurt by unexpectedly negative UK May GDP data

• 0.8738 was EUR/GBP peak on April 11, highest level since November 2023

• UK June inflation data due on Wednesday; CPI is forecast at 3.4% YY again

EURGBP

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

Synopsis:

ANZ recommends a tactical short position in EUR/JPY, citing tariff uncertainty, technical overbought signals, and the risk of a EUR retracement. Their near-term target is 166.

Key Points:

• Extended JPY Weakness: The yen has underperformed G10 FX, pushing EUR/JPY to new highs above 170, with risks of further JPY weakness given stretched USD/JPY shorts.

• Tariff Risks: EU tariff announcements could surprise to the downside for EUR, especially if US tariff rates return to 50% or EU trade talks falter.

• Technical Overbought: The pair is overbought on RSI and the 200-day moving average sits just below 166, adding to correction risk.

• Timeframe and Risks: ANZ expects a move towards 166 over the next 1–2 weeks, though further yen weakness remains the main upside risk to the short trade.

Conclusion:

ANZ sees a tactical window to fade EUR/JPY strength, targeting 166 as tariff uncertainty and stretched technicals point to a near-term pullback, but note that further JPY weakness could limit downside.

EUR/USD might continue its recent downward trajectory as concerns over U.S. inflation data and potential tariffs weigh on the pair.

The euro fell to a 13-session low on Monday, pressured by President Donald Trump’s threat to impose a 30% tariff on imports from the European Union. Should these tariffs take effect as planned on August 1, the potential for reduced EU exports to the U.S. could undermine economic growth in a region heavily reliant on trade with its largest partner.

The combination of lower exports and the euro's recent gains against the dollar may prompt the European Central Bank (ECB) to consider further rate cuts, placing additional downward pressure on EUR/USD.

Meanwhile, the prospect of rising inflation in the U.S. could delay Federal Reserve rate cuts, which would bolster the dollar.

U.S. 2-year and 5-year breakeven inflation rates continue to trend upward, which has contributed to recent dollar strength.

As the euro faces these challenges, it is important to consider the implications of ongoing U.S. economic conditions. Investors are keenly awaiting the June Consumer Price Index (CPI) and Producer Price Index (PPI) reports, with any results exceeding expectations likely to reinforce the narrative of persistent inflation above the Fed’s target.

Technical indicators support a bearish outlook for EUR/USD, with falling daily and monthly Relative Strength Index (RSI) readings signaling downward momentum and EUR/UDS’s hold below the falling 10-DMA adding to bearish signals.

In light of these factors, a potential test of the 1.1350-1.1400 area appears increasingly plausible.
usbei


eurusd


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

Synopsis:

Credit Agricole expects EUR/CHF to break out of its current tight range by September and target March’s highs above 0.96 by year-end, as modest CHF net long positioning unwinds.

Key Points:

• Modest CHF Longs: The market still holds modest CHF net long positions, creating room for mild Swiss franc weakness.

• Near-Term Upside: EUR/CHF is expected to break its tight range to the upside by the end of Q3.

• Year-End Target: The pair could revisit March’s highs above 0.96 by December.

• Long-Run Anchors: Resilient Swiss growth, solid fiscal fundamentals, and lower inflation differentials will limit further nominal CHF losses and soften real CHF overvaluation over time.

Conclusion:

Credit Agricole sees scope for a moderate EUR/CHF breakout in the months ahead as positioning normalises, targeting a move above 0.96 by year-end, though strong Swiss fundamentals should contain deeper CHF depreciation in the longer term.

Synopsis:

Goldman Sachs sees merit in targeting medium-term Sterling downside but believes the current elevated UK fiscal premium complicates near-term shorts. They prefer to express their bearish GBP view through European crosses instead of Cable, given GBP/USD’s high beta to EUR/USD and US policy volatility.

Key Points:

• High Fiscal Premium: Sterling already embeds significant fiscal risk, which historically complicates its FX correlation to rate differentials, making near-term shorts tricky.

• Data Dependence: Upcoming UK inflation and labour market data could shift BoE expectations further, with negative implications for GBP over the medium term.

• Crosses Over Cable: Goldman favours expressing GBP downside via crosses like EUR/GBP or CHF/GBP rather than GBP/USD, given Cable’s sensitivity to broader USD moves and headline risks.

• Timing Preference: They see more value in waiting for better levels before establishing new Sterling shorts.

Conclusion:

Goldman Sachs remains strategically bearish on GBP but prefers to stay patient for more attractive short entry points. European crosses offer clearer ways to express this view, while direct Cable shorts are less appealing in the near term due to their link to broader USD and EUR swings.

• AUD/USD rallied to 0.6587 in Asia on US yield , US$ drops

• Sellers emerged however as US$ firmed up; 0.6556 traded in Europe's morning

• NY opened near 0.6565, AUD/UD traded down -0.10% in early action

• USD/CNH drop from its high, gold gains helped limit AUD/USD's downside

• Techs are mixed; daily inverted hammer formed but monthly bull hammer in place

• Daily, monthly RSIs are falling but AUD/USD remains above the 10- & 21-DMAs

• US June CPI, PPI & US Q2 earnings reports may impact risk sentiment this week
audusd


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