The dollar index climbed for a fourth straight session, supported by firmer Treasury yields and a weaker euro after dovish remarks from ECB President Christine Lagarde. Oil was lower after Vice President JD Vance said there was progress in Iran talks, with agreement on inspectors, frozen assets, and ceasefire management though negotiations are ongoing. U.S. Treasury authorized Iran-related oil and petrochemical transactions through Aug. 21. Iran downplayed progress saying it made no nuclear concessions or new commitments in Sunday’s U.S. talks in Switzerland. Lagarde said the euro zone inflation shock is notable but not strong enough to raise long-term expectations or spark second-round effects and yuan undervaluation warrants global discussion. Canada's annual inflation rate rose to 3.2% in May, exceeding the median forecast.

EUR/USD fell toward Friday's low of 1.1418 amid higher U.S. yields, USD demand and weaker German yields following Lagarde’s remarks, with bearish technicals reinforcing the downside bias. GBP/USD held a modest gain after Prime Minister Keir Starmer resigned, paving the way potentially for front-runner Andy Burnham and greater stability, though gains may be capped by U.K. macro uncertainty and technical resistance at the 1.3412 200-day moving average. USD/JPY briefly touched a 2026 high of 161.93 before dropping to 161.06 on a report of talks between Japan’s FinMin Katayama and U.S. Treasury Secretary Bessent, with subsequent steadying putting the focus back on the 161.96 2024 peak and 162 barriers.

AUD/USD pared a loss after dipping beneath 0.70 though a falling RSI and its position below 10- and 21-day moving averages point to a negative bias.

Treasury yields were up about five basis points with the 2s/10s curve steady at +27.7bp.

The S&P 500 was trading 0.33% lower in New York afternoon.

WTI crude oil fell 1.8% as U.S.-Iran talks ease supply risks.

Gold rose 0.73% while copper fell 0.31%. Heading toward the close: EUR/USD -0.37%, USD/JPY +0.14%, GBP/USD +0.06%, AUD/USD -0.24%, DXY +0.16%, EUR/JPY -0.23%, GBP/JPY +0.23%, AUD/JPY -0.02%.(Robert Fullem)

• NY opened near 0.7000 after AUD/UDS traded 0.7019-0.6994 overnight

• The pair rallied in early action as equities, gold & silver traded upward

• 0.7013 traded, sellers then emerged and 0.6997 traded, the pair neared 0.07705 late

• USD buying, AUD/JPY's pull back from its high & firm U yields weighed on AUD/USD

• Equities turning lower on the day helped the pair traded down -0.21% late in the day

• Techs lean bearish; RSIS are falling & the pair trades below the 10- & 21-DMAs
audusd


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

Credit Agricole CIB Research argues that rate differential matters more for EUR/USD than risk sentiment at this juncture.

EUR/USD has dropped to multi-month lows of late, after weeks during which the pair has been 'pushed and pulled' by two seemingly conflicting drivers. On the one hand, we had the market hopes for an end to the conflict in the Middle East that culminated last week with the signing of the interim peace deal between Iran and the US. This market driver has helped investor risk sentiment recover, weighed on the safe-haven USD and given the EUR a boost. On the other hand, the steady build-up of hawkish market Fed expectations culminated last week as well, after the Fed delivered a hawkish surprise and gave the USD's relative rate appeal boost. The fact that EUR/USD trades at its current depressed levels could thus suggest that FX investors seem to put greater emphasis on the hawkish Fed than the abatement of geopolitical risks," CACIB notes.

"We also believe that the USD could remain more attractive vs the EUR even if risk sentiment were to improve further, given its appeal as a higher-yielding currency and given the continuing inflows into US technology stocks," CACIB adds.

EUR/USD traded lower on Monday, threatening to negate the bullish signal generated by the June 19 daily bull hammer candle. The selling pressure was aided by commentary from ECB President Christine Lagarde, who leaned dovish by saying that the central bank is seeing no evidence of de-anchoring inflation expectations or second-round effects that would justify a more aggressive policy response. This was notable given that the ECB had only recently hiked rates, and her remarks likely caught EUR/USD bulls off guard.

The market reaction to Lagarde's comments was swift. German 2-year yields moved lower and Euribor futures prices rose as investors trimmed their expectations for further ECB rate hikes. This dynamic widened the U.S.-German 2-year yield spread to just below -164.50 basis points, a level not seen since early September 2025, effectively boosting the dollar's yield advantage over the euro.

Should these headwinds persist, EUR/USD looks set to remain under bearish pressure, a view that is reinforced by a deteriorating technical picture. Both the daily and monthly RSIs are falling, signaling growing downward momentum, and the pair continues to trade below its bearishly aligned 10- and 21-day moving averages. Perhaps most notably, monthly charts are showing a head and shoulders pattern forming, and a completion of that pattern suggests a move below the 1.1000 level is possible.
deus


eurusd


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

Bank of America Global Research changes its Fed rates call.

"We now expect three 25bp Fed hikes this year, in September, October, and December. This would take the policy rate to 4.25-4.5%. We were skeptical of the need for cuts in 2025," BofA notes.

"Both the data and our updated read of the Fed's reaction function suggest it will reverse those cuts in short order. We think the Fed will stay on hold next year. Inflation is likely to remain sticky, keeping the real policy rate from becoming overly restrictive," BofA adds.

S&P gains and broad dollar strength have propelled USD/JPY to a fresh 2026 high, bringing it within reach of the 2024 peak at 161.96. Despite options signaling elevated intervention risk, Monday’s verbal pushback from Finance Minister Satsuki Katayama had little lasting effect, and overall FX jawboning from Japanese officials remains relatively subdued. The absence of FX comments from top currency diplomat Atsushi Mimura reinforces the view that authorities may prefer a wait-and-see approach, particularly amid broad USD strength, an orderly rise in USD/JPY, and limited strain on Japan’s corporate sector from yen weakness. Several factors continue to underpin the pair. U.S. 2-year Treasury yields remain elevated following a hawkish tone from Fed Chair Kevin Warsh after last week's FOMC meeting, even as oil prices soften amid U.S.-Iran talks. Meanwhile, Japanese capital outflows into the U.S. add support, underscored by reports of a large investment by Japan’s biggest power generator. In addition, Deputy Governor Ryozo Himino has confirmed the BOJ’s accommodative stance, with policy expected to work in concert with the government's expansionary backdrop. With key inflation data, PMIs, the June BoJ summary, and speeches, including from Governor Kazuo Ueda, there is a risk the BoJ falls further behind the curve. While positioning appears stretched and RSI signals overbought conditions, the lack of strong long-term yen bullishness leaves room for a move beyond 162 toward 165, though the sub-150 gap may remain a constraint.
Yen


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

JP Morgan discusses the scope of another wave of JPY intervention by Japan's MoF.

"End of last week saw an acceleration through 161 and all of a sudden we are knocking on the door of 162 - somewhere USDJPY has not been for 40 years. Spicy price action Thursday night bears the hallmark of a rate check but as with the prior suspected episode (clearing of 160 over NFP earlier this month) the rate of recovery has been pretty aggressive," JPM notes.

"We are nearing an inflection point here and the MoF must know anything except bold action will risk a significant acceleration in JPY weakness, we keep hearing from Katayama but it is really Mimura we need to hear from. Not positioned here but would be very surprised if they let is go; they will feel that the energy complex is on their side and they will also be aware that JPY shorts have built to relatively decent level now," JPM adds.

Goldman Sachs discusses JPY outlook and prefers being short JPY against high-carry EM currencies.  

"We continue to see the risks as skewed to the upside in USD/JPY as the incoming US data have remained resilient, the odds of Fed hikes have gone up, and domestic fiscal risks remain. A sharp reversal lower would likely require a rise in recession risk or shift towards a more hawkish BOJ, both of which continue to feel less imminent," GS notes.

"The potential for additional interventions still leaves outright USD/JPY longs less attractive though, despite the broader backdrop arguing for a weaker Yen. For that reason, we have preferred being short JPY against high-carry EM currencies," GS adds.

• AUD/USD pressured by risk-off and USD strength post-Fed, finding a floor near 0.6990 on Friday

• Limited recovery keeps 11 June low of 0.6979 vulnerable; break targets late March double base at 0.6834

• Option implied vol edging higher to reflect downside risks, gains capped while spot supports hold

• Wed CPI key — trimmed mean seen rising to 3.5% in May; a surprise either way could set direction

• Thursday's jobs data forecast at +30k, reversing April's 18.6k drop — another swing factor for AUD

• US PCE Thursday also in focus; stronger print could extend USD gains and add further pressure on AUD

• Related - huge 0.7010 strike stands out amid FX option expiries for 10-am New York cut expiry on Monday
AUD=D3


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

Deutsche Bank's analysis indicates that Fed repricing and resilient U.S. macro data are the main factors pushing gold lower, more evident since diverging from oil over the past month. Currently trading at around $4,206/oz, the bank's base case anticipates gold reaching $4,800/oz in Q4 if the Fed maintains an indefinite hold near neutral. Conversely, if the Fed implements three to four hikes, the risk case suggests gold could decline to approximately $3,800/oz.

The first FOMC meeting under Chair Warsh showed no resistance to market expectations for rate hikes, with the press conference highlighting the potential for a further hawkish shift. The Taylor Rule estimate is roughly 80 basis points above current market pricing, providing quantitative backing for hawkish advocates. Despite this, Deutsche Bank's house call remains for an indefinite hold near neutral, as inflation expectations are decreasing in tandem with oil prices, and the median dot plot projects only one hike followed by a reversal next year, contrasting with the 48 basis points currently priced into markets through March 2027.

Investment demand factors are notably absent at present. ETF selling persisted after the May NFP report, futures open interest is at a 17-year low, and net long positions are nearer to yearly lows than highs, leaving gold vulnerable until either the Fed pivots or physical demand re-emerges to support prices.
XAU=


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

• Hawkish Fed/USD gains sent EUR/USD to 1.1418 before recovering 1.1481 Fri, but slips back to 1.1442 Monday

• Key support at 1.1409 - March 16 low since Aug 2025, when it based 1.1392. Option barriers expected 1.1400

• 1.1335 is 38.2% Fibo retrace of 2025-2026 rise from 1.0125 to 1.2084 and a viable downside target for EUR/USD bears

• EUR/USD option risk reversals warned of downside risks to spot before Fed - highest EUR put vs call premium since April

• The benchmark 1-month 25 delta contract retains that 0.65 premium for EUR puts over calls

• Outright demand for downside pre Fed has increased since - strikes as low as 1.1200 with 3-6-month expiries

• Implied volatility increasing as EUR/USD edges lower - benchmark 1-month expiry now 5.7 from recent/2026 lows 4.9
EUR/USD daily chart (EBS)


EUR/USD FXO implied volatility


EUR/USD 25 delta risk reversals


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

Repeat with no changes (originally posted June 19)

By Justin McQueen

June 22 (Reuters) - CAD remains on the back foot, with USD/CAD pushing to levels last seen in April 2025. A hawkish Federal Reserve has dominated the narrative, but trade risks are evident leading into the July USMCA review, and with U.S. President Donald Trump again signalling the possibility of non-renewal, the tone around negotiations remains unconstructive. In keeping with the familiar "escalate to de-escalate" playbook, headline risk is likely to stay elevated near-term, leaving the bias skewed to further topside in spot.

That said, position and technicals are beginning to flash caution. The daily RSI has pushed north of 83 - its most extreme reading since the March 2020 COVID-19 episode - which underlines just how stretched the current move is. Historically, such signals have tended to precede a period of consolidation or modest pullback over the subsequent 20–30 days. As such, while the macro backdrop remains CAD-negative, chasing USD/CAD at current levels looks increasingly unattractive from a risk-reward perspective.

Of course, a tail-risk outcome where the U.S. exits USMCA would materially shift the landscape. In that scenario, CAD would likely reprice sharply weaker, with USD/CAD extending towards the 1.44–1.45 region, echoing the impulsive move seen during the peak of trade tensions in early 2025.
USDCAD returns RSI


ustin McQueen is a Reuters market analyst. (The views expressed are his own). Editing by Nia Willia ((Email: ))

• AUD/USD has traded a 21 pip range thus far Monday; 0.6998-0.7019

• Those parameters are within Friday's 0.6990-0.7024 range

• There is a A$1.1 billion 0.7010 option expiry for the 10am ET NY cut

• 0.6979 (two-month low on June 11) is a support point below 0.6990

• Australian May CPI data is due on Wednesday; 4.3% YY forecast

• Australia reports second H5N1 bird flu case in migratory seabird

AUDUSD


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

• Cable has traded a 51 pip range thus far Monday; 1.3180-1.3231

• Those parameters are within Friday's 1.3164-1.3240 range

• UK Prime Minister Starmer could set out exit timetable on Monday

• Burnham looks set to succeed Starmer as Britain's PM in Q3

• There is a £1.5 billion 1.3200 option expiry for the 10am ET NY cut

• U.S. and Iran conclude high-level talks in Switzerland, mediators say

GBPUSD


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

• FX options expire at 10am New York/15:00 GMT on Monday June 22

• EUR/USD: 1.1400 (768M), 1.1425-30 (1BLN), 1.1450-60 (420M), 1.1475 (335M), 1.1500 (953M)

• 1.1525-30 (360M), 1.1550 (2.7BLN). USD/CHF: 0.8050 (201M)

• EUR/GBP: 0.8660-65 (505M), 0.8675 (409M)

• GBP/USD: 1.3100 (1BLN), 1.3200 (1.5BLN), 1.3250 (200M), 1.3300 (1.3BLN)

• AUD/USD: 0.7000 (230M), 0.7010 (1.1BLN), 0.7020 (200M), 0.7040 (230M), 0.7050-60 (820M)

• USD/JPY: 160.00 (3BLN), 160.75 (638M), 161.00 (1.2BLN), 161.25 (370M), 161.50 (310M)

• 161.80-90 (855M), 163.00 (2.9BLN)(Richard Pace is a Reuters market analyst. The views expressed are his own)

• EUR pairs mixed in Asia, some on heavy side, others in surge mode

• EUR/USD heavy, 1.1450-72 EBS in Asia, up though from 1.1418 low Friday

• Capped for now at base of 1.1463-1.1521 descending hourly Ichimoku cloud

• Nearby option expiries today to again help contain spot action

• Total E2.7 bln on 1.14-handle, large below on 1.13 and above on 1.15 too

• EUR/JPY on hold in middle of recent 184.30-186.31 range, Asia 185.03-21 EBS

• Currently above 184.36-95 daily Ichimoku cloud

• EUR/GBP up to 0.8687 early Asia before falling back to 0.8669, still buoyant

• Option expiries today include E965 mln between 0.8655-75, some 0.8700-15

• View more pressure on UK PM Starmer after Burnham win GBP negative

• EUR/CHF saw good rally to 0.9264 Friday, still bid in Asia, 0.9261-66 EBS

• Previous resistance around 200-DMA today at 0.9227 left in the dust

• USD to remain better bid across a broad front on renewed US-Iran tensions?

• Related , ,

• On Starmer-Burnham , for more click on [FXBUZ]

EUR/USD:


EUR/JPY:


EUR/GBP:


EUR/CHF:

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

• AUD/USD flat Mon as claims of U.S.-Iran peace deal progress calms nerves

• Iran media says officials negotiating via mediators after leaving talks

• Status of Strait of Hormuz currently remains unclear amid mixed statements

• CN leaves lending benchmark loan prime rates unchanged as widely anticipated

• AUD still vulnerable to downside, break below 0.6980 would hasten move

• AU May CPI due Wed (poll -0.3% m/m), May employment data due Thur

• RBA Deputy Governor Andrew Hauser speaks in Melbourne Wed

• Range Asia 0.6999-0.7019, support 0.6980 0.6834, resistance 0.7089 0.7200
AUD Daily 55-DMA

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

• GBP/USD -0.1% in Asia Mon with UK Prime Minister Starmer vowing to dig in

• Andy Burnham's election puts leadership issue squarely on short-term agenda

• Calls for amicable handover met with defiance as situation remains live

• Increasing chances of Fed rate hikes lending USD further support

• UK May retail sales +1.2% m/m, +3.2% y/y (poll +0.5%, +1.9% respectively)

• GBP downtrend in place, break below 1.3160 support will hasten move

• Range Asia 1.3180-1.3225, support 1.3160 1.3040, resistance 1.3867 1.4250
GBP Daily 55-DMA

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

• Shares of Industrial Minerals rise as much as 12% to A$0.14, hitting their highest level since June 10

• Stock marks strongest intraday trading session since May 28

• Diversified miner confirms widespread gold mineralisation at onshore Laverton Gold Project

• Stock up 7.7% YTD, including current session moves

(Reporting by Shivangi Lahiri in Bengaluru)

• USD/JPY finds new equilibrium on 161, higher plane without intervention

• Asia 161.28-52 EBS, follows push up to 161.81 Thursday

• Offers still thick pre-162 option barriers, some Japan exporter offers

• Threat of intervention seen high too, more FinMin Katayama jaw-boning

• Katayama vowed readiness to act on yen at any time early

• Option expiries today supportive, to help contain spot action

• Below at 161.00 $1.2 bln, 161.25-50 $745 mln, 161.75-162.00 $966 mln

• Another $2.9 bln up at 163.00 strike, $3 bln below at 160.00 strike

• Stasis on 161 could last into US re-open later today

• Japanese importers continue with buys, foreign Japan stock buy hedging too

• Market also eyeing more BOJ DepGov Himino Diet testimony today

• US-Iran tensions won't go away soon, fresh sabre-rattling over weekend

• Related comments , , also ,

• On BOJ , , on US-Iran ,
USD/JPY:


Nikkei 225:

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

• NZD/USD -0.1% Mon, as markets cautiously digest weekend U.S.-Iran news

• Iran closed Strait of Hormuz Sat in response to Israel attacks in Lebanon

• Trump threatens fresh strikes, causes Iranian delegation to leave CH talks

• NZD looks to have entered solid downtrend, targeting 0.5680 support zone

• Futures pricing implies 80.4% chance of RBNZ hike Jul 8, but not helping NZD

• RBNZ Governor Breman will attend the annual closed-door BIS conference Fri

• Range Asia 0.57285-35, 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 in early trade Mon despite off-piste U.S.-Iran negotiations

• Iran closed Strait of Hormuz Sat in response to Israel strikes in Lebanon

• Trump threatens to resume attacks on Iran; negotiations in CH 'concluded'

• Fed rate-hike expectations continue to build post-FOMC's 'hawkish hold'

• AUD vulnerable to further downside, break below 0.6980 would accelerate move

• AU May CPI due Wed (poll -0.3% m/m), May employment data due Thur

• RBA Deputy Governor Andrew Hauser speaks in Melbourne Wed

• Range Asia 0.70169-18, support 0.6980 0.6834, resistance 0.7089 0.7200
AUD Hourly Bollinger Study

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

• USD/JPY still trading deep in intervention territory, holding just below 162

• Price action remains jittery; note Thursday’s sharp but short-lived dip sub-161

• Yesterday’s 161.81 high within touching distance of the 161.96 cycle peak

• Intervention risk clearly elevated as we grind back toward highs

• That said, macro backdrop remains decisively USD-supportive - markets reprice Fed hawkishly

• In turn, any intervention may only generate temporary JPY support as was the case in Apr-May

• Dips likely to be well-supported as underlying demand persists

• Initial support at 160.47-51 (200-hour MAs)
USDJPY hourly chart


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

By Justin McQueen

June 19 (Reuters) - CAD remains on the back foot, with USD/CAD pushing to levels last seen in April 2025. A hawkish Federal Reserve has dominated the narrative, but trade risks are evident leading into the July USMCA review, and with U.S. President Donald Trump again signalling the possibility of non-renewal, the tone around negotiations remains unconstructive. In keeping with the familiar "escalate to de-escalate" playbook, headline risk is likely to stay elevated near-term, leaving the bias skewed to further topside in spot.

That said, position and technicals are beginning to flash caution. The daily RSI has pushed north of 83 - its most extreme reading since the March 2020 COVID-19 episode - which underlines just how stretched the current move is. Historically, such signals have tended to precede a period of consolidation or modest pullback over the subsequent 20–30 days. As such, while the macro backdrop remains CAD-negative, chasing USD/CAD at current levels looks increasingly unattractive from a risk-reward perspective.

Of course, a tail-risk outcome where the U.S. exits USMCA would materially shift the landscape. In that scenario, CAD would likely reprice sharply weaker, with USD/CAD extending towards the 1.44–1.45 region, echoing the impulsive move seen during the peak of trade tensions in early 2025.
USDCAD returns RSI


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