• NY opened near 0.6945 after 0.7003 traded overnight, price drop then extended

• Broad-based USD buying due to risk off trading weighed down AUD/USD

• Significant drops in gold, silver, copper along with equity drops added weight

• USD/CNH's rally toward 6.7980 & AUD/JPY's drop contributed to AUD/USD moving lower

• The pair hit 0.6915 in NY's afternoon, was trading down -1.23% late in the day

• Techs are bearish; RSIs are falling, pair below psychological 0.7000 level & 10-DMA
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)

ANZ Research adopts a bullish bias on NZD and expects AUD/NZD to drift lower towards 1.17 by year-end.

"We take a constructive view on the NZD. Of the G10 currencies, we expect it to be a key beneficiary of the US-Iran deal. It will get support from better risk sentiment and the likely pullback in oil prices via the terms-of-trade channel. Additionally, based on market pricing, the RBNZ is set to enter the most aggressive tightening cycle of all G10 central banks to year end which will be supportive via rate differentials, particularly given our view of stretched rate hike expectations for various other G10 central banks. We continue to expect the RBNZ to deliver three consecutive 25bp hikes, commencing in July and taking the Official Cash Rate to a terminal 3%," ANZ notes.

"On the crosses, the AUD/NZD pulled back slightly after reaching a year-to-date high near 1.23. We think the pair has peaked this year and continue to forecast a yearend rate of 1.17. The NZD would be better supported, as a decline in oil prices will reduce its negative terms-of-trade shock. Additionally, with the RBA and RBNZ at different stages of their hiking cycles, AU-NZ rate differentials would likely be supportive of a lower AUD/NZD," ANZ adds.

EUR/USD hit a one-year low on Tuesday as investors rotated into the safety of the U.S. dollar, while bearish technicals imply the pair could weaken further. Even so, traders holding short EUR/USD positions may need to closely watch U.S. inflation markets, which are hinting that the Federal Reserve may not need to stay as hawkish as is currently expected.

Both U.S. 2-year and 5-year inflation breakeven rates rose from December through early May, but have since reversed lower. They are now trading below the levels seen before the Iran conflict and have fallen back to territory last seen in January. U.S. 2-year and 5-year inflation-linked swaps have followed a similar path, also moving back toward pre-conflict levels.

A key driver has been oil . As the U.S. and Iran move toward a peace deal, oil prices fell sharply from April highs and could decline further. If that happens, market-based inflation measures may face additional downside pressure.

That makes upcoming U.S. PCE, CPI, and PPI releases especially important. If those reports show inflation is not as strong as currently feared, the dollar and U.S. rates markets could retreat sharply if they lead investors to reduce expectations for Fed rate hikes . If market-based inflation gauges are right, EUR/USD short positions could be vulnerable to a sharp squeeze higher.
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Credit Agricole CIB Research discusses the scope for another wave of JPY intervention by Japan's MoF.

'According to MoF data released last week, the MoF still has USD1.3trn in FX reserves it can use to intervene in FX markets. It could therefore intervene on the scale it did in April-May by over 15 more times. The same FX reserve data released last week, however, also suggest Japan likely sold USTS to finance its record USD73bn of FX intervention in the April-May period. US Treasury Secretary Scott Bessent has said in the past that he would prefer Japan support the JPY via higher rates rather than FX intervention. The US government is becoming increasingly sensitive about the higher UST yields. So, investors could be thinking US-Japan politics could limit the MOF's ability to intervene," CACIB notes.

"As if to contradict these suspicions, Katayama continues to ramp up her verbal intervention in the FX market saying that she spoke to US Treasury Secretary Scott Bessent for almost an hour as part of a follow up to the G7 meeting last week. She also repeated that authorities remain prepared to take bold action in FX and that the agreement between the US and Japan on FX has not changed," CACIB adds.

Sterling weakened on Tuesday, as a broad AI-driven equities selloff boosted the dollar, and faces a challenging outlook over the next week or so as the market awaits more news on the next UK government after the resignation of Keir Starmer.

Though losing ground, sterling was performing better than most major currencies, except the yen, on Tuesday. Trader focus remains on the downside, including critical support levels below 1.32, in the face of broad dollar strength.

Though sterling initially rose after Starmer's resignation announcement -- which ended the weeks of speculation that had dogged the pound -- focus is now on who will take the role of finance minister due to fiscal concerns that held sway over gilts and British currency.

Meanwhile, Fed-BoE rate expectations are shifting decisively in favour of the dollar. LSEG's IRPR data is discounting 38bp of Fed tightening by year-end versus 27bp frome the BoE. Critically, the Fed's first move is anticipated in September, whereas the BoE is not expected to hike until Q4 2026—a timeline differential that narrows the UK rate advantage that had previously supported sterling.

Technically, should support at 1.3160 — the March 31 low — give way, bears are likely to target November 2025 lows just above 1.30. On the topside, the June 22 high at 1.3272 acts as initial resistance, with a more significant hurdle for bulls at the falling 10-day moving average around 1.3323.
GBP Chart:


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

MUFG Research discusses the scope for another wave of JPY intervention by Japan's MoF.

"Yesterday USD/JPY moved to within touching distance of the high from July 2024 at 161.95 but failed to break above. It is viewed as important level among market participants encouraging renewed speculation that Japan could intervene again soon to support the yen.

At the same time, intervention speculation has been encouraged by media reports that a phone call was held yesterday between Japanese Finance Minister Satsuki Katayama and US Treasury Secretary Scott Bessent. After the call, Finance Minister Katayama told reporters that the two had agreed to take “bold steps” on currencies if needed, and said the two nations are increasingly “aligned” on foreign exchange rate policy," MUFG notes.

"The phone call was described as a follow-up to last week’s G7 meeting. The comments will encourage expectations that the Japan and the US could intervene together to lower USD/JPY which would likely prove more effective than the recent unilateral action undertaken by Japan in late April and early May," MUFG adds.

HSBC Research expects GBP/USD to move lower over the next month.

"We think GBP/USD is likely move lower, and the reason is simple. The forces that typically support GBP are fading, while the headwinds are getting louder. 

First, the Fed's shift on 17 June matters because it changes the direction of travel for relative rates. Chair Warsh is running a more hawkish regime, with a clearer focus on getting US inflation back to 2% for the first time in more than five years. 

The second risk is that fiscal concerns re-emerge as a market theme. In the Autumn budget, Chancellor Reeves increased the fiscal buffer to GBP22bn. But buffers are only comforting if they stay intact, and the early signs are that it is already being eroded," HSBC notes.

"Politics is the third headwind.  we flagged the Makerfield by-election (18 June) as a key risk event... Burnham may be constrained by fiscal realities on one hand, but he's also promising change on the other. Markets will now wait for concrete policy proposals.

With Warsh's Fed pulling relative rates against GBP, fiscal headroom looking less secure, and politics adding uncertainty, we expect GBP-USD to drift lower over the next month," HSBC adds.

• EUR/USD posts new lows since Aug at 1.1405 Tues - held by 1.1400 option barriers and more tech supports

• FX options now well primed for deeper FX declines but expect premiums to increase again if 1.1400 breaks

• Aside from the broad demand for lower strike options, dealers report more interest to buy specific dates

• Post July 29 and Sept 16 Fed are increasingly popular, as are US jobs and inflation data releases in that time frame

• If July 17 Fed anything to go by - upcoming Fed meetings can create more of the volatility upon which FX options thrive
EUR/USD daily chart (EBS)


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

• EUR/USD -0.21%, USD/JPY -0.14%, GBP/USD -0.26%, AUD/USD -0.67%

• S&P E-minis -1.23%, DAX -1.07%, Nikkei 225 -3.55%, FTSE -0.28%

• New EUR/USD lows - bigger barriers/support levels now in play

• Yen remains at risk of a bigger decline

• GBP/USD on 1.32 handle as Burnham prepares for No 10

• AUD/USD falls to 11-week low as global stocks sag

• Option expiries . U.S. Open
(Martin Miller is a Reuters market analyst. The views expressed are his own)

June 23 (Reuters) - Cable has been in a steady downtrend since late April, and the technical picture suggests the selling pressure has further to run — with a key moving average now acting as the last line of defence before a significantly deeper decline. The British pound did move higher versus both the euro and dollar on Monday and early Tuesday following Prime Minister Keir Starmer's resignation announcement. But these gains proved to be short-lived and sterling has come under fresh pressure Tuesday. A resurgent dollar, a hawkish Federal Reserve, and lingering global risk aversion have all conspired to leave sterling with few friends in the market.

Sterling dropped 0.3% versus the dollar to $1.3180 in early Monday trading but closed the session at 1.3250. However, the pound has already lost around 3% since February as Starmer's leadership came under increasing threat from Labour party challengers.

From a technical standpoint, the rot set in during May, when cable broke below its 10-week moving average — a level that had previously acted as reliable support. That break confirmed sellers had wrested control, and the pair has drifted lower ever since. Sterling is now testing the 100-week moving average at $1.3192, a structurally significant level. A sustained close beneath it would open the door to the 200-week moving average at $1.2782 — a move of roughly 3% from current levels.

Starmer's resignation marks a significant political development, but the muted reaction in sterling suggests markets had largely anticipated the outcome. After weeks of speculation over his future, investors appear to view the announcement less as a shock and more as the formal conclusion of a process already priced into UK assets.

More importantly, GBP/USD is currently being driven by forces beyond Westminster. The resignation changes little about the fundamental drivers of the currency pair. If anything, sterling's inability to rally on an orderly political transition highlights the dominance of monetary policy and interest-rate expectations in current FX pricing.

Bears should not grow complacent, however. A recovery back above the 10-week moving average at $1.3419 would signal the selloff has exhausted itself and shift the near-term bias back to neutral. Until political uncertainty in the UK gets settled, sterling will face continued pressures.
GBP/USD weekly chart:


(Peter Stoneham is a Reuters market analyst. The views expressed are his own)

• AUD/USD slides to 0.6950 as global stock losses weigh on risk-sensitive AUD

• Kospi down 9.99%; Nikkei down 3.6%. 0.6950 is the lowest level since April 7

• 0.6979 (June 11 low) is now a resistance level, with 0.70 beyond

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

• Australia's tax overhaul chills nation's long love affair with property

• BofA, Deutsche Bank expect Fed to raise rates in September

AUDUSD


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

(Corrects Monday's daily range at the end of final line)

• Bessent-Katayama intervention talks late Monday flipped USD/JPY option sentiment, sparking a scramble for front-end downside

• 159.00 strikes popular, especially expiries post-NFP, as traders hedge growing perceived risk of intervention-driven drop

• JPY calls increase already high premium to puts — 1-month risk reversals from 1.2 to 1.45, reflecting growing downside risks

• 1-month implied vol edges to 8.0 - already up sharply from 6.3 last week, as breakout and intervention fears keep nerves on edge

• Spot USD/JPY steadies in tight 161.52-69 range on Tuesday after Monday's sharp retreat from 161.93 to 161.06
USD/JPY FX option implied volatility


USD/JPY 25 delta risk reversals


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

• Gateway Mining surges up to 13% to A$0.052, notching its sharpest intraday jump since April 20 and scaling to a one-and-a-half-week high

• Initial air core drilling at the Great Western project in Western Australia points to a broad, large-scale gold-silver system, the miner says

• Adds that unexpectedly strong silver hits across multiple holes are extending outward from the system’s gold-rich core

• Stock down 31.5% YTD
(Reporting by Kumar Tanishk in Bengaluru) ((; X: @thatstanishk Click here))

• Shares of Australia's Leeuwin Metals gain as much as 24.3% to A$0.23, their biggest intraday percent gain since May 19

• The mineral explorer says regional targeting identifies significant gold intercepts at the Marda Gold Project in Western Australia

• Around 1 million shares change hands, nearly 2.3x 30-day average

• Leeuwin stock up 28.8%, YTD
(Reporting by Keshav Singh Chundawat in Bengaluru)

• USD/INR opens at 94.69 against 94.6775 previous session

• Simmering expectations of Fed rate hikes boost USD; dollar index at 101, hovering near over one-year peak

• U.S. 2-year Treasury yields hit 16-month high on Mondayl Asian currencies mostly down between 0.1% to 0.5% on Tue

• Concurrently, retreat in oil and gold prices alongside lower USD/INR has spurred fresh round of importer bids, trader says

• Meanwhile state-run banks have been present on offer to curb sharp USD/INR gains, which is likely to continue, trader adds

• Break above 94.80 could open the door towards the next resistance zone around 95.20, per FX advisory firm CR Forex

• For more, click on [FXBUZ]

(Reporting by Jaspreet Kalra)

June 23 (Reuters) - USD/JPY appears to have found an equilibrium on the 161 handle as was the case on 159 and 160, where the threat of Japanese FX intervention previously saw the pair pause. Intervention did not materialise then, and with broad U.S. dollar strength, USD/JPY has pushed up to current levels. Admittedly the pair has risen on more than USD strength. A Bank of Japan viewed as behind the curve , re-widening of short-end Japanese government bond and U.S. Treasury yield differentials, ongoing geopolitical uncertainties and Japan's reliance on energy and other commodity imports helped . In addition to this, USD demand from Japanese importers has been almost constant. Foreign investors purchasing Japanese equities and related currency hedges have added to this demand. Barring fresh FX intervention, USD/JPY could head higher still. A surge is likely if Japanese importer option barriers in the 162.00 area are taken out. More are expected above, likely at each big figure higher and especially massive at the 165.00 strike. With Japan's Ministry of Finance and the BOJ's currency desk probably aware of these option knock-outs, Finance Minister Satsuki Katayama's call with U.S. Treasury Secretary Scott Bessent may have been a discussion to prevent the yen from weakening further , and . Defence of these option barriers has temporarily capped USD/JPY at Monday's 161.93 EBS high. Just above at 161.96 is the last peak on July 3, 2024. Above 162.00 and 163.00, there are highs of 163.36 and 164.74 dating back to December and November 1986, respectively. Related comments , , , .
USD/JPY daily:


Nikkei 225:


JGB-US Treasury 2-year interest rate differential:

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

• AUD/USD -0.2% Tue as downside bias continues to develop in Asia

• Rising Fed rate hike expectations combining with doubts on AU economy

• AU May CPI update due Wed (Reuters poll consensus -0.4% m/m, +4.3% y/y)

• AU May employment data due Thur, Reuters poll: +30k jobs, 4.4% unemployment

• Brent crude below $80 a barrel on appearance of U.S.-Iran peace progress

• AUD pushing lower hourly Bollinger band, break below 0.6980 tough short term

• RBA Deputy Governor Andrew Hauser speaking in Melbourne Wed

• Range Asia 0.6983-0.7003, support 0.6980 0.6834, resistance 0.7089 0.7200
AUD Daily 55-DMA


AUD Hourly Bollinger Study

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

• USD remain very much bid specially given fresh concerns over US-Iran

• USD/JPY as high as 161.93 EBS overnight, Asia so far today 161.55-62

• Japan FinMin Katayama spoke to US TsySec Bessent on the yen rate

• Some volatility on this news, USD/JPY from high o/n to 161.06

• Japanese intervention could be imminent, US Treasury to help?

• Some action may be necessary with Japanese importer 162.00 option KOs close

• Break above and stops would likely see another USD/JPY surge

• This is something Japan's MOF would like to avoid, more option KOs above

• Technically, resistance at 161.96 July 3 '24 high, then 162.00, 163.00

• Then 163.36 high dating back to December 1986, 164.74 in November 1986

• Hourly chart shows support from 161.14-31 ascending Ichimoku cloud

• As to vanilla option expiries today, some 161.00-20, 161.25 $945 mln

• Rise in US short yields as market discounts Fed hikes

• JGB-US Treasury 2-year rate differentials wider to @280 bps, 10s @180 bps

• Related comments , , ,

• And , also , on FX action ,

• US markets , , ,

• On US-Iran , Fed-speak ,
USD/JPY daily:


USD/JPY hourly:

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

• NZD/USD -0.5% from Mon 0.5740 high as buyers for the pair remain absent

• Break below 0.5680 support zone would likely hasten move toward 0.5580

• Escalating Fed hike expectations drive UST yields higher across the curve

• U.S.-Iran peace deal progress sends oil lower on easing supply concerns

• Futures pricing implies 81.5% chance of RBNZ hike Jul 8, but not helping NZD

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

• Range NZ 0.5710-17, 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.)

• GBP/USD +0.5% from Mon 1.3180 low in wake of U.K. PM Starmer's resignation

• Indications of orderly transition of power to Andy Burnham well received

• Positive progression of U.S.-Iran peace talks eases oil supply concerns

• Brent crude -3.0% to $78.15 a barrel Mon after early buying pressure abates

• 2-year UST yields hit 16-month high Fed rate hike expectations grow

• GBP recovering from near 1.3160 support, may climb further short term

• Range Asia 1.3250-525, 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.)

MUFG Research discusses the Fed rates outlook.

"The US dollar has continued to trade at stronger levels overnight after breaking higher least week triggered by the hawkish repricing of Fed rate hike expectations. The dollar index briefly rose back above the 101.00-level on Friday for the first since May of last year. At the same time, the 2-year US Treasury yield has risen back above 4.20% for the first time since February of last year prior to President Tump’s “Liberation Day” tariffs announcement in April 2025," MUFG notes.

"The recent run of positive US economic data surprises and hawkish Fed policy communication has encouraged market participants to price in almost a 50:50 probability of a rate hike as soon next month. With the US mid-term election taking place later this year in November, it could be easier for the Fed to hike rates sooner rather than later. In addition, if they hold off from hiking rates soon then slowing inflation from lower energy prices and the fading impact of tariff hikes should dampen the need for hikes later this year as well," MUFG adds.

• AUD/USD -0.2% late Mon after U.S. & Iran wrapped up first round peace talks

• Brent crude -3.0% to $78.15 a barrel after early spike on re-escalation fear

• 2-year UST yields reach 16-month high as Fed hike bets build; DXY +0.2%

• AUD downtrend developing, break below 0.6980 will trigger move toward 0.6834

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

• RBA Deputy Governor Andrew Hauser speaking in Melbourne Wed

• Overnight range 0.6994-0.70135, support 0.6980 0.6834, resistance 0.7089
AUD Weekly 52-WMA

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

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