Danske and Bank of America Global Research preview tonight's RBNZ policy meetings.

"Overnight, we expect the Reserve Bank of New Zealand (RBNZ) to hike its Official Cash Rate by 25bp to 2.50%, in line with consensus. Markets see the move as likely, but not a fully done deal, with about 75% likelihood priced in. RBNZ was close to hiking at the previous meeting back in late May (vote split 3-3), and the rate path signalled a high chance for a hike during Q3. A hike could provide temporary support for NZD/USD, but looking further ahead, we expect the cross to trade near its current level of 0.57 over the coming year," Danske notes.

"We expect the RBNZ to increase the OCR by 25bp to 2.5% on July 8, but it's a close call and a split decision is likely. The RBNZ's projected OCR path in the May MPS suggests a July hike, and the Governor signalled further OCR increases in coming meetings. While oil prices are currently lower than the RBNZ expected in May, this largely reduces tail risks and inflation is still expected to stay well above target through 2026. Recent GDP data suggest less spare capacity when the Iran shock hit, which increases the risk of second-round effects. With inflation above target and upside risks, a risk management approach supports a hike now to a more neutral stance, reducing the risk of a more disruptive tightening later," Danske adds.

• Morningstar notes gold prices continue to fall, with gold miners' shares remaining expensive in trading at 30% to 180% above fair value

• Also flags that despite recent declines, gold prices are still up about 150% since late 2022 on worries over tariffs, geopolitical issues, Western government fiscal deficits and debt levels and a weaker U.S. dollar

• Morningstar cuts fair value estimate for Evolution Mining

by 4% to A$4.5

• Investment research firm also reduces fair value estimate for Northern Star Resources and Perseus Mining by 5% to A$14.2 and 6% to A$3, respectively

• Morningstar notes elevated gold prices are driving strong M&A activity while also incentivising organic growth; Northern Star being pressured by activist investor Elliott to sell all or part of the company

• ASX Gold Index down 16.2% so far this year, as of last close
(Reporting by Nikita Maria Jino in Bengaluru)

• NY opened near 1.1435 after EUR/USD hit 1.1449 overnight, the pair lifted early

• Softer US dollar, US yields & upward moves in gold, silver & stocks lifted EUR/USD

• 1.1442 traded but sellers then emerged and the pair fell to 1.1418

• Rally in oil, USD/CNH & firmer USD, US yields helped to weigh down EUR/USD

• The pair bounced &neared 1.1425 late, it traded down -0.15% in NY's afternoon

• Falling daily RSI and pair's hold below the 21-DMA may be worries for EUR/USD bulls
eurusd


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

ANZ Research previews tonight's RBNZ policy meeting.

"We expect the RBNZ to raise the Official Cash Rate (OCR) 25bp to 2.50% on Wednesday. In uncertain times, it's all about risk management. With the OCR still 75bp below the RBNZ's central estimate of neutral, growth conditions supportive, the NZD much softer than assumed, and inflation set to sit above the band for a period, it's sensible to get a hike under the belt, despite the sharp fall in oil prices," ANZ notes.

"We expect a relatively short statement that sounds open-minded about what comes next - at this stage there's little to be gained from sounding more certain than warranted about what the next few months will bring," ANZ adds.

• NY opened near 0.6945 after AUD/USD traded 0.6960-0.6936 overnight

• The pair rallied early as stocks, gold, silver moved upward & USD softened

• AUD/USD then fell as oil & USD/CNH rallied while gold, copper, silver sank

• Firmer USD, US yields also helped drive AUD/USD downward

• 0.6934 traded, the pair then neared 0.6940 late, it traded down -0.24%

• Daily RSI diverged & pair is below the 21-DMA, could be concerns for bulls
audusd


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

Credit Agricole CIB Research previews tonight's RBNZ July policy meeting.

"The market is too complacent about a rate hike by the RBNZ on Wednesday. The rates market is about 70% priced for a 25bp hike after the central bank narrowly missed hiking rates in May in a split vote where the Governor Anna Breman cast the vote to keep rates on hold. We think that this week's meeting will be another close call and a split vote," CACIB notes.

"The knee-jerk reaction in the NZD would be lower in the event of the RBNZ holding off raising rates. We think this move lower in the currency would be restricted by hawkish rhetoric and the view that the RBNZ is merely delaying the inevitability of higher rates by only six weeks and until the next MPS," CACIB adds.

• AUD/NZD bias remains constructive, despite recent price action stalling ahead of the 1.23 handle

• Trend structure intact, with spot holding above the 100-day MA cluster that has underpinned the move

• Cycle high at 1.2284 remains the immediate topside focus

• Near-term macro catalyst: RBNZ policy decision (Wed)

• Risk skew tilted dovish, with recent oil price correction reducing pressure to tighten

• Policy guidance likely to pivot toward data dependency, stepping back from a firm hiking bias

• This poses downside risks for NZD near-term

• AUD/NZD upside remains open, with scope to break and extend through cycle highs if dovish repricing materialises
AUDNZD daily chart


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

Bank of America Global Research discusses the scope for another round of FX intervention by Japan's MoF.

"Our usual checklist for FX intervention has mostly been ticked off. The following factors typically precede MoF intervention: a new cyclical high in USD/JPY, unstable JGB market, "behind the curve" market narrative on monetary policy, two consecutive days of sharp USD/JPY gains driven by yen weakness rather than US dollar strength and MoF's currency chief Mimura's comments," BofA notes.

"Higher volatility is perhaps the only condition that has not been triggered - 1m implied volatility has risen but not above 8%, the level before the April intervention," BofA adds.

Goldman Sachs Research revises its EUR/USD forecasts lower.

"For much of the past few months, we have said that economic trends should support the Dollar against low yielders on a tactical horizon, and revised our forecasts in that direction in mid-March. We increasingly think these forces look likely to linger for longer, and we are unlikely to return to broad-based, sustained Dollar depreciation for some time," GS notes.

"To reflect an ongoing divided Dollar environment, we are revising our forecasts for EUR/USD to 1.14, 1.12 and 1.12 in 3, 6 and 12 months (from 1.14, 1.18 and 1.20 previously)," GS adds.

• Cable has traded a 23.8 pip range since the London open; 1.33695-1.33933

• The peak of that range is 7.2 pips shy of Asian session three-week high

• Pound hit new one-year high vs euro, 1.1718, during the European morning

• Sterling buoyed by positivity towards presumptive UK PM Burnham

• Britain will need vast fiscal tightening to avoid debt spiral, OBR predicts

• BoE is worried about risks hitting simultaneously, Bailey says

GBPUSD


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

July 7 (Reuters) - A bounce off a key technical support has shifted the near-term bias for the Australian dollar, with improved risk appetite and a reassessment of U.S. rate expectations adding further fuel to the recovery.

AUD/USD had been grinding lower in a choppy downtrend since posting a cycle high of 0.7277 in early May. The correction found its floor at 0.6862 on June 30, where the 200-day moving average - a dynamic support that has underpinned the market since November - successfully defended the trend. That level, now at 0.6871, remains the pivotal technical reference. A sustained close below it would neutralise the recovery thesis.

For bulls, Fibonacci retracement levels drawn off the 0.7277–0.6862 May-to-June bear leg offer a clear roadmap. The 38.2% retracement at 0.6963 represents the minimum corrective objective, with the 50% level at 0.7072 and the 61.8% Golden Ratio at 0.7120 providing progressively more significant resistance targets. Notably, a daily Ichimoku cloud twist between 0.7088 and 0.7093, projected out to July 22, converges closely with the 50%-to-61.8% retracement zone. Cloud twists following a potential trend reversal have a well-documented tendency to act as price magnets, reinforcing this as a high-conviction target band.

On the macro side, interest rate divergence remains the dominant driver. The Reserve Bank of Australia's June policy meeting has been interpreted hawkishly by the market, with analysts citing persistent excess demand and capacity constraints as evidence that the bank is in no rush to pivot dovish. This stands in contrast to growing expectations for Fed easing, a dynamic that continues to compress the yield differential in Australia's favour and underpin AUD demand.

That said, the recovery narrative carries meaningful tail risks. Australia's May trade balance unexpectedly swung to a deficit of AUD 3.02 billion - the largest shortfall since December 2015 - a reminder that the commodity export story is not without cracks. Any renewed deterioration in risk sentiment or a hawkish Fed repricing could quickly expose the fragility of the current bounce. Traders should treat the 200-day moving average as the line in the sand: while it holds, the path of least resistance favours the upside, but conviction above 0.7072 will be needed to confirm a more durable trend reversal.
AUD/USD daily chart:


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

• USD/JPY price action remains jittery. Intervention risk still elevated at current levels

• Spot easing off overnight highs (162.18), though downside remains shallow for now

• Japan FX diplomat flagged ongoing coordination with South Korean counterparts

• Continued lack of action from MoF has emboldened yen shorts in the near term

• That said, risk profile remains asymmetric, with scope for a sharper corrective move lower

• Near-term catalyst vacuum persists, leaving carry dynamics supportive - JPY negative at the margin

• Levels in focus: Resistance: 162.50, 162.84 (cycle high). Support: 160.70 (prior intervention zone), 160.00
USDJPY hourly chart


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

• Forward-looking FX options have seen increased demand for USD/JPY strikes as high as 165.00

• A break above 163.00 barriers would benefit holders - amplifying volatility and extending upside potential

• These flows signal the market isn't ruling out further upside, with 165.00 mooted as a new potential BoJ line in the sand

• For now, USD/JPY remains anchored well below 163.00, pressuring implied volatility and option premiums

• Risk reversal contracts retain a firm JPY call premium over puts - underscoring the ever-present threat of intervention
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)

• Cable has traded a 22.5 pip range thus far Tuesday; 1.3378-1.34005

• 1.34005 is the highest level since June 17 (hawkish Fed hold that day)

• 200DMA helps define that high. 1.3329-1.3397 was Monday range

• CFTC data: net GBP short fell 3% to 102,147 contracts in week to June 30

• Modest dip followed 47% jump to nine-year high in the prior week

• Britain's bond market may limit what Burnham can do as PM

GBPUSD


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

• FX option strikes expire at 10am New York/14:00 GMT on Tuesday July 7

• EUR/USD: 1.1350 (1.5BLN), 1.1400 (1.25BLN), 1.1425-30 (955M), 1.1440-50 (1BLN), 1.1490-1.1500 (3.3BLN)

• USD/CHF: 0.8000 (402M), 0.8115 (601M)

• GBP/USD: 1.3350-60 (817M). EUR/GBP: 0.8660 (337M)

• AUD/USD: 0.6925-30 (1BLN), 0.6960-70 (465M), 0.7000 (272M)

• USD/CAD: 1.4100 (739M), 1.4250 (297M)

• USD/JPY: 161.00 (702M), 161.20 (626M), 161.50 (718M), 162.00 (2.7BLN), 162.45-50 (1.1BLN)

• EUR/JPY: 183.75 (240M), 185.90 (200M)

• FX options wrap - Summer calm before US CPI storm? (Richard Pace is a Reuters market analyst. The views expressed are his own)

• USD/CNH inches up to 6.7970, probing 55 DMA, Ichimoku cloud resistance

• Chart barrier around 6.7960 deflected attempt to rally on Monday

• Another failure could see a potential break of 21 DMA support 6.7847

• As USD/JPY tips over 162.00, long-USD bets in AXJ may pare as well

• PBOC says China, HK to expand Bond Connect quota

• Also says national FX reserve will increase investment in HK markets
CNH


(Ewen Chew is a Reuters market analyst. The views expressed are his own.)

• GBP/USD stays supported in Asia after closing 0.3% higher on Monday

• Holds overnight gains as dollar sags on waning Fed rate hike expectations

• Buoyed by strength vs peers; EUR/GBP languishes at a 1-year low

• GBP/JPY hovers near 18-year highs after hitting highest since the GFC

• Traders await likely PM Andy Burnham's finance minister pick

• Polymarket gives Ed Miliband a 55% chance of becoming finance minister

• Could weigh on GBP given his preference for more expansive fiscal policy

• Strong resistance at 1.3400-10, 50% of May-June drop and a cluster of MAs

• Support 1.3330-40; Monday range 1.3329-1/3397, Asia 1.3389-1.3400
GBP:

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

• Australian gold miners fall as much as 3.1%, their biggest intraday pct decline since June 30

• Gold prices fell on Tuesday, as investors looked ahead to the release of the U.S. Federal Reserve's June meeting minutes for insight into new Chair Kevin Warsh's monetary policy direction [GOL/]

• Sector heavyweight Evolution Mining sheds 3.7%, and Northern Star Resources slides 3.2%

• YTD, sub-index down more than 21%

(Reporting by Shruti Agarwal in Bengaluru)

• USD/KRW shows resilience in the face of KOSPI tanking 4.2%

• Last 1430.1 even as USD/JPY ekes out gains above 162.00

• Potential USD/JPY rally may be next catalyst for USD/KRW

• But while 21 DMA caps at 1532.4, upside room remains limited

• Recent sharp drops may have left some longs stranded still

• S. Korea officials jawboning last week may also lure cherry-pickers
KRW


(Ewen Chew is a Reuters market analyst. The views expressed are his own.)

• USD/JPY rallied back to 162.43 EBS yesterday after no Japan FX intervention

• Asia so far today 162.01-16, on buoyant side, could head higher

• Some resistance though from descending hourly Ichi tenkan at 162.16

• 161.92 kijun support? Descending 100-HMA 161.91, ascending 200-HMA 161.90

• Hourly cloud below between 161.18-55

• $2.7 bln in option expiries today at 162.00 providing gravitational pull

• Large below and above too, to help contain spot

• Japanese importer demand out of Tokyo to remain relentless, retail too

• Rallies in Japanese equities, foreign buys to trigger currency hedges again

• Little relief seen for JPY with BOJ behind the curve, no MOF FX action

• Intervention risk still seen however, especially closer to 163.00

• JGB-US Treasury rate differentials narrower, in 10s especially at @163 bps

• This JPY supportive but difficult to say to what extent

• Related comments , , ,

• Also

• US markets , , ,
USD/JPY:


Nikkei 225:

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

• AUD/USD winches higher to 0.6956, with risk-on fuelling gains

• But even after escaping Bollinger downtrend channel, bulls face a test

• Looming 21 DMA at 0.6975 may attract some profit-taking offers

• A hard shove will be needed to break that key technical resistance

• If it cracks, Bollinger uptrend channel at 0.7034 will attract bulls

• ASX ebbs -0.1% while Asia FX markets eye USD/JPY nervously
AUD


(Ewen Chew is a Reuters market analyst. The views expressed are his own.)

ANZ Research discusses its latest outlook for the Fed rates trajectory.

"Our baseline view is that the Fed is on an extended pause into the middle of next year before it will gradually ease rates by 50bp, subject to how data evolve in coming months, particularly the evidence on inflation pass-through," ANZ notes.

"We judge price shocks have not driven a persistent acceleration in broader inflation, while there is some evidence that the inflationary threats of recent price shocks are waning. Moderating wage settlements, well-anchored inflation expectations, gradually slowing median and trimmed mean inflation all support this conclusion. An extended pause should ensure inflation returns to target," ANZ adds.

• EUR/USD off session lows to trade broadly flat, ranges tight (1.1410–1.1450) with catalysts lacking

• Market reluctant to chase EUR upside evidenced by backing off from post-payrolls squeeze high at 1.1473

• 1.1473 now the key near-term, break opens up 1.15. Failure keeps downside risks in play

• Light data calendar reinforces consolidation bias into US.. CPI (14 July)

• Support at 1.1350–1.1360, then 1.1300–1.1320
EURUSD hourly chart


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

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

"The risk of intervention reduces the demand for being long USD/JPY as a carry trade. And the MoF has enough FX reserves to perform over 15 more FX interventions of the size it did during April and May. With USD/JPY clearing the important 162 level, however, the key battleground for the exchange rate in the 162-164 region has opened up. The decline in USD/JPY over the past year has now reached double digits accelerating its upward pressure on inflation. This will anger voters. While the government is already doing quite a bit to relieve inflation pressures on households including subsidised retail energy, fuel and utility bills, Japan’s households know a higher USD/JPY will eat into these subsidies," CACIB notes.

"In the end, Japan benefits from a weak JPY and so has to manage the political and economic realities around the currency. The weak JPY is boosting company profits, exports and importantly is helping lift domestic investment to the levels Takaichi wants to see during her tenure. So we think Japan’s authorities will continue to manage a weak JPY but avoid USD/JPY moving above 164 in the long term," CACIB adds.