• USD net G10 spec short pared by $4.1bn in May 14-20 IMM period; $IDX -0.95%

• Specs bottom-fishing the USD in earnest, USD short dropped after US-China tariff delay

• EUR$ +0.88% in period, specs -10.3k contracts now long 74.5k contracts

• $JPY -1.96%, specs sold 5k contracts now long 167.3k contracts, still significant

• GBP$ +0.6%, specs -3.2k contracts long dips to 24k contracts

• $CAD -0.14%, specs -21.7k contracts now -103.9k contracts

• AUD$ -0.69%, specs -9.7k contracts now -59.1k; global growth (China) still a concern

• Note; today's renewed Trump tariff threats weighed heavily on USD, likely moots USD bid

Majors w/IMM Positioning Chart:


IMM Position Table as of May 20:


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

• USD/JPY and broader dollar slide after Trump threatens phonemakers, EU with tariffs

• Stocks and Trsy yield are lower though off worst level of day; gold up 2%

• Fed speakers say tariffs causing business uncertainty

• Pair stays on back foot due to new DXY May low and YTD low for USD/CNH

• US-Japan trade talks set for the weekend; BOJ Gov Ueda next week

• Vols firm and downside option skews widen as pair nears 140

• Lower highs weighs; filled prior May 6 hourly gap near 142.50

• Resist: 144.27 base line; 144.58 21-DMA; 145.68 cloud bottom

• Supp: 142.36 May 6 low; 141.68 April 22 high; 139.89 YTD low

• Yen crosses mixed; EUR/JPY tests 100-DMA and lower Bollinger
Yen


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

• NY opened near 1.1350 after 1.1280 traded on EBS overnight, wild price swings early

• President Trump's tariff threats to the EU and Apple iPhones drove the move

• EUR/USD spiked up to 1.137525 on the Apple headline, hit 1.1299 after the EU headline

• Buyers emerged however as US assets and the dollar came under bearish pressure

• Yields , stocks & USD/CNH fell while gold

rallied

• EUR/USD neared 1.1360 as US$ remained heavy, p[air traded up +0.71% late in the day

• Techs lean bullish; RSIs rising, pair above 5- & 21-DMAs, 1.1280/1.1300 support zone
eurusd


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

Synopsis:

Société Générale highlights that elevated correlation between EUR/USD and USD/JPY has resulted in a tighter, more stable EUR/JPY trading range, and they expect this to persist as further USD weakness unfolds in H2.

Key Points:

• EUR/JPY Stuck in a Range:
  Unlike the more directional USD/JPY, EUR/JPY has been range-bound since the risk-off episode last August, showing muted volatility despite broader FX swings.

• Correlation Spike Post-Tariffs:
  Since the reciprocal tariff announcements in April, EUR/USD and USD/JPY have moved increasingly in tandem, compressing EUR/JPY volatility and tightening its range.

• USD in the Driver’s Seat:
  The US dollar is the dominant factor across major FX pairs currently, making EUR/JPY a derived cross-rate that reflects USD's behavior more than independent euro or yen dynamics.

• Outlook for H2:
  As USD weakness resumes in the second half of 2025, SocGen expects the high correlation between EUR/USD and USD/JPY to persist, further reinforcing the EUR/JPY range.

Conclusion:

EUR/JPY is likely to remain anchored in a narrow band in the near term, driven by the dominance of USD correlations. Investors should not expect breakout moves unless the USD’s influence on both legs of the cross diminishes.

(Updates)

• Shares of gold miners rise, tracking gains in bullion prices [GOL/]

• Spot gold up ~2% at $3,357.71/ounce

• Gold prices rise on a weaker U.S. dollar and renewed tariff threats from U.S. President Donald Trump

• A weaker U.S. dollar makes the greenback-priced gold cheaper for holders of other currencies

• Top miners: Newmont up 1.5%, Barrick Mining

rises marginally

• U.S.-listed shares of South African miners: Gold Fields

rises 4.3%, Harmony Gold up ~4%, AngloGold Ashanti gains 2.8% and Sibanye Stillwater rises ~2%

• Canadian miners: Agnico Eagle Mines up 2.6% and Kinross Gold gain 1%

(Reporting by Sumit Saha in Bengaluru)

Synopsis:

Credit Agricole sees the return of the "USD frown"—the relationship between USD and US equity/FI performance—driving near-term USD weakness. But they dismiss fears of a full-blown crisis akin to the UK’s "Truss moment," citing continued global demand for Treasuries and the USD’s reserve status.

Key Points:

• USD Selling on Risk Aversion:
  Investors are selling USD as US equities weaken and Treasury yields rise, fearing capital outflows and fragility in US fixed income following Moody’s sovereign downgrade.

• Political and Policy Concerns:
  Stalled fiscal stimulus talks in Congress and Fed commentary on stagflation risks have amplified worries over the macro backdrop and reinforced the USD’s vulnerability to risk sentiment.

• But No 'Truss Moment':
  Credit Agricole does not expect a disorderly selloff in US debt akin to the UK gilt crisis under PM Liz Truss. They argue long-end yields may stabilize, especially given the USD and USTs remain global reserve anchors.

• Structural USD Support Intact:
  Despite near-term volatility, global demand for USD assets remains resilient, which should cap USD downside, especially against currencies from economies with weaker fundamentals or lower yields.

Conclusion:

While the USD is under pressure from equity and bond market jitters, Credit Agricole sees this as a tactical adjustment rather than a structural shift. The market is not pricing in a systemic credibility shock like the UK faced in 2022, and the USD’s reserve status should limit sustained underperformance.

• Dollar selling fuelled cable rise to new 39-month high of 1.3533 at 1247 GMT

• Start point for upleg to 1.3533 was 1.3474 (six pips above Wednesday's high)

• That 1.3474 low was plumbed as EUR/USD sank on Trump's 50% EU tariff threat

• EUR/GBP simultaneously fell to lowest level since April 3 as EUR/USD sank

• Cable high before Trump's EU post was 1.3515, as Trump's Apple post hurt USD

• EU trade chief Sefcovic and U.S. counterpart Greer due to speak at 1500 GMT

GBPUSD

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

Synopsis:

Bank of America maintains a bullish USD/JPY outlook, projecting the pair to rise to 155 by end-2025, citing a mix of domestic political, fiscal, and trade-related risks in Japan. They expect JPY and JGBs to weaken over the summer as structural pressures mount.

Key Points:

• Japan-US Trade Talks Stalled:
  Lack of progress in bilateral trade negotiations reduces the appeal of Japanese assets, potentially delaying BoJ hikes and creating a twist-steepening in the JGB curve.

• Fiscal Concerns Grow:
  Calls for tax cuts from opposition parties and even some ruling coalition members threaten fiscal discipline. With PM Ishiba’s approval ratings under pressure, fiscal expansion may become unavoidable—bearish JPY and JGBs.

• Political Instability Risk:
  Upcoming Upper House elections could lead to leadership changes or a coalition shift, adding policy uncertainty and weakening investor confidence in Japan.

• BoJ Policy Outlook:
  BofA continues to expect no additional BoJ rate hike until April 2026, leaving Japan at the mercy of structural capital outflows and a widening policy divergence with the Fed.

Conclusion:

BofA sees JPY vulnerability building into the summer, driven by political risk, stalled reforms, and widening fiscal concerns. Their base case remains USD/JPY at 155 by year-end, assuming a Fed on hold and no near-term BoJ hikes. Investors should prepare for continued JPY and JGB weakness amid these domestic pressures.

Synopsis:

ANZ expects EUR/USD to trade within a 1.11–1.13 range in the coming week, citing soft Eurozone PMI data, waning economic surprise momentum, and limited upside catalysts. With ECB easing priced in and geopolitical factors adding uncertainty, downside risks outweigh upside potential.

Key Points:

• Soft Eurozone PMIs Undermine Growth Narrative:
  EA composite PMI fell to 49.5 in May vs. 50.6 expected, led by a steep drop in services new business. Germany’s services PMI hit a 2.5-year low at 47.2, challenging optimism around EUR on growth differentials.

• Muted Reaction Expected from Upcoming EU Data:
  Next week’s negotiated wages and inflation expectations are unlikely to shift EUR materially, with ECB easing expectations already priced.

• Geopolitical Risks Pose Event-Driven Volatility:
  Informal Russia-Ukraine ceasefire discussions and G7 FX negotiations may cause headline-driven volatility. While there are fears of a USD-weakening deal, ANZ notes no firm signal from the US suggesting such a move.

• Focus Shifting to US Data and Fiscal Risks:
  The EUR remains vulnerable to stronger-than-expected US data, which could rekindle USD demand. Conversely, geopolitical de-escalation or risk-off shocks could modestly benefit the USD.

Conclusion:

ANZ sees the EUR/USD facing resistance near 1.13 and fading optimism amid soft European data. They expect range-bound trading between 1.11 and 1.13, with greater downside risk if US data strengthens or safe-haven flows return.

• AUD/USD rallied 0.64085-0.6465 overnight, NY opened near that high, up +0.83%

• US yield drops sank US$ which lifted AUD/USD above the 200-DMA

• USD/CNH fell sharply, traded 7.2043-7.1742 and was down -0.34% in early NY

• Gold and copper gains helped give AUD/USD an added boost

• Rising monthly RSI, consolidation phase are bullish signals

• Pair's struggles above the 200-DMA, round top pattern likely concern longs

• Fed's Musalem, Schmid, Cook to speak Friday, may impact risk sentiment
audusd


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

• Cable rises to 1.35 as pound benefits from UK April retail sales data beat

• Up 1.2% MM vs 0.2% f/c. First time GBP/USD has traded at 1.35 since Feb 2022

• Dollar is suffering on U.S. fiscal health worries

• Cable bull targets include 1.3750 and 1.40 (last at 1.40 in June 2021)

• 1.3468 (Wednesday high) is now a support point, pre-1.3440 (Thursday top)

• UK removes official accreditation from past producer price data

GBPUSD

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

May 23 (Reuters) - Sterling bulls are making hay while the sun shines, and hoping the foreign exchange market and the weather, continue to smile on them through the summer months.

Data published on Friday showed UK retail sales rose by a much higher than expected 1.2% MM in April, helped by an unusual amount of sunshine.

The data beat underpins the expectation that the Bank of England will leave interest rates unchanged in June, following its relatively hawkish rate cut on May 8.

It also lifted GBP/USD to 1.3493, its highest level since February 2022.

CFTC data on FX positioning due at 1930 GMT will show if the net GBP long rose ahead of Wednesday's hotter-than-expected UK inflation data -- which also buoyed sterling -- after falling for the first time since mid-April in the week ended May 13, by 7% to 27,216 contracts.

Related comments:
GBPUSD

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

• Shares in Koza Altin drop around 4% after it posted a lower-than-expected Q1 profit

• The Turkey-based gold mine operator reports a net profit of 506.1 million lira ($13 million) vs a loss of 252.5 million in Q1 2024

• This is significantly below market expectations of 1.34 billion lira, brokerage Global Yatırım says

• "Higher gold prices supported revenues, but sharp increase in per-ounce monetary costs weighed heavily on operational profitability and bottom-line performance," the broker adds

• The company's stock is among the worst performers on Turkey's main BIST-100 index
($1 = 39.0273 liras)

(Reporting by Arda Dipova and Canan Sevgili)

• Cable rises to 1.3481 after much better than expected UK retail sales data

• Up 1.2% MM in April vs 0.2% forecast. 1.3481 is highest level since Feb 2022

• Corporate/option-related offers may emerge near 1.35 if ascent extends

• 1.35 was 2009 low - the base level from 1986 until 2016 Brexit referendum

• 1.3440 (Thursday high) is now a support point (1.3992 was Thursday low)

• Energy regulator Ofgem lowers price cap on UK household energy bills by 7%

GBPUSD

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

• EUR/USD trades 1.1280-1.1327 Friday, inside Thursday's 1.1344-1.1255 range

• Pre UK/US long weekend holiday to aid consolidation, huge expiry hedging too

• A massive 7-billion euros of strikes expire within the recent range Friday

• Related hedging flows around strikes can add congestion within range

• Implied volatility retraces mid week surge, but well above last weeks lows

• Topside over downside strike premiums on risk reversals mildly lower, too

• However, they stay near 5-year highs and flag strong upside risks to EUR/USD

• FX options wrap - Pricing a lull before next USD drop
EUR/USD option risk reversals


EUR/USD FXO implied volatility

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

• Cable hits 1.3462 as pound benefits from UK April retail sales data beat

• Up 1.2% MM vs 0.2% f/c. 1.3462 is six pips shy of Wednesday's 39-month peak

• Strong UK retail sales data underpins expectation of BoE rate hold in June

• 1.3392-1.3440 was GBP/USD range on Thursday. G7 glosses over tariffs

• UK's Ofgem lowers price cap on UK household energy bills by 7%

• U.S. Supreme Court ruling eases worries over Trump's ability to fire Powell

GBPUSD

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

• USD/JPY falling back in Asia following rebound of sorts to 144.40 overnight

• Asia 144.02 to 143.54 EBS, most see downtrend intact

• Spot back below hourly Ichimoku cloud after foray in yesterday on rebound

• Descending cloud currently 143.80-144.35, resistance now with 144.25 100-HMA

• Daily chart shows spot continue to fall with its Ichimoku cloud

• Cloud between 145.68-148.21 today, spot also below flat 144.26 100-HMA

• Massive 143.00-05, 143.20-50, 144.00 option expiries today containing action

• EUR/JPY 162.38-61 EBS, inside day after 161.85-163.36 wide range yesterday

• GBP/JPY 192.83-193.36, tad heavy, follows 191.82-193.57 range yesterday

• AUD/JPY heavy, 92.12-44 after 91.95-92.83 yesterday, well below 95.63 May 13

• EUR/JPY 160.90-161.00 E720 mln, 163.30-35 E541 mln option expiries today

• AUD/JPY sees A$350 mln in option expiries today too at 92.00 strike

• With little in fresh news out of the G7, on trade, JPY to stay better bid?

• PM Ishiba spoke with Trump but no specifics ,

• Japan envoy Akazawa heading to US for trade talks ,

• Japan April core CPI high, BOJ to maintain hawkish bias but no hike soon

• Related comment , also , on Japan CPI

• Comment on BOJ , for more click on [FXBUZ]

USD/JPY hourly:


EUR/JPY hourly:


AUD/JPY hourly:

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

Synopsis:

ING flags that markets may be pricing in geopolitical risk after reports that the ECB has asked banks to stress test their USD funding needs. While this raises questions about future Fed support, ING believes a EUR/USD move to 1.150 is premature.

Key Points:

• ECB USD Stress Test Request:
  Reuters reported that the ECB has asked European banks to assess their reliance on USD funding in case the Fed restricts access to emergency swap lines—a move viewed as precautionary but unusual.

• Market Reaction and Risk Perception:
  Though the scenario is considered unlikely, ING warns that if markets view it as credible, it could hasten portfolio and funding diversification away from the dollar.

• EUR/USD Near-Term Outlook:
  ING believes a rally to 1.150 in EUR/USD is premature at this stage, given the absence of hard data showing serious US economic damage from tariffs.

Conclusion:

While stress-testing of USD funding points to rising systemic concern, ING maintains a cautious stance on EUR/USD upside, arguing that without clear signs of US economic strain, a break toward 1.150 lacks solid justification.

• AUD/USD +0.3% from Fri 0.64085 low on deteriorating USD sentiment

• Anxiety over Trump's tax bill and its impact on U.S. debt the main theme

• Break & hold above 0.6450 200-DMA remains aspirational, needs fresh catalyst

• RBA Governor Bullock in CN May 28-30, meeting with local counterparts

• Significant AU Apr CPI & retail sales, Q1 capex data all due next week

• Range early Asia 0.64085-31, support 0.6390 0.6355, resistance 0.6550
AUD Hourly Bollinger Study

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

• USD/JPY off to 142.80 EBS yesterday, some bounce but upside likely limited

• Asia 143.76-144.02 so far, resistance from 144.26 flat daily Ichimoku kijun

• Descending daily cloud also 145.68-148.21 above, spot falling with cloud

• Bounce from low yesterday took spot back into hourly Ichimoku cloud for time

• Spot breaking back below this 143.86-144.40 descending cloud now

• Hourly cloud to continue to limit moves up with 144.30 descending 100-HMA

• Plenty of option expiries in area today between 142-145 handles

• Nearby 143.00-05 $2 bln, 143.20-50 $1.7 bln, 144.00 $2.4 bln

• These expiries could help contain spot to 143 handle today

• US yields off from recent highs, JGB yields heading for March highs?

• Some pre-weekend USD buy-backs possible but JPY likely to remain better bid

• Related comments , , ,

• And , , , also

• US markets , , ,

• US news , data , for more click on [FXBUZ]

USD/JPY daily:


USD/JPY hourly:


USD/JPY nearby option expiries into next week:

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

• Up 0.05% after closing down 0.4%, as the U.S. dollar bounced 0.35%

• Thursday's dip is a healthy correction after three days of EUR/USD gains

• PMI data disappointed the euro zone optimists, though German ifo firmed

• Global bond markets signal governments must pay more to borrow long-term

• Charts- 21-day Bolli bands contract, 5, 10 & 21-day moving averages coil

• Horizontal daily momentum studies - daily signals show no strong bias

• Tuesday's 1.1218 base then last Friday's 1.1131 low are initial supports

• This week's 1.1362 top and the May 1.1381 high are the first resistance

• 1.1275 1.502 BLN, 1.1295 573 mln, and 1.1300 1.843 BLN close May 23 strikes
Andy

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

• NZD/USD -1.1% from Wed 0.59665 high after NZ budget clarifies outlook

• Restrained NZ budget announced Thur flags further monetary easing ahead

• May 28 RBNZ meeting comes into focus, expected to cut OCR 25 bps to 3.25%

• NZ Q1 retail sales remain relatively subdued: +0.8% q/q & +0.7% y/y

• NZD sitting above 0.5878 200-DMA, may cede significant ground on break below

• Range early Aisa 0.5899-0.5900, support 0.5845 0.5680, resistance 0.6030
NZD Daily 200-DMA


NZD Hourly Bollinger Study

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

• AUD/USD -0.7% from Thur 0.6459 high as U.S. debt anxiety temporarily eases

• Pair once again fails to hold above 0.6450 200-DMA, has become AUD's nemesis

• Trump's tax bill passes U.S. house vote 215-214, USD sentiment less negative

• RBA Hauser says AU exporters upbeat on CN, citing scale/cost advantages

• Key AU CPI, capex and retail sales data all due next week

• Overnight range 0.64075-59, support 0.6390 0.6355, resistance 0.6550
AUD Daily 200-DMA & DXY Daily

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

Synopsis:

CIBC expects USD/CAD to remain contained within the 1.3750–1.40 range for the rest of 2025, despite recent downside pressure driven by strong Canadian inflation data and broader USD selling.

Key Points:

• Canadian CPI Surprise: April’s trim and median CPI prints (3.1%/3.2%) beat expectations, adding short-term momentum to CAD strength.

• USD Selling Overdone: A surge in USD selling has accelerated USD/CAD’s drop faster than anticipated, with spot at 1.3872.

• Volatility Back to Normal: The single-day options implied range (±0.2%) has returned to pre-tariff-volatility levels, indicating a reversion to calmer FX conditions.

• Technical Anchoring: CIBC expects the 1.3750–1.40 zone to act as strong technical bounds, with little fundamental justification to push outside that range near-term.

Conclusion:

While recent data-driven CAD strength is notable, CIBC believes current momentum is unsustainable, and USD/CAD is likely to remain range-bound through year-end.