EUR/USD rose above 1.1420 in the American session on Monday as investors digested mixed Eurozone sentiment figures and looked ahead to key German data. The latest Eurozone releases showed Business Climate in June at -0.38, weaker than the previous revised -0.27 reading.
USD/CAD trades around 1.4210 on Monday at the time of writing, as investors remain on the sidelines ahead of a series of key US labor market releases, culminating with Thursday's June Nonfarm Payrolls (NFP) report.
The Pound Sterling (GBP) advances 0.40% on Monday after Andy Burnham, who is expected to become the new UK Prime Minister, commented that he will adhere to fiscal rules set by Chancellor Rachel Reeves at a speech in which he laid the path for the economy.
HSBC argues that the Pound is more exposed to downside risks following Prime Minister Starmer’s resignation and the ensuing UK leadership contest.
OCBC’s Sim Moh Siong and Christopher Wong expect Asian FX to start the week on a softer footing as AI-led equity losses and renewed US–Iran tensions keep the Dollar bid.
AUD/USD trades near the 0.6880 level on Monday, down from Friday's close as traders await fresh catalysts from Australia and China.
Scotiabank strategists Shaun Osborne and Eric Theoret note EUR/USD is holding within a short-term channel as markets await comments from ECB President Lagarde at the Sintra symposium, which historically has had limited impact on near-term price action.
Silver (XAG/USD) is down 2.37% on Monday, trading around $57.75 at the time of writing, as investors reassess the impact of geopolitical tensions in the Middle East on energy markets and the inflation outlook.
Commerzbank analysts Charlie Lay and Dr. Henry Hao highlight that China’s industrial profit growth slowed to 21.1% year-on-year in May, with weaker consumption and investment pointing to easing momentum.
BNY’s Geoff Yu notes that China has expanded its export control list to include more Japanese entities, raising supply chain risks for defense and rare earths, while Japanese commercial sales grew strongly in May.
Scotiabank strategists Shaun Osborne and Eric Theoret note the Canadian Dollar (CAD) has gained modest relief as front-end US/Canada spreads retreat about 10bps from last week’s peak, though rate differentials remain punitive.
Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The European Central Bank (ECB) Forum will, as it does every year, gather the crème de la crème of central banks.
Rabobank's Senior FX Strategist Jane Foley examines structural de-dollarisation themes alongside near-term Dollar dynamics. The de-dollarisation debate intensified after tariffs failed to trigger a traditional safe-haven bid for the Dollar and Treasuries in April 2025.
BNY’s Geoff Yu highlights a recurring post-Sintra pattern in the Euro, with hawkish ECB communication from Christine Lagarde typically driving EUR/USD gains from late June into early July before they fade.
Societe Generale’s Kenneth Broux highlights that USD/JPY has broken out of a brief consolidation and is now challenging its 2024 peak near 162.00. The bank notes strong May retail sales support expectations for further Bank of Japan tightening.
ING’s Global Head of Macro Carsten Brzeski warns that recurring European heatwaves are becoming a structural drag on Eurozone growth. He cites academic and ECB research showing measurable losses in output and higher food inflation linked to extreme temperatures.
Deutsche Bank Research notes that investors reduced expectations for further Fed rate hikes after softer US PCE inflation, pulling December hike pricing down and lowering 2-year and 10-year Treasury yields.
Rabobank's Senior FX Strategist Jane Foley discusses EUR/USD within a broader reassessment of Dollar drivers. Foley notes that even if the US Dollar (USD) is in long-term decline, cyclical forces can still support it.
The British Pound (GBP) outperforms its major currency peers, trading 0.25% higher to near 1.3230 against the US Dollar (USD) during the European trading session on Monday.
BNY’s Geoff Yu reports that the U.S. and Iran have agreed to halt mutual attacks and resume talks on the Strait of Hormuz, allowing shipping to move more freely. Markets reacted cautiously, with Brent, WTI and Omani crude prices higher as tensions eased.
Crude Oil prices are practically flat on Monday, with the price of the US benchmark West Texas Intermediate (WTI) barrel practically flat around the $70.00 level.
Guntermann at Commerzbank notes that while Oil prices near pre-war levels reduce tail risks for growth, inflation and rate volatility, Euro area inflation is not falling fast enough to dispel European Central Bank (ECB) hawkishness.
OCBC’s Sim Moh Siong and Christopher Wong highlight that a more hawkish Federal Reserve and flatter US yield curve have replaced high Oil prices as the main support for the Dollar.
United Kingdom (UK) Greater Manchester Mayor Andy Burnham has stated during the European trading session on Monday that his plans after getting the leadership position would be consistent with Labour’s 2024 manifesto.
Societe Generale strategists Michael Haigh and Jeremy Sellem examine World Gold Council (WGC) survey data and market flows to gauge central bank demand for Gold.
The Indian Rupee (INR) trades flat against the US Dollar (USD) after a long weekend on Monday.
ING strategist Frantisek Taborsky notes that a stronger Dollar and lower Oil have led markets to outprice most rate hikes in Poland and the Czech Republic, adding pressure on regional FX.
The Euro (EUR) ticks higher against the US Dollar (USD) on Monday but is struggling to confirm a move above 1.1400, with the 13-month low in the 1.1320 area still within relatively close reach.
United Overseas Bank’s (UOB) Quek Ser Leang reports EUR/USD briefly spiked to 1.1434 before retreating, leaving intraday momentum subdued and the pair expected to trade between 1.1360 and 1.1410.
Deutsche Bank Research points to a busy week for Japan, with strong May retail sales already released and industrial production data due.
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