The AUD/USD pair falls to near 0.7040 on Tuesday, as the Australian Dollar (AUD) failed to gain support from stronger-than-expected Chinese trade data released earlier in the Asian session.
EUR/USD trades on the front foot on Tuesday as tentative signs of de-escalation in the Middle East conflict weigh on safe-haven demand for the US Dollar (USD). Lower Oil prices are also supporting the Euro (EUR), given the Eurozone's heavy reliance on imported energy.
USD/CAD trades around 1.3950 on Tuesday at the time of writing after snapping a four-day winning streak.
UOB’s Enrico Tanuwidjaja and Vincentius Ming Shen note that Indonesia’s FX reserves fell further in May as Bank Indonesia (BI) stepped up interventions to support the Rupiah, which has weakened sharply year-to-date.
Scotiabank’s Analyst Team notes Sterling is a moderate outperformer versus core majors, supported by broader risk appetite rather than domestic data.
Gold (XAU/USD) trades under modest pressure on Tuesday as a hawkish Federal Reserve (Fed) outlook offsets support from a weaker US Dollar (USD), while uncertainty surrounding Middle East peace negotiations keeps traders cautious.
Rabobank describes Canada’s economy as fragile, with back-to-back quarterly contractions marking a technical recession and weak investment and trade dragging growth.
Brown Brothers Harriman’s (BBH) Elias Haddad reports that USD/CNH is falling toward support at its June multi-year low as broad Dollar weakness combines with China’s stronger-than-expected trade surplus, driven by AI-related exports and semiconductor imports.
Commerzbank’s Charlie Lay explains that Korean authorities announced new measures to support the Korean Won, including tighter oversight of offshore FX derivatives, scrutiny of suspected misconduct, and expanded FX hedging by the National Pension Service via USD forward selling.
The British Pound (GBP) strengthens against the Japanese Yen (JPY) on Tuesday as easing tensions in the Middle East support risk-sensitive assets, while the Japanese Yen comes under pressure after Reuters reported that the Bank of Japan (BoJ) is considering pausing its bond-tapering program.
Scotiabank’s Analyst Team describes USD/CAD as little changed near the top of its year-to-date range, with conditions favouring at least a minor Canadian Dollar rebound as risk sentiment improves.
National Bank Canada's (NBC) Stéfane Marion and Kyle Dahms observe that the Euro has softened alongside the broader USD rally, even as Eurozone inflation has reaccelerated and pushed the ECB toward a more hawkish stance.
Rabobank's Senior FX Strategist Jane Foley discusses how prospective Bank of Japan (BoJ) policy shifts on JGB purchases and rate hikes could influence the Japanese Yen (JPY).
Societe Generale notes China’s trade surplus widened to USD 105.4 billion in May, driven by a 19.4% year‑on‑year surge in exports led by AI‑related equipment.
Brown Brothers Harriman’s (BBH) Elias Haddad notes that USD/IDR retreated sharply after hitting a fresh record high, as Bank Indonesia delivered an unscheduled 25 bps hike to 5.50%, following a surprise 50 bps move in May.
Royal Bank of Canada (RBC) economist Claire Fan argues that recent contractions in Canadian GDP do not signal a recession, noting that the C.D. Howe Institute Business Cycle Council shares this view. She emphasizes that sharp swings in population growth distort traditional GDP readings.
BNP Paribas strategists argue that Europe is emerging as an alternative safe haven, with the Euro gaining ground as a global safe asset.
Private-sector hiring in the US has cooled in late May. The NER Pulse, the weekly companion to the ADP National Employment Report, shows that companies added an average of 29K jobs per week in the four weeks ending May 23.
Mexico reported that 12-month inflation rose by 3.94% in May, down from 4.45% previously and the 4.03% expected by market participants.
MUFG’s Lee Hardman notes that the US Dollar has stalled after the Dollar Index met resistance near 100.00 as Middle East tensions between Iran and Israel eased and Oil prices retreated toward USD90.
National Bank Canada's (NBC) Stéfane Marion and Kyle Dahms highlights that the Canadian Dollar (CAD) has been the weakest reserve currency recently, with USD/CAD back near 1.39. They link this to Canada’s deteriorating real growth, negative Canada–U.S. 2‑year spreads and falling Gold prices.
Gold (XAU/USD) trades flat on Tuesday, near two-and-a-half-month lows at $4,268, with upside attempts capped below $4,360 so far.
The US Dollar (USD) underperforms its major currency peers during the European trading session on Tuesday, as renewed hopes of a permanent peace deal between the United States (US) and Iran have diminished its safe-haven demand.
BNY’s Bob Savage reports that Bank of Japan (BoJ) officials are considering pausing further reductions in JGB purchases after March 2027, keeping buying near ¥2.1tn as the balance sheet shrinks via maturities. The June meeting is expected to deliver a rate hike to 1.0%.
The Australian Dollar (AUD) trades lower against its major currency peers during the European trading session on Tuesday. The Aussie Dollar is up 0.15% against the US Dollar (USD) as the market sentiment turns risk-on.
Brown Brothers Harriman’s (BBH) Elias Haddad observes that AUD/USD is consolidating around 0.7050, with yield spreads pointing to downside risks below 0.7000.
The Japanese Yen (JPY) continues to face strong headwinds, trading back above the critical 160.00 threshold against the US Dollar despite improving domestic fundamentals.
GBP/USD trades around 1.3390 on Tuesday at the time of writing, up 0.42% on the day, mainly benefiting from a weaker US Dollar (USD) following confirmation that direct attacks between Israel and Iran have ceased.
ING’s Frantisek Taborsky says Hungary’s May inflation at 1.8% year-on-year confirms an idiosyncratic disinflation story and makes a June NBH easing cycle “a done deal”, with an initial 25 bp cut to 6.00% and 75 bp total this year.
The Euro (EUR) trades lower against the British Pound (GBP) on Tuesday, with bears testing support at two-week lows in the area of 0.8630, and bearish momentum building up.
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