Goldman Sachs Research constructed a series of FX factors (Carry, Equity Risk, National Debt, NIIP, Energy and Metals Commodities, and Mean Reversion) by applying time-varying weights to 26 currencies, including the US Dollar.

"We show that this is the case for a Carry/Risk-Off blend during periods of moderate equity drawdowns, and for a Carry/NIIP blend to benefit from capital retrenchment in periods of correlation breakdowns in US assets," GS notes.

"We also find that blending Carry with Mean Reversion can help to improve total vol-adjusted returns," GS adds.

• AUD/USD +0.8% from Wed 0.7067 low after UST yields sank on bond buyback news

• U.S. Treasury to double size of long-date buybacks to increase liquidity

• AU Jul employment data 0130 GMT, poll consensus +15k jobs, 4.4% unemployment

• AUD near upper hourly Bollinger band, upswing may stall ahead jobs data

• Strait of Hormuz uncertainty persists with no signs of peace progress

• Gold +4.3% while Brent crude remains elevated at $91.57 a barrel

• RBA Aug monetary policy meeting minutes to be released Tue

• Overnight range 0.7069-0.7129 support 0.6920, resistance 0.7130 0.7200
AUD Hourly Bollinger Study & DXY daily 55-DMA

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

• NY opened near 0.7075 after 0.7067 traded overnight, rally took hold early

• US Treasury announcement sent yields , down & rallied risk assets

• Gold, silver, copper & equities put in solid gains & USD/CNH fell to 6.7279

• AUD/USD spiked up and pierced the 61.8% Fib of 0.7277-0.6867, traded 0.7129

• USD & yields firmed in NY's afternoon, AUD/USD neared 0.7115 into the Fed minutes

• AUD/USD rallied slightly after the Fed minutes, traded up +0.45% late in the day

• Techs lean bullish; RSIs are rising, ongoing consolidation, hold above 10-DMA are bullish
audusd


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

• NY opened near 1.1605 after 1.1570 traded overnight, rally extended early NY

• USD, US yields fell sharply after US Treasury liquidity support news

• EUR/USD spiked upward as risk-on sentiment dominated early trading

• Gold, silver, stock rallied sharply while USD/CNH fell below 6.7280

• EUR/USD rallied above the 200-DMA, hit a 2-1/2-month high of 1.1677

• USD & yields firmed in NY's afternoon, EUR/USD neared 1.1660 into the Fed minutes

• The USD softened a bit after the Fed minutes, EUR/USD neared 1.1670, was up +0.79% late

• Techs lean bullish; RSIs indicate bull momentum, pair above 200-DMA & June monthly high
eurusd


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

Morgan Stanley Research summarizes its tactical views on AUD and NZD.

"AUD View: Bullish | Skew: Bullish We stay bullish AUD after Governor Bullock's hawkish tone in August. Carry is high, implied vol unusually low and risk appetite firm, so we look for 0.75 in the coming quarters.," MS notes.

"NZD View: Neutral | Skew: Neutral We see AUD/NZD holding near 1.20. Inflation expectations have cooled, and with unemployment rising and a September hike fully priced, we think risks skew lower into card spending," MS adds.

• Ether traded range bound since July 15, today that range broke

• US dollar, yields fell on US Treasury liquidity support news

• Riskier assets rallied sharply; gold, silver, Bitcoin, stocks rallied & USD/CNH fell

• Ether rallied above the 50% Fib of 2464.54-1506.93, July & June monthly highs

• A 3-month high of 2098.10 traded, Ether traded up +7.8% into Europe's close

• The rally helped bullish technical signals emerge for Ether

• 200-DMA broke & consolidation of drop from April high resolved with a rally

• Rising daily, monthly RSIs reinforce bull signs as they indicate upward momentum

• Psychological 2100.00 level & 2135.00-2155.00 zone are immediate impediments for bulls
eth


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

Credit Agricole CIB Research on BoJ rates outlook.

Even if the BoJ raises rates, the yield curve would flatten, but long-term yields will not decline unless the economy deteriorates significantly. If the BoJ hikes in September and October, real GDP growth in 2027 would likely slow further to around +0.5%, in line with potential growth, from +0.8% in 2026. A slowdown in growth would put downward pressure on the yen," CACIB notes.

"It should not be forgotten that even as the BoJ has continued its overeager rate hikes, yen depreciation and rising long-term rates have persisted," CACIB adds.

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

• Spot gold up 2.8% at $4,457.12 per ounce, as the U.S. dollar weakened and global bond yields eased from multi-decade highs

• Top miners Barrick Mining and Newmont up 5.7% and 7.5%, respectively

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

rise 6.3%, Harmony Gold jump 7.5% and AngloGold Ashanti gain 6.5%

• Canadian miners Kinross Gold up 6.2% and Agnico Eagle Mines rises 5.8%

(Reporting by Pranav Mathur in Bengaluru)

Goldman Sachs likes buying AUD/USD on dips in the near-term.

"In the context of fiscal concerns, AUD and NOK should find support, but there's a pivot point were this feeds through to lower equities and traditional risk-off," GS notes.

"Alphabet issuance (5.5bn of AUD denominated bonds today) will perhaps prove a slight drag on AUDUSD as some proceeds are converted back into we have seen these patterns before on hyperscaler issuance, and it presents a buying opportunity - between 0.7070 and 0.7040 short term," GS adds.

Bank of America Global Research previews today's FOMC minutes from the July meeting.

"The July FOMC minutes will be stale because the soft July jobs and inflation data since the Fed meeting have considerably reduced market pricing of hikes.

Still, we will be looking to get a sense of how many FOMC participants (besides the three dissenters) wanted a hike or would at least have been willing to go along with one," BofA notes.

"We're also curious about the committee's thresholds for a September move, though we wouldn't expect anything too specific on this front," BofA adds.

• Cable has traded a 40.5 pip range thus far Wednesday; 1.3525-1.35655

• The peak of that range is 5.5 pips shy of Monday's three-month high

• Minutes from July's Fed meeting will be published at 1800 GMT

• Eighty of 104 economists polled by Reuters expect Fed holds through year-end

• UK CPI rose to 2.9% in July, as expected, from 2.6% in June

• Pound can bank on another 6-3 rate hold vote in September

GBPUSD


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

• USD/JPY option gamma bid up and topside strike demand increased as spot tested 160.00 barriers/triggers Monday

• Subsequent spot setback toward 159.00 drained any excitement and volatility measures are back under pressure

• 1-week daily realised volatility has collapsed to 1.32 - the lowest in G10 FX to evidence the recent lack of spot activity

• With minimal daily FX movement, there's no fuel left to keep short-dated implied volatility elevated

• 1-month implied vol back around 7.0 after its late July intervention led spike from 4-year lows at 6.0 to 10.0

• 1-month daily realised vol still includes the intervention spot drop, but will revert lower when it rolls out the equation

• Related comment - Why FX options continue to snooze
1-week and 1-month expiry USD/JPY FXO implied volatility


Implied vs realised vol


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

• USD/JPY has pulled away from the closely-watched 160 level

• Spot has dropped from 159.64 to 159.06, on Wednesday, on the EBS data

• USD/JPY upside has recently been limited by Japanese exporter sales

• A break and daily close below the cloud base, that is currently at 158.92, would be bearish

• USD/JPY and EUR/JPY usually struggles in August

• Investors set sights on Swiss franc for popular carry trades after yen intervention

Daily Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own)

• AUD/USD falls to 0.7067 as Asian stock losses weigh on risk-sensitive AUD

• Kospi down 5.8%, Nikkei down 3.16%; steepest drops for three weeks

• 0.7067 is the lowest level this week (0.7129 was Monday's 10-week high)

• Minutes from July's Fed meeting will be published at 1800 GMT

• RBA's Hauser warns of higher rates if inflation risks crystallise

• Australian July jobs data due at 0130 GMT; employment forecast up 15k

AUDUSD


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

• Cable hugs 1.3550 option expiry after UK July CPI matches 2.9% forecast

• Match underpins expectation for another BoE interest rate hold in September

• Nearly 90% of economists polled by Reuters expect further BoE holds in Q4

• 1.3571 was three-month high for GBP/USD Monday; 1.35195 = subsequent low

• Minutes from July's Fed meeting will be published at 1800 GMT

• UK PM Burnham says Healey to outline economic strategy in September speech

GBPUSD


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

• Most recent uptrend in EUR/CHF from 0.9178 on July 2 running out of steam?

• Cross in stasis of sort after peaking out at 0.9409 on Friday

• EUR/CHF still relatively bid, but carry demand looks to be flagging

• On heavy side in Asia today, off modestly from 0.9405 to 0.9396

• Heaviness above 0.9400 likely to remain barring fresh carry flows

• Some player still hold out for more upside but questionable

• Granted, more upside not ruled out but trade may have already peaked

• Key will be whether EUR/CHF can break below its 0.9388-89 hourly Ichi cloud

• Cloud looks to continue to ascend alongside 100-HMA currently at 0.9388

• Breaks below bearish and project test towards ascending 200-HMA at 0.9368
EUR/CHF hourly:

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

• USD/JPY has fallen into its 159.17-41 hourly Ichimoku cloud

• Move down modest at most however, not necessarily start of trend

• That said, USD/JPY upside recently more limited on Japanese exporter sales

• These sales seen likely to continue in Japan's FY half end in September

• Sales beyond too as exporters move to realize FY budget assumptions?

• Key support below cloud at 159.23 ascending 200-HMA

• Daily Ichimoku cloud base too at 158.92 and 200-DMA at 158.29

• $1 bln in option expiries today between 159.00-25 also seen supportive

• Related comments , , also
USD/JPY hourly:

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

• AUD/USD improves slightly on hawkish RBA dialogue, but remains -0.15% Wed

• RBA Deputy Governor Hauser says upside inflation risks may trigger OCR hike

• Markets unconvinced RBA will be able to hike as economic headwinds build

• Strait of Hormuz access remains restricted despite Trump claiming otherwise

• Oil supply concerns continue to re-escalate, Brent crude +0.7% to $91.67

• AU Jul jobs update Thur, Reuters poll consensus +15k jobs, 4.4% unemployment

• Range Asia 0.7069-885 support 0.6920 0.6866 0.6834, resistance 0.7130 0.7200
AUD Daily 55-DMA

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

• USD/CAD -0.1% in Asia after Trump pauses tariffs against Canada for 3 days

• Says Canada and U.S. have a deal subject to finalisation of documents

• CAD likely to test 1.3845 Mon high which was its highest in more than 2 mths

• Higher oil prices, waning Sep Fed rate hike expectations underpin CAD

• Break extends to 1.3815-20, followed by 1.3770, the May 29 low

• Resistance 1.3905-10,1.3955-60; Tue range 1.3862-1.3910, Asia 1.3872-1.3907
CAD:

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

• AUD/USD -0.2% Wed as oil supply concerns continue to re-escalate

• AU Q2 wage price index +0.8% q/q, +3.2% y/y (poll +0.8%, +3.2% respectively)

• RBA Deputy Governor Andrew Hauser fireside chat in Brisbane later Wed

• Strait of Hormuz access still restricted despite Trump's antithetical claims

• AUD in mean-reversion mode, slide toward 0.7034 21-DMA increasingly likely

• AU Jul jobs update Thur, Reuters poll consensus +15k jobs, 4.4% unemployment

• Range Asia 0.7069-885 support 0.6920 0.6866 0.6834, resistance 0.7130 0.7200
AUD Daily 21/100/200-DMA

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

• USD remained better bid yesterday, USD/JPY held on 159 despite greater sales

• USD/JPY to 159.78 high yesterday, Asia so far today 159.49-64 EBS

• Daily Ichimoku kijun at 159.59 pierced but spot still in area

• 100-DMA 160.01 above, still technical resistance, Ichi cloud 158.92-161.38

• Japanese exporters no doubt looking to sell ahead of 160.00

• Highest budget assumptions for 160 this fiscal year, must sell there/above

• Many large companies already have sales 160+, OK for FY first half Sept-end

• Threat of Japan FX intervention back above 160 cannot be ignored either

• With a BOJ hike eyed in September, maybe again in December, upside limited?

• JGB-US Treasury rate differentials may have based for now but still heavy

• In 2s differential to @246 bps Monday, yesterday @250 bps, 10s @179 bps

• Tech support from 100-HMA at 159.37, hourly Ichimoku cloud 159.10-33 below

• Option expiries today also likely supportive, $1 bln between 159.00-25

• Related comments , , ,

• And , , also

• US markets , , ,

• On US data/economy , , US-Iran
USD/JPY daily:


USD/JPY hourly:


JGB-US Treasury 2-year interest rate differential:

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

• NZD/USD -0.6% from Tue 0.59075 high as buyers take a step back

• Pair in mean-reversion mode, drift toward 0.5854 21-DMA looks likely

• NZ Q2 PPI: inputs +2.9% q/q, outputs +1.6% q/q (prior +1.4% & +0.8%)

• Strait of Hormuz shipping remains restricted despite contrary U.S. claims

• Brent crude +2.8% wtd as supply concerns re-escalate, last $91.02 a barrel

• U.S. 30-year yields trade to high near 5.32% Tue, highest level since 2007

• NZ Jul balance of trade update, and Aug S&P manufacturing PMI due Fri

• Range NZ 0.5871-746, support 0.5831 0.5762, resistance 0.5925-30 0.5995
NZD Daily 21/100/200-DMA

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

• AUD/USD -0.5% from Tue 0.71195 high as non-energy commodities trade softer

• AUD pushing lower hourly Bollinger band, downwards momentum likely to slow

• RBA Deputy Governor Andrew Hauser fireside chat in Brisbane Wed

• U.S. 30-year yields traded 5.32% earlier Tue, highest level since 2007

• Strait of Hormuz shipping remains heavily constrained despite U.S. claims

• AU Q2 wage price index due Wed, Reuters poll consensus +0.8% q/q, +3.2% y/y

• AU Jul jobs update Thur, Reuters poll consensus +15k jobs, 4.4% unemployment

• Overnight range 0.70826-0.71195 support 0.6920, resistance 0.7130 0.7200
AUD Daily 55-DMA


AUD Hourly Bollinger Study

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

Danske Research discuss the drivers and implications of the recent sharp decline in US labour force participation rate.

"The decline cannot be explained by any single driver alone, but we evaluate three possible explanations that could be in play simultaneously, 1) decline in net immigration, 2) loss of entry-level job opportunities and 3) early retirements. A sudden loss of labour supply that goes beyond the expected extent of the immigration slowdown is both a downside risk to real growth and an upside risk to inflation," Danske notes.

"We think the Fed will remain on hold in its upcoming September meeting, but eventually hike rates in December and March," Danske adds.