Sterling appears likely to continue its upward trajectory after hitting a fresh six-month high of 1.3675 on Friday, and while recent attempts to push higher in the mid-1.36s have faced resistance, robust support near 1.3620 over the past few sessions suggests a building bullish sentiment. Markets largely brushed off Monday's announcement of more stringent U.S. sanctions on Iran, with only a minor reaction in currency markets, though oil prices dipped, indicating a favorable market reception to the news. Attention now turns to the upcoming Kansas City Fed Jackson Hole Economic Symposium, August 27-29, where Fed Chair Kevin Warsh is set to deliver the keynote address. Market participants will be keen to decipher any insights Warsh might provide regarding Fed policy this year. Futures markets indicate a more than 60% chance of a 25bp hike at the October FOMC meeting, with expectations fully priced in for December.

Traders will be eager for any hints on U.S. inflation and growth, which could influence policy. Warsh faces a delicate balance, given that his previous commitment to let the data speak disappointed markets after the last Fed rate hold. Warsh is not alone in focus. Treasury Secretary Scott Bessent has sought to guide long-term yields lower via expanded long-end U.S. Treasuries buybacks to ease fiscal fears. Should Warsh disappoint bond vigilantes—appearing too dovish against above-target inflation—the recent yield dip risks unraveling, dragging the dollar lower.

Technically, sterling finds support around 1.3620, the Friday-Tuesday low area, followed by the rising 10-DMA at 1.3575, which has provided support since early August. On the upside, initial resistance lies at Friday's six-month high of 1.3675, with further resistance at 1.3712, the February 11 daily high.
Sterling Chart:


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

Bank of America Global Research summarizes the latest G10 FX flows heading into this week's Fed Warsh speech at Jackson Hole on Friday.

"The partial unwinding of USD longs, esp. vs GBP and CHF, has been the main G10 FX flows theme post-July FOMC  Still, the USD longs added after the June FOMC have not been fully unwound on some metrics, so the USD sell-off could extend if Chair Warsh disappoints markets. Last week's vol action was telling in that regard. USD aside, the lack of meaningful JPY demand has been another highlight from our flows signals - we remain bullish on JPY," BofA notes.

"Equity flows have failed to cushion the recent USD sell-off: Relative equity inflows have not offset the recent USD sell-off. Within G4 FX, relative equity flows this year have favoured GBP, JPY and USD over EUR, while fixed income flows have favoured EUR and GBP over USD," BofA adds.

• Cable has traded a 26.5 pip range since the London open; 1.36225-1.3649

• Those parameters are within Monday's range, which was itself within Friday's range

• 1.36555 was Monday high, in Asia (1.3648 was Ldn/NY session high Monday)

• Monday low was 1.3621. Friday range was 1.3619-1.36745 (six-month high before low)

• GBP/EUR continues to respect 1.17 resistance level

• Why the bond market may be resetting expectations about the United States

GBPUSD


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

• AUD opens near flat to kick off NY session. Ranges narrow but trend higher is intact

• RBA minutes - board discussed Aug rate hike, reiterated readiness to act if necessary

• AU CPI due Wed, little priced in AU rates, suggests limited room for a dovish repricing

• Initial support at the 200-hour MAs (0.7113-20), which has guided the trend higher since July

• Topside objectives remain unchanged at 0.7200 and the year-to-date high at 0.7277

• Related comment:
AUDUSD hourly chart


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

• USD/JPY risen from 159.06 to 159.48, on Tuesday, according to EBS data

• Spot's recovery persists after finding support at the key 158.03 Fibo

• The 158.03 Fibo is a 38.2% retrace of the 155.20-159.78 rise

• Likely solid resistance near last week's 159.78 peak

• Note both the USD/JPY and EUR/JPY usually struggle in August

Daily Chart


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

• AUD/USD has traded a 16.5 pip range thus far Tuesday; 0.71425-0.7159

• The base of that range is two pips above Monday low

• 0.7180 was Friday's 11-week peak. It is also a 76.4% Fibo resistance level

• Australian July inflation data is due at 0130 GMT: CPI forecast at 3.3% YY

• Trimmed mean forecast at 3.5%. AUD might strengthen on hotter prints

• Minutes show RBA debated rate hike before unanimous hold on August 11

AUDUSD


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

• On Aug 18 traders were short euros equivalent $8.5 billion

• EUR/USD rose from 1.1353 on Jul 28 to 1.1614 Aug 17

• Pair extended its rise to 1.1711 on Aug 21

• 21-DMA at 1.1562 set to cross above 100-DMA at 1.1575

• If confirmed buy signal may trigger short-covering

• Dollar's big long bet persists, raising risk of deeper decline

•
EURUSD


(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• Cable has traded a meagre 16.5 pip range thus far Tuesday; 1.36225-1.3639

• The base of that range is 1.5 pips above Monday low (1.3619 was Friday low)

• U.S. Treasury buybacks a "mistake" costing credibility, says Druckenmiller

• Dollar fell on last week's buyback news, with GBP/USD vaulting 1.3600

• 1.36745 was six-month high for cable on Friday (before retreat to 1.3619)

• Bond market anxiety raises stakes for Warsh's debut Jackson Hole speech

GBPUSD


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

• Shares of Australia's Aureka rise as much as 19.1% to A$0.125, marking their biggest intraday pct gain since February 25

• Shares hit their highest level since April 13

• Mineral explorer reports high-grade gold and silver findings in two separate zones at its Comstock gold project in Australia

• Says lack of significant sulphides suggests gold can be recovered relatively easily, which will be confirmed with a metallurgical testing programme

• YTD, stock down 20.7%, including session's moves

(Reporting by Subhalakshmi Dey in Bengaluru)

• AUD/USD -0.2% wtd but remains 3.4% higher since beginning of Jul

• Pair targets break above 0.7200, may spur move toward 0.72825 Jun 2022 high

• RBA Head of Domestic Markets David Jacobs speaking in Sydney 0400 GMT Tue

• AU Jul CPI due Wed, Reuters poll consensus +0.8% m/m, +3.3% y/y (headline)

• U.S. Jul PCE price index Wed, Reuters poll consensus +0.1% m/m, +3.6% y/y

• Fed Chair Warsh speech at Jackson Hole Fri potential highlight of the week

• Harsher Iran sanctions and U.S.-CA trade trouble gives USD support

• Range Asia 0.7149-59 support 0.6920 0.6866, resistance 0.7190-00 0.7277-82
AUD Weekly 52-WMA

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

• XAU/USD up 0.4% in Asia, pares gains after rallying 1% on Tuesday

• Eases on profit-taking after nearing psychological $ 4700

• Asia range 4649.82-4696.18; downside limited on dollar-debasement fears

• U.S. measures aimed at capping long-dated yields sparks rush to safe havens

• Receding Fed rate expectations, global growth concerns will underpin gold

• Technical picture positive after daily close above 200-day MA at $4515

• Next objective is the 50% retracement of Jan-July decline at 4769

• Support 4650, 4625, 4590-4600; Monday range 4594.13-4680.70
XAU:

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

• AUD/USD +0.1% Tue, RBA meeting minutes confirm willingness to hike if needed

• RBA Head of Domestic Markets David Jacobs speaking in Sydney 0400 GMT Tue

• AU Jul CPI due Wed, Reuters poll consensus +0.8% m/m, +3.3% y/y (headline)

• U.S. Jul PCE price index Wed, Reuters poll consensus +0.1% m/m, +3.6% y/y

• Fed Chair Warsh speech at Jackson Hole Fri potential highlight of the week

• Expanding Iran sanctions and U.S.-CA trade tensions lending USD support

• AUD break of 0.7200 resistance would open door to 0.72825 high from Jun 2022

• Range Asia 0.7149-59 support 0.6920 0.6866, resistance 0.7200 0.7277-82
AUD Daily 21/55/100-DMA

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

• USD/JPY went nowhere yesterday, on hold around 159.00, Asia 159.06-15

• Could be inside day after 158.68-159.28 range yesterday

• End-summer to keep action light, market thin, pre-Jackson Hole too

• USD tad better bid elsewhere and seen USD/JPY supportive

• Ascending daily Ichi cloud 159.86-161.95 above, 200/100-DMAs 158.37/159.98

• Most action to continue between these two moving averages?

• 159.13 200-HMA at to work as pivot as was case yesterday? 100-HMA 158.90

• Again, few significant nearby option expiries today, only 159.00-05 $613 mln

• JGB-US Treasury rate differentials tad wider, in 2s to 255, 10s @182 bps

• Tokyo fix to seen usual Japanese importer Gotobi demand, exporter offers too

• Related comments , , ,

• Also , on Bessent plans , ,

• US markets , , ,

• On Middle East , ,
USD/JPY daily:


USD/JPY hourly:

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

• NZD/USD -0.35% from Mon 0.5982 as USD index recovers 0.2% Mon

• Expanding Iran sanctions and U.S.-CA trade tensions provide USD uplift

• NZD targeting break above 0.5990-95, expect stop-loss scramble above

• U.S. Jul PCE price index Wed, Reuters poll consensus +0.1% m/m, +3.6% y/y

• Fed Chair Warsh speech at Jackson Hole Fri will be closely scrutinized

• Range NZ 0.5955-61, support 0.5831 0.5762, resistance 0.5995 0.6090-95
NZD Daily 21/100/200-DMA


DXY Daily 55-DMA

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

• AUD/USD -0.4% from Mon 0.71762 high; expansion of Iran sanctions lifts DXY

• RBA Aug monetary policy meeting minutes due for release 0130 GMT

• Traders sensitive to any signs of ongoing RBA bias towards higher OCR

• AUD targets 0.7200 resistance, break would open topside towards 0.7282

• RBA Head of Domestic Markets David Jacobs speaking in Sydney Tue

• AU Jul CPI due Wed, Reuters poll consensus +0.8% m/m, +3.2% y/y (headline)

• Overnight range 0.71405-71 support 0.6920, resistance 0.7200 0.7277-82
AUD Daily 21/100/200-DMA


DXY Daily 55-DMA

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

Morgan Stanley Research sees a scope for USD downside in the near-term especially vs CHF.

"We expect renewed focus on US currency policy to weigh on the USD in the near term, particularly versus  CHF,"MS notes.

"The USD traded at a ~3% discount to yield differentials in January 2026 as investors discussed various policy levers the administration might choose to weaken the USD.

Discussion at the time centered on a range of potential policy channels, including intervention, Fed leadership, Greenland-related developments and a proposed sovereign wealth fund. FX US. This discount compressed after Mr. Warsh's Fed nomination. 

The USD then traded at a ~3% premium to yield differentials in March following geopolitical developments in the Middle East, before converging back to roughly yield-implied levels in May and June," MS adds.

• Bessent announces expansion of Iran sanctions

• Trade tensions weigh on Canadian dollar

• Trump says 50% tariffs on vehicles, parts and steel start January 1, 2027

(Updates to afternoon trading)

By Chuck Mikolajczak

NEW YORK, Aug 24 (Reuters) - The U.S. dollar advanced on Monday, coming off its third weekly decline in four that sent the greenback to three-month lows after President Donald Trump's administration announced an expansion of sanctions on Iran and separate tariffs on goods from Canada. The greenback extended gains after U.S. Treasury Secretary Scott Bessent announced the expansion of secondary sanctions in hopes they will "sever every economic lifeline" that sustains Iran in the latest effort to pressure Tehran into ending its attacks on ships in the Gulf.

After last week's announcement by the Treasury Department that it would double the size of liquidity support buyback operations for longer-dated notes and bonds, CNBC reported earlier on Monday, citing two senior Treasury officials, that Bessent could tap the department's near $1 trillion General Account to help fund bond buybacks, instead of issuing short-term bills.

The dollar briefly pared some gains after the report, along with longer-dated Treasury yields.

"If the reporting is true that the Treasury is going to announce using a slug of its Treasury General Account at the Fed to buy longer-term bonds, it could be an interesting experiment. Does firing a bazooka at a hurricane work?" said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin.

"Lower bond yields at the long end won’t fix the debt problem. Longer term, it could make it worse. The government’s debt burden would become even more sensitive to changes in the Fed’s policy rate."

The dollar index , which measures the greenback against a basket of currencies, rose 0.17% to 98.99, with the euro down 0.14% at $1.1663. Long-end yields have been climbing around the globe due to a combination of a solid economic growth outlook, expectations for rising inflation and concern about swelling sovereign debts, while the Treasury buyback expansion to relieve upward pressure on yields has fueled concerns the dollar will weaken as a result.

CANADIAN DOLLAR WEAKENS ON TARIFFS Trade tensions weighed on the Canadian dollar , which weakened 0.61%, its biggest drop since June 17, versus the greenback to C$1.385 per dollar and was on track to snap a three-day streak of gains, after Washington imposed 50% tariffs on Canadian goods, with Canada promising to retaliate "dollar for dollar" on the new levies.

Trump said in a social media post on Monday that the U.S. will increase tariffs to 50% on all cars, trucks, automotive parts and steel from Canada starting January 1, 2027.

Canadian Prime Minister Mark Carney said a "mutually beneficial deal" with the U.S. was possible, but only if Americans respect Canada's sovereignty. Sterling dipped 0.06% to $1.3632, holding near its six-month high of $1.3675 hit on Friday. The Japanese yen softened 0.13% against the greenback to 159.13 per dollar.

In cryptocurrencies, bitcoin gained 2.05% to $78,993.42 after registering its largest weekly gain in nearly 3-1/2 years last week.

KEY DATA RELEASES, WARSH REMARKS EYED

U.S. economic data this week includes the personal consumption expenditures price index, personal income and spending, consumer confidence and the second estimate of second-quarter economic growth. Market participants will also be hoping for some guidance on the outlook for U.S. interest rates when Federal Reserve Chairman Kevin Warsh speaks in Jackson Hole, Wyoming, on Friday.

However, UBS economists said in a note that Warsh's "quest to end any and all forms of forward guidance suggests we probably won't hear where the funds rate is headed," while Morgan Stanley's chief U.S. economist Michael Gapen said, "We expect silence on the near-term outlook for monetary policy, including the expansion of the Treasury buyback program."

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(Reporting by Chuck Mikolajczak; additional reporting by Tom Westbrook in Singapore and Johann M Cherian in Bengaluru; Editing by Chizu Nomiyama and Lisa Shumaker)

((; @chuckmik.bsky.social))

(Adds chart)

• AUD marginally softer, tracking the broader risk-off tone, with the SPX down around 0.3%

• Spot has stalled ahead of 0.7200, but the broader technical setup remains constructive

• Firm gold prices should provide an element of underlying support, although gold has eased from the highs

• Initial support is seen at 0.7100-10, coinciding with the 200-hour moving averages

• The 200-hour MAs have guided the uptrend since August, making a hold here important for bulls

• A sustained break below 0.7100 would weaken the setup and point to a more neutral near-term tone

• On the topside, 0.7200 remains the key resistance and bullish trigger
AUDUSD


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

MUFG Research previews the 2026 Jackson Hole Economic Policy Symposium which will take place from August 27–29.

"We expect attention will turn to the annual Jackson Hole symposium in the latter half of this week. Minutes of the July FOMC meeting released on 19 August showed that many participants believed a rate hike would be necessary if inflation failed to slow. However, expectations of a September rate hike have declined after a run of softer US data this month, including the employment report, CPI, and retail sales," MUFG notes.

"The focus will therefore be on what Fed Chair Kevin Warsh chooses to say when he speaks on 28 August. The Treasury's recent moves in the bond market have added another complication. Given Warsh's approach to communication so far, he may provide even fewer clues on near-term monetary policy than markets currently expect. It would also be unwise to assume that Treasury Secretary Bessent, who coordinated with the Japanese government on FX intervention, is acting independently of Warsh. Depending on Warsh's message, and how markets interpret it, his speech could once again heighten tensions in bond and FX markets," MUFG adds.

• Shares of Michael Saylor-led Strategy advancing 5.1% to $125.38 on Mon after co set aside about $1.6 bln in cash to fund future treasury operations, including potential bitcoin purchases

• MSTR rising for 4th straight session, racking up ~35% gain along the way

• The new cash pool, dubbed "USD Cash", can be used for bitcoin buys, share repurchases and other corporate events, giving co more flexibility to navigate market downturns

• MSTR move comes as bitcoin , a key asset for the world's largest corporate buyer of the crypto, approached the $80,000 mark last week for the first time since mid-May

• Despite the rally, MSTR off ~18% YTD and 65% over the past year

• 18 of 20 analysts rate the stock "strong buy" or "buy", 2 "hold"; median PT $206.67, per LSEG data

• BTC currently up 2.4% to $79,222.92 on Mon. It surged about 23% last week after U.S. President Donald Trump urged Congress to pass a crypto bill, as well as a boost to risk assets following Treasury Department's surprise announcement to support ​long-term bonds
(Lance Tupper is a Reuters market analyst. The views expressed are his own)

Danske Research discusses USD/JPY outlook.

"While the joint US-Japan intervention, where the US sold EUR to buy the JPY, supporting the JPY and putting downward pressure on USD/JPY, was remarkable in its size and coordination, it generated limited follow-through beyond the initial move, reinforcing that sustained JPY strength is unlikely without a meaningful repricing lower in US yields. History shows that intervention alone rarely changes the underlying trend. Unless supported by weaker US data, lower US yields, a more hawkish BoJ, lower oil prices or meaningful Japanese asset repatriation, investors are likely to fade JPY strength," Danske notes.

"Accordingly, while we remain structurally bearish on USD/JPY over the medium term, we see scope for tactical upside over the next 1-3M, supported by resilient US data, a relatively hawkish Fed and oil prices that are likely to remain elevated," Danske adds.

Sterling is showing resilience, currently trading near 6-1/2-month highs, even with a strong U.S. dollar stemming from new sanctions on Iran.

After climbing to 1.3675 on Friday, the pound's ascent paused on Monday. This breather comes amid ongoing geopolitical tensions, typical light summer liquidity conditions, and traders adjusting positions ahead of the Fed's Jackson Hole Symposium.

Despite a 3% rise in GBP/USD since late July, spurred by a less hawkish stance from the Federal Reserve, speculative short positions on sterling haven't significantly reduced. This suggests there's still potential for further gains if more of these short positions are closed out. Should Chair Kevin Warsh fail to clearly convey the Fed's commitment to proactively managing inflation at Jackson Hole, the pound could continue its rally. Bulls might aim for the February 11 high of 1.3712, with a longer-term target at the January 27, 2026, high of 1.3867.

With Fed and BoE policy expectations moving in tandem in 2026, extended sterling strength is likely to follow the recent two-steps-forward, one-step-back path as entrenched GBP shorts lighten. However, slightly more hawkish BoE expectations relative to the Fed in 2027 should continue to support GBP/USD, though considerable headline risk remains around the fluid Middle East outlook and UK and U.S. fiscal concerns.

Technically, initial resistance for GBP/USD is found at 1.3675, the Friday high, and 1.3712, the February 11 daily high. Support can be found near 1.3620, the Friday and Monday low area, followed by the rising 10-day moving average at 1.3562.
GBP Chart:


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

Bank of America Global Research discusses Gold outlook.

'Our model confirms that current investor buying is more consistent with a price closer to US$4,000/oz than US$5,000/oz, which is associated with investment demand growth of 21% YoY. Hence, investor purchases must accelerate for gold to push towards US$5,000/oz. Central bank purchases already provide a supportive backdrop, rising to 51t in June, well above the 12‑month average of 27t. However, a sustained move higher in gold would also require a recovery in ETF inflows," BofA notes.

"Gold tends to benefit when policy signals become harder to interpret. The upcoming US PCE report on 26th August, the 27th-29th August Jackson Hole gathering and the 16th September FOMC meeting are the next key events. A dovish tilt would be bullish for gold," BofA adds.