• AUD/USD +0.15% late Thur as commodities get slight short-term relief

• Strait of Hormuz evacuation paused after Iran fires on cargo ship

• Brent crude +1.7% post-attack as confidence in normalization effort wobbles

• U.S. PCE prices elevated, but largely in line with expectations, DXY -0.2%

• AUD drift toward 0.6834 support likely unless RBA dials up hawkish rhetoric

• RBA Governor Bullock participating in Swiss panel discussion late Sun

• RBA Assistant Governor Kent speaking in Sydney early Mon

• Overnight range 0.68871-0.6927, support 0.6834 0.6660, resistance 0.7089
US Inflation Gauges


AUD Daily 55-DMA

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

The dollar index eased from overbought levels as in-line U.S. data, quarter-end flows, and weakness in tech stocks weighed on Treasury yields. U.S. PCE inflation rose at a 4.1% annualized pace in May, its fastest in three years but broadly in line with expectations. Jobless claims held steady while price hikes from Apple and Microsoft added to inflation concerns. Chicago Fed President Austan Goolsbee said inflation is moving the wrong way, though the latest PCE report wasn’t entirely negative, with inflation clearly the main concern in the Fed’s mandate. Oil rose after a cargo vessel was hit by an unknown projectile near Oman, raising concerns over the pace of Middle East supply normalization. IMF said energy and commodity prices have fallen since the U.S.-Iran deal, though normalization in prices and Gulf trade will take time. Conflicting stances on Israeli troop withdrawals from Lebanon suggest a deal is not imminent. Iran’s top negotiator denied U.S. claims it would use unfrozen assets to buy U.S. agricultural goods. Iran estimates Strait service fees could generate about $40 billion annually for participating states, WSJ reported. EUR/USD rebounded from an oversold position above 1.13 on softer U.S. yields and a weaker dollar post-PCE, with a rising RSI and move back above its lower Bollinger supporting a constructive near-term bias. GBP/USD firmed on softer U.S. yields as hawkish Fed expectations eased, though gains were capped by equity weakness in tech and Iran-related tensions. USD/JPY held firm, printing a doji below the key 161.96 2024 high and 162 barriers, with a series of higher daily lows supporting the pair ahead of Friday’s Tokyo CPI data. AUD/USD edged up on softer U.S. yields, stronger CNH and firmer commodities, with a supportive daily RSI offset by a sub-moving average position and a weak monthly RSI limiting upside.

Treasury yields eased about 1 basis point, paring a steeper drop after the PCE data, with the 2s/10s curve rising slightly to 26.9bp

The S&P 500 was down 0.03% in choppy trade.

WTI crude oil rose 2.53%.

Gold rose 0.83% while copper was up 2.26%.

Heading toward the close: EUR/USD +0.18%, USD/JPY -0.02%, GBP/USD +0.25%, AUD/USD +0.20%, DXY -0.22%, EUR/JPY +0.14%, GBP/JPY +0.25%, AUD/JPY +0.20%.(Robert Fullem)

(Corrects USD/CNH level to 6.7971)

• NY opened near 0.6895 after 0.6908 traded overnight, the pair hit 0.6889 early

• Buyers emerged however after the US May core & headline PCE reports

• US yields & USD dropped sharply after the data

• Gold & silver turned positive and USD/CNH traded down to 6.7971

• AUD/USD rallied to 0.6927 then dipped, it sat near 0.6920 late, was up +0.24%

• Rising daily RSI gives bulls comfort but falling monthly RSI is a concern

• AUD/USD's hold below the 10- & 21-DMAs are also worries for AUD/USD bulls
audusd


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

JP Morgan looks to sell EUR/USD on rallies above 1.14.

"We maintain current stance, given we resided forever at 1.16 this move feels enough in the short term with some factors which should provide some support (oil down here, ECB hawkishness less urgent, US yields moved enough into July data)," JPM notes.

"Whether we can bounce much is more up for debate as the market will have to consider a Fed hike conversation in July if the numbers corroborate the hawkish dot plot so trading strategy is to look to sell into any mini positioning squeeze back above 1.14 if we see it," JPM adds.

• Ether hit 1658.16 earlier in the session and also traded 1531.65 earlier

• It traded down -2.38% after Europe's close despite upbeat risk sentiment

• Lower USD and US yields were unable to inspire Ether bulls

• Rallies in gold, silver, equities & a drop in USD/CNH didn't help bulls either

• Ether traded to a 19-session low and technicals still highlight downside risks

• Daily, monthly RSIs indicate downward momentum, Ether is below the 10-DMA

• June 6 daily low is support, if it breaks the 2025 yearly low comes into focus
eth


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

Citi Research discusses the scope for another wave of JPY intervention by Japan's MoF 

"We look at the reasons the government has so far deferred a second round of intervention to buy the JPY from the perspectives of 1) the IMF Exchange Rate Classification, 2) Japan's relationship with the US, 3) the economic policies of the Takaichi government, and 4) the overall market environment," Citi notes.

"We continue to see ¥160/$-¥162/$ as the range in which further intervention is likely, with the government likely to aim to push the USDJPY down to ¥155/$-¥157/$. However, in order to maximize the medium-term effectiveness of intervention we believe the rate needs to fall to below ¥155/$ and absorb long-term USD-buy hedging demand at small and medium size enterprises (SMEs) more completely," Citi adds.

EUR/USD traded close to flat on Thursday, with technicals continuing to signal downside risks. However, long-positioned investors found some relief in the latest U.S. inflation data. May PCE figures — both core and headline on a year-over-year basis — met estimates, while the month-on-month headline reading came in softer than expected. This was enough to shift sentiment in rates markets.

U.S. Treasury yields reversed earlier gains and moved lower on the session, with the 2-year yield hitting a 5-session low and erasing nearly 75% of the rally that followed Fed Chair Kevin Warsh's press conference the prior week. March 2027 SOFR

futures, a proxy for the Fed's terminal rate, extended their rally away from structural support, reflecting reduced expectations for further Fed rate hikes. Meanwhile, U.S.-German 2-year yield spreads tightened, narrowing the dollar's yield advantage over the euro.

Adding to the tentatively positive backdrop for EUR/USD, gold and silver both turned positive following the PCE release — a signal that U.S. interest rates and the dollar may be poised to soften.

That said, bulls will need additional catalysts to reverse the pair's broader downtrend. Attention now turns to U.S. June CPI and PPI, due July 14 and 15 respectively, ahead of the Fed's July 28-29 meeting. Cooler-than-expected inflation in those reports could weigh on the dollar and U.S. rates, potentially driving EUR/USD higher.
sofr


deus


eurusd


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

Credit Agricole CIB Research highlights the prelim reading from its month-end fixing model.

"Global equity markets were broadly firmer in June. In FX, the USD has outperformed across the board on the month," CACIB notes.

"Overall, the moves in equity markets, when adjusted for market capitalisation and FX performance this month, suggest month-end portfolio-rebalancing flows are likely to be mild USD buying across the board with the strongest buy signal in the case of the USD vs the SEK," CACIB adds.

Bank of America Global Research extends its USD bullish bias into Q3.

"We extend our bullish USD view and forecasts into 3Q '26. Having recommended selling EUR/USD in May, we expect a breakout from the long-held range to extend to 1.12 in 3Q '26. Our constructive USD view was predicated on the yawning gap between US growth outperformance and rate differentials in early 2Q. This has narrowed, supporting USD, but there is likely further to run, especially under our base case of three Fed rate hikes this year," BofA notes.

"Our rates team forecast ~30bp widening of the EUR-USD 2y differential by 3Q '26, which based on historical betas would imply ~1.2% lower EUR/USD, consistent with our new forecast but recognising downside risks as FX is prone to overshoot. We stay short EUR/USD via put spreads," BofA adds.

• AUD/USD traded 0.6908-0.6887 ovenright, NY opened near 0.6890, down -0.14%

• USD buying, US yield gains helped to weigh down the pair

• Drops in gold and silver added bearish pressur eon AUD/USD

• Equity rally, USD/CNH drop may have helped limit AUD/USD's drop

• Techs lean bearish; RSIs indicate downward momentum, pair is below 10- & 21-DMAs

• US May headline & core PCE a key risk today, estimates are for increase from April
audusd


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

• FX options thrive on FX volatility and rapid price movements in either direction and are priced according to that risk

• However, USD/JPY FX option traders face the dilemma of elevated FX break-out risks in a very low realised volatility environment

• USD/JPY is trading tight intraday ranges near multi decade highs ahead of 162.00 over recent sessions

• There's not enough realised volatility to support implied volatility - the 1-month expiry already back at 7.25 from 8.0 this week

• But a break above huge 162.00 option barriers could fuel another USD/JPY surge higher with increased volatility

• A 162.00 break could also be the catalyst for the next bout of official intervention and a rapid USD/JPY reversal

• Butterfly spreads remain a favoured option in this environment - they would benefit from a spot break-out in either direction

• No surprise to see sub 1-month 10 delta butterfly spread still trading near to recent and multi-year highs

• Related comment - FX options ignore US PCE in favour of June NFP data
USD/JPY 10 delta butterfly spreads


Benchmark 1-month expiry FXO implied volatility


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

(Added Slug)

June 25 (Reuters) - FX traders should be aware that the relationship between USD/JPY and EUR/JPY has fully broken down in the near term.

USD/JPY has been grinding higher in recent weeks, continuing its broader uptrend, while EUR/JPY has stalled and suffered a setback, confirming that euro-side weakness has been acting as a drag on the cross and pulling it away from the yen-driven factors that would ordinarily keep the two pairs in lockstep.

The 30-day log correlation between USD/JPY and EUR/JPY has turned negative, currently reading -0.04, a dramatic deterioration that signals the two pairs are now moving in opposite directions on a short-term basis.

This is a significant development. A negative correlation means that shared yen-driven factors can no longer explain EUR/JPY price action.

The 60-day correlation, by contrast, is holding at 0.68, meaning the longer-term structural relationship between the two pairs remains broadly intact. The gap between the 30-day and 60-day readings of more than 0.72 shows that the current dislocation is quite extreme.

EUR/JPY is currently carrying significant euro-side risk that may not be immediately obvious to those positioned purely on a yen view.
Correlation Chart


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

• AUD/USD has traded a 20.9 pip range thus far Thursday; 0.68871-0.6908

• Those parameters are within Wednesday's 0.6883-0.6924 range

• 0.6883 is the lowest level since April 6 (0.68775 was the low that day)

• Australian employment rose by a higher than expected 40,300 in May

• CFTC data: net AUD position flipped to first short since January in week to June 16

• Data on FX positioning for the week ended June 23 will be released on Friday

AUDUSD


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

• Cable holds below 1.32 following Wednesday's fall to 1.3140

• 1.3140 is the lowest level since November 2025

• Ensuing climb to 1.3185 aided by Asian stock surge (GBP is risk-sensitive)

• 1.32 is a former support point. Large 1.3200 option expiry today

• FT-Unions combine to try to stop Ed Miliband becoming UK finance minister

• Media outlets say Reeves to be replaced when Burnham becomes UK PM

GBPUSD


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

• Shares of Kalgoorlie Gold Mining slip 7.4% to A$0.025, their lowest since June 12

• KAL secures a cluster of 15 near-contiguous tenements along strike from the Gourdis and Vause gold mines in Western Australia; No deal value disclosed

• Package covers ~23.7 km² of prospective greenstone stratigraphy of the Yandal Greenstone Belt, one of the most productive gold corridors in Western Australia

• YTD, stock has halved in value

(Reporting by Kumar Tanishk in Bengaluru)

((; X: @thatstanishk Click here))

• Shares of Xpedra Resources advances as much as 11.8% to A$0.019, marking its biggest intraday pct gain since June 12

• Minerals exploration co says that continued drilling has further confirmed higher-grade shallow gold deposits at the Springfield project in New South Wales

• Adds, mineralisation points to potentially scalable reserves, with further assays and probes still underway

• Nearly 2.5 million shares changed hands vs the 30-day average of 1.9 million

• Stock mostly flat YTD

(Reporting by Shravya Marakini in Bengaluru)

• GBP/USD +0.1% Thur in Asia after closing above critical 1.3160 pivot Wed

• Close below 1.3160 may see pair accelerate toward 1.3040 support zone

• Surging oil supply not providing sentiment uplift widely anticipated

• DXY remains elevated near 13-month 101.80 high n firming FFR hike bets

• U.S. May core PCE price index due Thur, Reuters poll consensus +0.3% m/m

• Range Asia 1.31625-82, support 1.3040, resistance 1.3270-75 1.3867 1.4250
GBP Daily 55-DMA


DXY Daily 55-DMA

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

• AUD/USD -0.1% Thur despite bigger than expected rise in employment

• AU May employment +40.3k jobs (poll +30k), 4.4% unemployment (poll 4.4%)

• AU May household spending +1.3% m/m (prior -1.1%), keeps pressure on RBA

• Anticipated oil supply surge driving prices down, but growth concerns linger

• RBA's Hauser welcomes lower oil prices but says inflation still far too high

• AUD 0.6834 support within reach, break below would hasten move toward 0.6660

• Range Asia 0.6890-0.6908, support 0.6834 0.6660, resistance 0.7089 0.7200
AUD Daily 55-DMA

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

• Australian gold stocks fall as much as 4.1% to hit their lowest level since June 15

• Sub-index on track for a third straight session of losses

• Gold fell to a more than seven-month low overnight, due to pressure from a firmer U.S. dollar and growing expectations of interest rate hikes [GOL/]

• Shares of gold miners Northern Star Resources and Evolution Mining drop more than 3% each

• Sub-index has fallen 17.9% this year, including session moves

(Reporting by Roshan Thomas in Bengaluru)

• Despite multiple recent threats, Japan's MOF refraining from FX intervention

• Cat and mouse game with market continuing, resulting in USD/JPY inching up

• USD/JPY 161.74-79 EBS so far in Asia today, nearing 161.93 high Monday

• Offers trail up to 162.00 option barriers, defensive sales, some exporters

• Stops above seen large however and will remain at back of spec minds

• Seems JPY shorts have increased even more over the past week, market ripe?

• Intervention now would likely have good impact but BOJ help would go farther

• Demand good on dips however, Gotobi Tokyo fix today and importers eyed

• Retail and spec interest, flows too, foreigner hedging of Japan stock buys?

• Tech support from 161.68 hourly Ichimoku kijun, cloud 161.49-53 below

• Option expiries today supportive too, total $3.2 bln from 161.50 to 161.00

• Near spot between 161.70-85 $933 mln, 162.00 $782 mln, 162.50-55 $915 mln

• JGB-US Treasury 2-year rate differentials still on wide side at @177 bps

• BOJ Tamura scheduled to speak later today, more hawkish-speak?

• Related comments , , ,

• And , , , also

• US markets , , ,

• On oil/USD , for more click on [FXBUZ]

USD/JPY daily:


USD/JPY hourly:

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

• NZD/USD is down 3.7% since failing to break above the 55-DMA on June 15

• Currently -0.1% Thur, 7-consecutive trading days of decline looming

• NZD weak despite futures pricing implying 75.4% chance of Jul 8 RBNZ hike

• Further slide toward 0.5580 support likely sans left-field stimulant

• Surging oil supply not providing sentiment uplift markets expect

• RBNZ Governor Breman will attend the annual closed-door BIS conference Fri

• Range NZ 0.56395-55, support 5580, resistance 0.5990-95 0.6012 0.6093
NZD Daily 55-DMA

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

MUFG Research discusses the summary of opinions from the BoJ's June meeting

"Pressure on Japan to intervene again to support yen has increased after the BoJ’s latest rate hike failed to disrupt the weakening trend. The release of the minutes overnight from the June policy meeting indicated support for further rate hikes. the BoJ has become less concerns over downside risks to growth while many members expressed awareness of upside risks to prices. The minutes suggested that one or two members may propose voting for another hike as soon as September or October. One member noted it is desirable ”to consider whether to raise the policy interest rate as appropriate with intervals of a few months in mind”," MUFG notes.

"The Japanese rate market is now pricing in around 16bps of hikes by October. However, market expectations for the BoJ to speed up rate hikes have not yet triggered a stronger yen," MUFG adds.

• AUD/USD -1.7% wtd as sentiment sours despite U.S.-Iran peace progress

• Commodities lower across the board: Copper -2.6%, Gold -2.7%, WTI -4.6%

• AU May employment data due Thur, Reuters poll: +30k jobs, 4.4% unemployment

• RBA's Hauser welcomes lower oil prices but says inflation still far too high

• AUD targeting 0.6834 support, break below opens door for fall toward 0.6660

• Overnight range 0.6883-0.6906, support 0.6834 0.6660, resistance 0.7089
AUD Weekly 52-WMA

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

The dollar held broad, haven-linked gains on Wednesday as a bull flattening of the yield curve coincided with falling commodity prices, soft U.S. housing data and uncertainty over progress in U.S.-Iran talks.

Metals extended losses on China demand concerns and taught Fed policy, while WTI crude slipped below $70/bbl on increased Hormuz traffic. U.S. Treasury Secretary Scott Bessent supported scaling back Fed guidance but urged openness on inflation risks while adding that maintaining dollar dominance is essential. U.S. Energy Secretary Chris Wright said 20 million barrels of crude oil exited the Strait of Hormuz in the past 24 hours, with flows still disrupted by Iranian mines but expected to continue. U.S. President Donald Trump said Iran agreed to no tolls for Hormuz transit, while Secretary of State Marco Rubio noted Iran talks will resume later this month. Israel’s defense minister said troops will stay in southern Lebanon, a hurdle for Iran-U.S. peace talks. In data, U.S. new home sales fell for a second straight month, declining 7.3% in May. The Bank of Canada's governing council agreed to keep its monetary policy nimble to respond to new U.S. trade restrictions, the impact of energy prices, or both playing out at the same time, according to the minutes of its meeting.

The dollar index held its gains after hitting a new one-year high beyond an expanding Bollinger Band, with momentum pushing it deeper into overbought territory. Dollar call buying underpinned though a dip in futures open interest suggest longs may be getting stretched. Renewed weakness in the Chinese yuan on PBOC rate cut speculation weighed on metal prices and supported the dollar. EUR/USD fell to a one-year low of 1.1325 before settling, though bearish momentum indicators and a completed head-and-shoulders top signal further downside risk. GBP/USD dipped below its lower Bollinger to a seven-month low of 1.3140, with bearish momentum on Fed-BoE divergence signaling risks toward 1.3100. USD/JPY rose on haven dollar demand and quarter-end flows, with a series of higher lows offering an upside bias toward the 161.96 2024 high despite overbought conditions and intervention risks. AUD/USD slipped as risk sentiment deteriorated and metal prices fell, with bearish position below 0.70 and its 10-day moving average signaling downside bias.

Treasury yields were down 6 to 9 basis points as the curve bull flattened. The 2s-10s curve fell about 3 basis points to +25.8bp.

The S&P 500 fell 0.27% as tech and energy shares weighed. WTI oil dropped 4%, briefly dipping below $70/bbl as gains since the Iran war outbreak have been almost entirely erased.

Gold fell 3%, silver tumbled 8% and copper slid 3% amid dollar gains and a weaker CNH.

Heading toward the close: EUR/USD -0.22%, USD/JPY +0.12%, GBP/USD -0.30%, AUD/USD -0.40%, DXY +0.20%, EUR/JPY -0.12%, GBP/JPY -0.21%, AUD/JPY -0.29%.(Editing by Burton Frierson Robert Fullem is a Reuters market analyst. The views expressed are his own)