• USD/CNH sagged to 6.7684 Wed, likely to head lower still

• Bearish cues align as 21, 55 DMAs both turning south

• Bollinger downtrend channel in effect, capping at 6.7792

• US producer prices surprisingly fell in June

• Data tanked UST yields, weighed on USD broadly, lifted stocks

• China bank lending disappoints on weak demand
CNH


(Ewen Chew is a Reuters market analyst. The views expressed are his own.)

Morgan Stanley Research preview the UK monthly GDP print due on Thursday.

"In may we see some slowdown in momentum in manufacturing, with ICT and hospitality countering the boost to services sector growth from strong retail sales," MS notes.

"With this, our forecast for 3M/3M growth comes in at 0.5%Q. We continue to tracl 2Q26 GDP growth at 0.2%Q," MS adds.

(Fixes typo in bullet 3)

• GBP$ surged higher, up 1.23% at 1.3550 in NorAm afternoon; Wednesday range 1.3552-1.3382

• US PPI confirmed current dip in inflation, which has weighed on UST yields & Fed policy tack

• Report Burnham selecting fiscally conservative Hm Sec Shabana Mahmood as FinMin aided rise

• Market had been wary Burnham would select Ed Miliband seen more fiscally expansive as FinMin

• Sterling considerable spec short vs USD likely unwinding as catalyst for move higher

• GBP$ res 1.3552 Wed high, 1.3600 psychological lvl, 1.3658 daily high May 1

• Supt 1.3500 big-figure support, 1.3437 daily cloud top, 1.3381 Wednesday low

Chart:


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

• NY opened near 1.1420 after EUR/USD moved downward in Asia & Europe's morning

• The pair hit 1.1406 in early NY trading but buyers emerged & a rally followed

• US PPI downside surprise sank the USD and US yields

• US-DE spreads tightened; gold, equities gained & USD/CNH fell

• EUR/USD rallied above Tuesday's high, broke the trend line off the May 11 high

• 1.1475 traded in NY's afternoon, EUR/UD was up +0.48% late in the day

• Rising daily, monthly RSIs & pair's hold above the 10- & 21-DMAs are bullish signs
eurusd


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

• NY opened near 0.6985 after 0.6972 traded overnight, the pair's rally extended

• Downside surprise to US June PPI sent USD, US yields

lower

• Gold , equities rallied & USD/CNH fell towards 6.7665

• AUD/USD broke the trend line off the May 13 high, hit a 3-week high

• The pair traded above 0.7015 in NY's afternoon, AUD/UDS was up +0.58%

• Techs lean bullish; trend line break, rising daily, monthly RSIs are bull signs

• AUD/USD's hold above the 10- & 21-DMAs adds to the bullish signals
audusd


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

Citi discusses the scope for Japanese pension funds to repatriate investments.

"As hinted by Finance Minister Satsuki Katayama last week, the Takaichi government may be considering a change to the policy mix portfolios of the GPIF and other public pension funds. This is no surprise given the government's efforts to defend the JPY and the overall direction of its economic policy. However, given the relationship with the US, a large-scale change that could adversely impact overseas markets would be difficult, at least in the near term," Citi notes.

"More likely is an incremental approach that makes use of the allowances for deviation from the basic portfolio, in our view. Corporate pension funds are unlikely to directly follow the lead of the GPIF but could well increase investment in Japanese bonds over time given the recent rise in yields. This should provide some support to the JPY in the forex market," Citi adds.

• USD/JPY stalls ahead of the cycle high (162.84) once again

• With both CPI and PPI now leaning softer, USD momentum on the topside should fade

• Pullbacks remain shallow, underlying bid supported by persistent carry demand across JPY crosses

• Cross-JPY strength continues to provide a floor for USD/JPY, limiting downside follow-through

• However, with spot firmly in intervention territory, appetite for a sustained topside break remains constrained

• Resistance seen at 162.84 - a move through 163 would materially increase asymmetric risks of a sharp pullback

• Initial support at the 200-hour MA cluster (162.07)

• Break below exposes the post-U.S. CPI swing low at 161.60

• Deeper support seen at 160.70
USDJPY daily chart


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

Goldman Sachs Research on revising its EUR/USD and USD/JPY forecasts.

"For much of the past few months, we have said that economic trends should support the Dollar against low yielders on a tactical horizon, and revised our forecasts in that direction in mid-March. We increasingly think these forces look likely to linger for longer, and we are unlikely to return to broad-based, sustained Dollar depreciation for some time," GS notes.

"To reflect an ongoing divided Dollar environment, we are revising our forecasts for EUR/USD to 1.14, 1.12 and 1.12 in 3, 6 and 12 months (from 1.14, 1.18 and 1.20 previously). We have also revised our forecast path for USD/JPY to 162, 163 and 165 (from 160,158 and 155 previously)," GS adds.

Sterling's near-term bias remains tilted higher after Wednesday's below-forecast U.S. PPI reinforced Tuesday's soft CPI, signaling — at least for now — that U.S. inflation has resumed its descent toward the Fed's 2% target and reviving expectations for lower U.S. rates.

Despite the favorable backdrop for the pound, traders remain cautious, keeping GBP/USD within its recent range of 1.3276-1.3452, albeit near the top of that band. The reluctance to push the pound higher stems from concerns that the current inflation data does not yet reflect the recent surge in oil prices, which have rebounded from mid-$60s to around $80 per barrel amid escalating U.S.-Iran tensions.

Also supporting the pound is the unwinding of sizeable GBP/USD net speculative shorts. With UK political and fiscal concerns abating and U.S. rate-cut expectations firming after the inflation data, traders are trimming heavy short exposure, preferring to lighten risk as summer liquidity thins.

Technically, GBP/USD meets initial resistance at 1.3437, the daily cloud top repeatedly tested of late, ahead of 1.3452, the July 10 high. A close above 1.3452 opens the way toward 1.3504/09, the May 25/26 highs, and — should global inflation genuinely ease further — bulls will target 1.3658, the May 1 high. Supports sit at the July 8 low of 1.3323 and the range base near 1.3276, leaving cable poised near range highs as markets await confirmation that disinflation can withstand rising energy costs.
Sterling Chart:


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

Danske Research opened a short EUR/USD position in its recommendation portfolio.

"Yesterday, we recommended a short EUR/USD spot position (with a target of 1.1100, stop-loss 1.1550), which admittedly did not get the best possible start after the US June CPI surprised to the downside on a broad basis (core CPI 2.6% y/y, cons. and Danske 2.8%). Core goods inflation recorded its second negative m/m reading in a row, while both housing and non-housing services inflation cooled as well. Markets erased most of the pricing for a July hike, and we maintain our base case for the first hike in December," Danske notes.

"Nevertheless, EUR/USD reversed most of its initial rise later on as Kevin Warsh underscored that the reading did not signal 'mission accomplished' for the Fed during his testimony for the House financial services committee. Goolsbee echoed Warsh's sentiment later by saying that he 'never wants to overreact to one month [of data]' even if the reading was 'surprisingly benign'," Danske adds.

Bank of America Global Research examines the potential implications of portfolio rebalancing by Japan's public pension funds.

"We do not take a view on whether such rebalancing will occur, nor on its scale or direction. However, given higher JPY yields, the yen's decline to date, and recent remarks by Minister Katayama, markets have begun to contemplate the possibility of a shift from foreign assets into domestic assets, particularly in the fixed income space," BofA notes.

"Should such a rebalancing occur, additional demand from public pension funds would place downward pressure on JGB yields, especially in the 10-20yr sector. In FX markets, the impact would be yen-positive for several months, especially against EUR in case of a shift from foreign bonds to domestic bonds. Lower foreign asset holdings would reduce the absolute size of future rebalancing flows in the future, marginally weakening their volatility-suppressing effect on FX markets," BofA adds.

• AUD/USD traded 0.6972-0.6993 overnight, NY opened near 0.6985, up +0.11%

• Balanced risks helped keep the range tight & consolidation to begin

• Rally in AUD/JPY and equities helped underpin the gains

• Firm USD, US yields & drops in gold, silver, copper limited the gains

• Rising daily, monthly RSIs & AUD/USD's hold above 10- & 21-DMAs are bull signs

• The pair does remain below the down trend line off the May 13 high however

• US June PPI & July NY Fed manufacturing survey are data risks in NY's morning
audusd


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

• Implied volatility is a key parameter of an FX option price - reflecting FX realised volatility and expectations

• Implied volatility trades long term lows across the board in G10 FX- but GBP/USD stands out

• GBP/USD 3-month expiry at lows since 2020 and 1-month nears lows since 2014 at 5.0 from December

• This stands out because they are near/below historical volatility - past realised volatility over the same time frame

• Historical volatility is often used as a fair value measure and GBP/USD implied vol consequently offers value

• Related comment - Cheap FX hedges, costly assumptions
GBP/USD FXO implied volatility


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

• Cable has traded a 27.5 pip range since the London open; 1.3392-1.34195

• Those parameters are well within Tuesday's 1.3367-1.3442 NY session range

• Oil prices rise 2% as hostilities worsen in the Middle East

• U.S. PPI data due 1230 GMT; 0.0% MM, 6.2% YY f/c. Core f/c 0.4% MM, 5.2% YY

• Fed chief Warsh to address Senate Banking Committee from 1400 GMT

• BoE's Bailey says UK economy 'fairly soft'. UK May GDP data due Thursday

GBPUSD


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

• EUR/USD 1-month 25 delta option risk reversals hold 0.425 EUR puts over calls despite the broader vol collapse

• This downside skew has eased from a 0.55 peak early Tuesday, signalling reduced downside risk to spot

• However, it's still above last week's 0.35 level, showing those downside risks have not yet fully unwound

• Spot may be range bound, but options still price a meaningful EUR/USD downside tail risk

• The rest of the term structure shows risk reversals holding a 0.4 EUR-put premium out to 1-year tenors

• Suggests a structural, not just event-driven, downside bias in EUR/USD - for now
EUR/USD 25 delta risk reversals


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

• EUR/USD rally is stretched toward 1.1474 peak 20-day Bollinger bands

• Target (38.2%) for minor correction May-June drop is 1.1463

• Although traders are short, bets are small at $2.3 billion

• Price of natgas is highest since early March - start ME conflict

• Crude $85 per barrel ($15 increase since June)

• Oil rally followed the soft June CPI which triggered Tue's EUR/USD rally

• Futures remain biased toward US rate hikes (almost 50bps by June 2027)

•
EURUSD


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

• Cable rises to 1.3419 intra-day top as lower risk of July Fed hike weighs on USD

• 1.3442 was Tuesday high, after dollar fell on surprisingly soft U.S. CPI data

• Retreat from 1.3442 based 1.5 pips shy of 1.3367 (early NY low Tuesday)

• Fed chief Warsh to address Senate Banking Committee from 1400 GMT

• Burnham is set to replace Starmer as Britain's prime minister next week (July 20)

• FT-Ed Miliband trails Shabana Mahmood in race to become Burnham's chancellor

GBPUSD


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

• Shares of Anglo-Australian miner BHP rise as much as 4.4% to A$61.27, its biggest intraday pct gain since April 8

• Chile's Ministry of Mining on Tuesday summoned mining companies and unions to coordinate actions in response to the potential impact of a powerful winter storm expected to dump heavy rain across key copper-producing regions.

• BHP, whose flagship assets include the Escondida mine in Chile, the world's largest copper mine, derives over 65% of its copper output from the country, according to its third-quarter production report

• Move appears to be driven mainly by weather risks in Chile, copper accounts for roughly half of BHP's earnings, said Philip Pepe, senior equities analyst at Shaw and Partners

• Storm threat comes as Chile accounts for about quarter of global mined copper production, with copper a key component in products ranging from air conditioners to data centres

• BHP is expected to post its fourth quarter production report on July 16

• Stock has risen 33.8% this year, including session moves

(Reporting by Roshan Thomas in Bengaluru)

• Shares of Australian Gold and Copper Ltd rise as much as 4% to A$0.13, their highest level since July 10

• Company says drilling results at silver-gold-base metal deposit Achilles in New South Wales (NSW) returned high-grade mineralization

• Adds completed step-out drilling programme has confirmed Achilles mineral system remains open at depth

• Stock down 42.2% YTD, including session's moves

($1 = 1.4306 Australian dollars)

(Reporting by Subhalakshmi Dey in Bengaluru)

July 15 (Reuters) - Yen-funded summer carry trades are likely to focus on NZD/JPY and GBP/JPY this year. Given wider uncertainty around the U.S. dollar, moves into these two crosses should appeal on favourable interest rate differentials alone. NZD/JPY has been a star performer, rallying from the 91.00 area on June 24 to a high of 94.44 Tuesday. It has broken above its daily Ichimoku cloud between 93.03-90 and looks to be heading for a possible test of the May 29-June 1 double-top at 95.41-42. The two-year interest rate differential between Japanese and New Zealand government bonds is roughly 217 basis points and five-year paper is around 212 bps. These spreads could widen further with the Reserve Bank of New Zealand expected to raise rates by another 50 bps by end-2026 and the Bank of Japan seen hiking 25 bps at most in September or October , . GBP/JPY has been ratcheting higher for even longer. From a trough of 184.31 on April 9, 2025, it traded to 218.00 on July 9 on relatively wide JGB-gilt differentials and positive sentiment around likely new UK Prime Minister Andy Burnham . GBP/JPY could well test higher with the July 9 high its best since 222.73 in January 2008. The rate differential in JGB and gilt two-year maturities is around 299 bps, in five-year paper around 263 bps and in ten-year paper around 232 bps. Meanwhile, JGB-U.S. Treasury differentials are around 286 bps in two-year paper, 244 bps in fives and around 192 bps in tens. These are still attractive spreads but the market is already very long U.S. dollars, and USD/JPY remains under almost constant threat of Japanese FX intervention.

Related comment , also . For more click on [FXBUZ].

NZD/JPY daily:


GBP/JPY daily:

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

• Shares of Australia's Maronan Metals rise as much as 7.6% to A$0.425, their biggest intraday pct gain since July 3

• Silver explorer says infill drilling north of Starter Zone intersected shallow high-grade silver-lead mineralization

• Starter Zone is part of Maronan Silver-Lead-Copper-Gold Project in Queensland (QLD)

• Stock has fallen 2.4% this year, including session moves
(Reporting by Roshan Thomas in Bengaluru)

• USD/JPY upside limited yesterday on dovish US CPI data

• Data lessened chance of hike this month but Fed hawkish stance to remain?

• FOMC Chair Warsh promised appropriate policy despite any political pressure

• USD/JPY range yesterday 161.60-162.48, Asia so far today 162.13-27 EBS

• Back to stasis on or around 162.00? Japan FX intervention risk still

• US yields off post-CPI but US-Iran tensions still high

• JGB-US Treasury rate differentials ramped up yesterday to recent wides

• In 2s, rate differential to around 286 bps, in 10s to around 192 bps

• Technically, USD/JPY moving back into its 161.88-162.23 hourly Ichi cloud

• 100-HMA just below in cloud at 162.14, ascending 200-HMA 162.00

• Nearby option expiries today 161.00 $880 mln, 161.85-162.00 $1.8 bln

• Less topside, between 162.15-30 total $549 mln, 163.00-35 total $1 bln

• Related comments , , ,

• And , , also

• US markets , , ,

• On Fed , , US CPI , US-Iran

• On flows , , for more click on [FXBUZ]

USD/JPY daily:


USD/JPY hourly:

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

• AUD/USD hovers near a three-week high after closing 0.85% higher Tuesday

• Boosted by softer-than-expected U.S. June CPI, cooling Fed rate hike bets

• Strong U.S. bank earnings, recovery in chip shares lift risk, support AUD

• Upside likely limited on U.S.-Iran hostilities, higher oil prices

• Fed Chair Warsh says focused on inflation, doubles down on Fed's 2% target

• Resistance 0.6995-0.7000, 0.7020-25, support 0.6960-65, 0.6940, 0.6910-20

• China Q2 GDPand monthly activity data eyed Wed; Tue range 0.6913-0.6992
AUD:

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

Morgan Stanley Research previews the US June retail sales report due on Thursday.

"We expect total retail sales rose by 0.1% m/m in June, with control group sales up 0.5%m/m. We expect total retail sales ex autos declined by 0.2%m/m. Total sales are dragged down by gas stations (down 6.1%m/m as gas prices fell) as well as sales of building materials (down 0.5%m/m). Other components rise (autos up 1.4%m/m, and restaurants up 0.2%)," MS notes.

"Our estimate of retail control is boosted by the following factors: Prime day and other competing promotions moved to June this year instead of July, and along with the World Cup, we expect online sales were strong this month; Census seasonal factors for June 2026 and our estimate of a sharper rise in control group prices (because of food and core goods)," MS adds.