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Canadian dollar weakens to near 1.38 amid rising geopolitical tensions, analysts say
The Canadian Dollar (CAD) fell last week due to rising geopolitical tensions, closing weaker. This weekend, it continued to trade around 1.38 against the USD.
Currently, the USD has limited potential for further gains against the CAD. The CAD’s performance isn’t driven by fundamentals and is currently disconnected from crude oil prices, even though the USD finished the week on a strong note.
Swiss sight deposits increase to CHF 442.5 billion, boosting money market liquidity
Swiss National Bank (SNB) reported total sight deposits of CHF 442.5 billion for the week ending June 20, up from CHF 434.8 billion the previous week.
Domestic sight deposits rose to CHF 430.0 billion from CHF 426.7 billion the week before.
Swiss Sight Deposits Update
This increase follows two weeks of declines in sight deposits, keeping levels stable compared to recent months. The SNB has recently introduced a tiered remuneration system for sight deposits. This system discourages banks from keeping too much cash with the central bank by imposing penalties. The goal is to improve liquidity in the Swiss money market. We are seeing a short-term shift in the trend of declining Swiss sight deposits. Total sight deposits at the SNB have jumped to over CHF 442 billion after a couple of quieter weeks. The rise in domestic deposits suggests a renewed demand or strategic changes from local banks. This upward movement may indicate that banks in Switzerland are less willing to lend for the short term or are holding back on using any excess cash. This could signal their expectation of tighter financing conditions or reduced liquidity in the markets we monitor closely, especially considering the SNB’s current policy.Impact On Short Term Funding
The tiered interest system remains active. It’s a monetary strategy aimed at encouraging banks not to hoard large balances at the SNB. By imposing penalties on certain deposit tiers, the SNB hopes to push funds back into the broader money market and promote more lending. However, a rise in deposits, despite these penalties, may indicate a cautious approach or adjustments by liquidity providers. The increase in domestic deposits might be short-lived, possibly just a reaction to short-term settlement opportunities or upcoming maturities. It could also signal a renewed cautiousness in response to recent macroeconomic or geopolitical events. The SNB has clearly communicated its interest rate direction and policy outlook this month, so any reactions from banks may carry into early July. From our perspective in the derivatives market, these changes are significant as they affect short-term Swiss funding and future pricing expectations. A deposit increase of this size, especially with penalties in place, may lead us to reevaluate CHF liquidity risks or potential changes in repo demand. With this recent shift and no immediate changes expected from the SNB, the balance of regulatory pressures and voluntary asset positioning offers clarity for short-term pricing strategies. We should closely monitor spreads on Swiss franc interest rate products. If banks start to pull funds aggressively from deposits, it might temporarily affect volatility in short-term products. In the coming days, it would be wise to watch for any fluctuations in the moving averages of domestic sight deposits. Weekly changes like these, especially in relation to SNB policy signals, provide valuable insights. Keep an eye out for any significant shifts—we may need to adjust our assumptions if the behavior of these balances changes noticeably. Create your live VT Markets account and start trading now.UOB Group analysts believe that AUD/USD is likely to move to 0.6355.
Analysts suggest the AUD/USD pair could drop to 0.6355. Recently, the AUD fell to 0.6446 but then bounced back. While there was a temporary rally, a decline below 0.6400 seems unlikely without stronger momentum. Key resistance levels are at 0.6465 and 0.6480. If these are breached, it could ease the current downward pressure.
In the next few weeks, the AUD is expected to trade within a certain range. Initially, this is between 0.6430 and 0.6550. However, for a move towards 0.6355, we need a close below 0.6430. This situation will hold unless the strong resistance level at 0.6505 is broken. Recent price movements showed a dip below 0.6430, but whether there will be further declines depends on sustained pressure.
Consolidation Likely
The recent action around the 0.6446 level showed a slight dip before a brief rally. This movement didn’t test new support levels or change the overall outlook significantly. It seems the pair is leaning toward consolidation rather than dramatic changes. Although there was brief weakness below 0.6430, buying interest came back quickly, indicating fading momentum below this level. The resistance zone between 0.6465 and 0.6480 has held back further gains multiple times and remains a key barrier. If this area is convincingly broken, we might see a temporary easing of the selling pressure from recent sessions. Until this happens, the resistance remains strong. Support below 0.6400 is unlikely to be tested without a significant increase in volatility, which we haven’t observed yet. For the AUD to move toward 0.6355, it would need to drop below 0.6430, and so far, the market hasn’t shown follow-through. We remain cautious about downward movement unless sellers can hold below 0.6430 for more than one session, ideally with confirmation through lower intraday highs.Range Guidelines
The highlighted range between 0.6430 and 0.6550 still applies. It’s narrow enough for short-term setups to develop but wide enough that we should be selective and not chase every movement. We see no reason for a clear directional bias unless 0.6505 is crossed or there’s a confirmed drop below 0.6430 with multiple daily closes. We’re watching these boundaries but see no urgency to act until the market shows clearer intent. In derivatives, positioning should remain tactical. Look to fade extremes within this range, especially near known rejection levels. Currently, there isn’t enough conviction on either side to support breakout strategies. Keep an eye on momentum indicators and volume; significant shifts in these could signal an upcoming move. Until then, patience is essential. Create your live VT Markets account and start trading now.Germany’s PMIs indicate potential growth recovery in manufacturing, services, and composite indices
Germany’s flash manufacturing PMI for June came in at 49.0, matching expectations and improving from May’s 48.3. The services PMI was at 49.4, which is better than the expected 47.5 and up from the previous 47.1. The composite PMI also rose to 50.4, surpassing the forecast of 49.0 and up from 48.5 in the previous month.
These findings show that both the Germany Composite PMI Output Index and the Services PMI Business Activity Index reached their highest levels in three months. The Manufacturing PMI Output Index hit a 39-month peak, while the overall Manufacturing PMI reached a 34-month high.
This suggests that Germany’s manufacturing sector is improving after four months of rising production, hinting at growth in the first half of the year. Although a PMI of 49 points indicates mild recessionary conditions, there’s a positive trend since the start of the year. Order intakes are increasing, and this growth isn’t just due to US advance orders.
In the service sector, business activity is stabilizing, with only slight declines. Staffing levels are up compared to last month. Companies have raised prices more than they did in May, indicating better-than-expected conditions. Changes in inventory levels might signal economic shifts, though current decreases might be due to higher-than-expected demand. The coming months will reveal if companies gain confidence in economic growth or continue reducing inventories cautiously.
Amid this optimism, Germany might break free from the erratic growth seen over the past two years, with initial government measures expected to support growth in the latter half of the year.
The initial data indicates a subtle but steady shift. A manufacturing PMI of 49.0, while below the line separating contraction from expansion, marks progress. It shows a small acceleration from 48.3 last month. With the services PMI at 49.4—exceeding the estimate of 47.5—the combined readings above 50 suggest that the economy may be starting to recover, even if slowly.
Consistency is catching attention. With both the manufacturing and services sectors growing for three months straight, the idea of recovery is gaining traction as a reality. Particularly with the composite PMI reaching 50.4—exceeding both forecasts and previous levels—indicates parts of the economy are no longer shrinking, a key requirement for momentum.
For market observers, the strength in the manufacturing output index—hitting highs not seen since 2021—highlights a shift towards domestic orders rather than relying heavily on external demand. This shift can change expectations in the weeks ahead.
Analysts and strategists will note that the supply side remains constrained but is not worsening, and employment is on the rise. Increasing employment typically leads to a positive cycle of higher output and stronger consumer spending. The gains may be small, but they are durable.
The service sector data is also significant. While it’s not experiencing a dramatic rebound, it maintains a level close to balance. The gap between expectations and reality in service sector strength allows for positioning based on stability, a rare opportunity in this region. Recent price increases show that companies can protect their margins, indicating a return of price tolerance.
Keller highlighted inventory strategies as an indicator of confidence. Reduced stockpiling this month may signal tightening conditions due to unexpected demand changes, rather than businesses simply destocking out of fear. This important distinction can influence trader behavior as they assess whether companies are being strategic or reacting to surprises.
On the political front, recent government measures may not be groundbreaking but can subtly improve sentiment. Such changes can spark interest in longer-term investments and narrow spreads. History shows that when macro and micro factors align in this way, cycles tend to solidify quickly and pricing can adjust before mainstream data catches up.
In summary, while today’s numbers may not be loud, they hold valuable insights. The message is gradual, clear to those paying attention to the underlying movements. It’s not about sharp turnarounds, but a shift towards positive trends. And that’s where we find ourselves.
Indian Rupee strengthens against the US Dollar after falling near 86.90, boosted by rising PMI
The Indian Rupee strengthened slightly after hitting about 86.90 against the US Dollar during Monday’s European trading session. This rise followed strong preliminary HSBC PMI data for June, which showed the Composite PMI increased from 59.3 in May to 61.0, thanks to healthy activity in both manufacturing and services.
Oil prices fell back, which helped the Indian Rupee recover from its earlier decline. However, surging crude prices from US actions in the Middle East could keep pressure on the Rupee. In the Indian stock market, the Nifty50 index dropped 1% but later regained some of its losses.
US Strikes on Iranian Sites
Over the weekend, the US conducted strikes on three Iranian nuclear sites. Iran plans to close the Strait of Hormuz, which could affect global oil supply. As a result, the Indian Rupee, currently around 86.95, could fall to Rs. 88 against the US Dollar if tensions continue, leading to a larger current account deficit for India. In India, the Reserve Bank of India cut its Repo Rate by 50 basis points to 5.5%. Meanwhile, in the US, discussions about interest rate cuts created uncertainty. The USD/INR pair looks strong, supported by the 20-day EMA, with the April 11 high acting as a crucial resistance point. What we’ve observed so far this week is a balancing act between positive domestic factors and ongoing external challenges. The momentum in India’s private sector highlights solid internal demand, particularly with the June composite PMI moving further into expansion territory. Strong performance in both manufacturing and services supports this view. Normally, such data would boost local assets, including the currency. However, the Rupee’s earlier bounce wasn’t stable, closely linked to energy market trends and risk-off sentiment. Energy prices continue to complicate the direction of the domestic currency. The initial drop in oil prices helped the Rupee recover from its earlier weakness, but this relief seems precarious. With potential retaliation from Tehran and US military actions targeting Iranian sites, geopolitical risks blend with commodity expectations. Markets are already assessing potential disruptions to the Strait of Hormuz, which could limit global oil supply just as demand is expected to rise in the summer. For India, a net oil importer, this raises immediate concerns about trade balances and the impact on inflation. A widening current account deficit would be a significant concern.Central Bank Policies
The actions of central banks add another layer of complexity. The RBI’s unexpected 50 basis points cut in the Repo Rate signals that policymakers may be preparing for external pressures. This typically weakens the Rupee, as it improves liquidity but can decrease short-term currency value due to narrowed rate differences with other economies. Internationally, the Fed faces its own timing challenges. Markets react to not only recent data but also conflicting statements from Fed officials on the pace of rate cuts. This has caused volatility in USD pairs, although the Dollar Index remains relatively stable. This supports the ongoing upward trend of the USD/INR pair, which benefits from the reliability of the 20-day exponential moving average while eyeing a retest of the resistance seen on April 11. In this context, options and futures traders should note the upward bias in the pair, especially if crude prices persist in rising and any shifts in US rate policy occur. Hedging strategies may be beneficial for managing moderate Rupee depreciation, particularly if energy-linked asset volatility increases in the coming weeks. Looking ahead, the possibility of the pair reaching Rs. 88 is not just speculation—it has technical and fundamental backing, especially if prolonged conflicts disrupt oil supply or push Brent crude prices higher. Moreover, should risk-off sentiment prevail, foreign outflows from domestic equities could also pressure the local currency. While the Nifty50 showed resilience by recovering half of its earlier losses, fluctuations in foreign institutional positioning will likely remain volatile amid the current macro environment. Over the next fortnight, it’s crucial to stay aware of commodities-related news and any significant naval activity in the Gulf. Rapid adjustments to options premiums and directional trades may be needed following such developments. Maintaining flexibility in positions near established support and resistance levels will help manage risks effectively. Create your live VT Markets account and start trading now.Core inflation data, consumer confidence reports, and central bank testimonies will shape market expectations this week.
The week kicks off with the release of flash manufacturing and services PMIs for the eurozone, the UK, and the US. In Japan, the BoJ will disclose core CPI year-on-year figures, and Canada is set to publish its inflation data.
Fed Chair Powell will testify about the Semiannual Monetary Policy Report in Congress, with important appearances scheduled for Tuesday and Wednesday. Australia will also release its inflation data on Wednesday.
US Economic Data Release
On Thursday, the US will release its final GDP quarter-over-quarter, weekly unemployment claims, and month-over-month durable goods orders. Japan will report Tokyo core CPI year-on-year on Friday, while Canada will provide its monthly GDP figures. The US will publish core monthly PCE price index data along with personal income and spending numbers. Canada is expecting a 0.5% month-over-month CPI, up from -0.1% previously, while overall inflation is projected to stay low at 1.7%. Australia’s CPI year-on-year is predicted to drop to 2.3%. In the US, minor changes in core durable goods orders are anticipated, with total orders likely improving due to increased aircraft demand. Japan’s Tokyo core CPI year-on-year is expected to decrease slightly as government measures help ease prices. The labor market remains strong, and retail sales could benefit from government subsidies. In the US, the core PCE price index month-over-month is expected to hold steady at 0.1%, with personal income and spending also forecasted to remain unchanged. While consumer activity is softening, overall spending is still above pre-pandemic levels, supported by income growth, partly due to social security adjustments. This week starts with new data aimed at revealing industrial and service sector performance in major economies. The initial PMI readings provide an early look at business conditions and are often used to predict changes in the economy before official figures are released. This includes purchasing manager sentiment from the eurozone, UK, and US, which can signal future shifts in production or demand. If PMIs rise above or fall below 50, they indicate expansions or contractions. Small movements around this mark require careful observation, as they may lead to significant adjustments in rate expectations.Canada’s Inflation and Economic Outlook
In Canada, the inflation forecast remains relatively stable. Consumer prices are expected to rise slightly month-over-month but will still be below central bank targets year-over-year. With low price pressure, policy decisions may depend more on domestic growth and employment strength. If GDP shows persistent sluggishness or signs of household stress, policy adjustments could happen sooner. In Australia, a decrease in year-on-year inflation could argue for keeping rates steady, especially as underlying pressures show signs of less persistence. Previous months showed supply-side factors fading, and this week’s data will clarify whether that trend continues. Traders ready to adapt quickly may find opportunities if inflation data surprises on the downside. Meanwhile, Powell will make consecutive appearances in Congress, allowing for detailed discussions about economic conditions, risks, and policy direction. Though the Fed often uses formal language, changes in tone or pointed questions can shift market rate expectations swiftly. Traders typically adjust rate cut odds around these events—especially when there’s limited upcoming data—so remaining flexible through Wednesday is key. Later in the week, durable goods data and revised GDP figures will be released in the US, but much attention may be on aircraft order numbers, which can heavily influence the overall data. It’s important to prioritize non-transport categories. If core orders stagnate or decrease, it could signal hesitation from businesses in long-term investments, affecting growth sentiment. Japan’s inflation figures, particularly for Tokyo, will provide early indications. A slight decrease in the core CPI is expected as previous government efforts ease price pressures. Despite this, strong wage growth and a robust labor market should support spending, which may be reflected in upcoming retail data. If retail remains strong, it will support the case for delaying policy normalization, focusing more on sustainable domestic demand in light of global challenges. In the US, the core PCE price index is a crucial indicator for monetary policy, more so than CPI. The market expects stability this month. If income and spending meet expectations, we might see little immediate change in policy views. However, any increase in PCE—even a 0.2% rise—could influence market direction. Social security changes continue to enhance consumer purchasing power, and the Fed will watch how this impacts pricing pressure. Throughout the week, forward-looking data will be more significant than past revisions. Even small signs of softening in consumer spending, particularly in discretionary areas, could lead to a reevaluation of interest rate resilience. For those managing exposure, this week is best observed with attention to trends; the rate of change is more crucial than the current level. A careful approach to position sizing and a willingness to handle short periods of volatility may be more effective than high-stakes bets. Central bank reactions are finely balanced right now, allowing little room for poor timing. Create your live VT Markets account and start trading now.The dollar’s initial response seems limited despite being undervalued and oversold.
The US dollar has reacted little to recent strikes in Iran, even though it was previously undervalued. The market often punishes the dollar quickly but rewards it slowly. If oil prices stay high for a while, this could shift as more people seek the dollar for stability.
There are signs of possible disruptions in the Strait of Hormuz, which might raise oil prices and impact the dollar. Right now, Brent crude has climbed above $80 per barrel and is stabilizing around $78. If geopolitical concerns fade swiftly, the market may return to favor USD shorts due to bearish factors within the US.
Market Focus
Data is expected to play a small role this week. The key item on the US calendar is Friday’s core PCE figure, which is predicted to be 0.1%. The Federal Reserve is cautious, so this is unlikely to change rate expectations. Jerome Powell will be speaking in Congress, addressing these issues. Additionally, S&P Global PMIs are expected to drop, and consumer confidence will be watched for any changes above the 100.0 mark. We should closely monitor risk sentiment in energy markets. While the dollar has not reacted much to military activity, that doesn’t mean we should ignore the potential aftershocks. Notably, Brent crude’s price has found support above $78 per barrel, briefly approaching $80. This indicates that risk premiums may be forming quietly, although not rapidly yet. If threats at strategic locations like the Strait of Hormuz become more certain, oil prices could rise quickly, increasing demand for dollars as a safe haven. It’s not a straightforward cause-effect situation; trader actions depend on risk perceptions. The dollar’s behavior in these situations remains consistent. It still responds quickly to bad news but does not gain ground as fast when those worries lessen. It’s important to keep this in mind. If recent tensions ease without escalating, we could see renewed pressure on the dollar, especially from those holding negative views on the US economy.Key Events And Data
Looking at the upcoming calendar, we see a lack of meaningful data, which means we should pay extra attention to the smaller details. The main focus will likely be Friday’s PCE inflation figure. Estimates suggest a 0.1% month-on-month increase, which is a mild figure and unlikely to significantly change Federal Reserve expectations. Therefore, short-term swap pricing will probably remain stable. However, Chair Powell’s appearance before Congress could lead to some repositioning, even if he sticks to the Fed’s current messaging. Any acknowledgment of geopolitical risks or market weaknesses could have more influence than usual due to the lack of other data. Aside from that, S&P Global PMIs are expected to trend slightly downward. The impact on USD will depend on how investors see the link between slowing manufacturing and the Fed’s patience. We are also watching consumer confidence data; any dips below 100.0 might raise doubts about Q3 consumption trends. Our focus is more on how expectations shift around these numbers rather than on trading them directly. In summary, while scheduled events may not provide clear direction, positioning can change gradually. The interaction between energy prices, weaker indicators, and Powell’s language will be key in shaping market sentiment. Thus, we will prioritize tone and timing over the numbers alone. Create your live VT Markets account and start trading now.Rising USD/JPY reflects oil market concerns, not geopolitical tensions, surpassing the moving average
USD/JPY has increased nearly 1% to 147.38. This change is mainly due to worries about oil supply disruptions, not general geopolitical issues.
Japan depends significantly on energy imports from the Middle East, and any potential supply limits are impacting its economy. Rising oil prices are causing problems for Japan and are attracting the attention of traders.
Market reactions show that US interventions are considered limited, as indicated by a slight drop in equities, with S&P 500 futures down by 0.17%. The strength of the US dollar supports USD/JPY, but oil market worries are the main factor in this rise.
The EUR/USD is down 0.2% to 1.1500, and AUD/USD has dropped 0.6% to 0.6410. These shifts reflect the general currency trends that impact USD/JPY as European trading begins.
The rise of USD/JPY past the 100-day moving average of 146.78 has reduced bearish sentiment since February. This suggests a possible movement toward 148.00, with the May peak of 148.65 being a key technical level.
Traders are currently reacting to market sentiment and news developments.
In simpler terms, USD/JPY’s rise to 147.38 relates more to oil supply issues than to broader political unrest. The market recognizes Japan’s reliance on foreign energy sources, especially from unstable regions. Increasing oil prices adversely affect Japan’s economy, weakening local demand and slowing growth. This economic pressure often lowers the yen, leading to the rise in USD/JPY.
Climbing above the 100-day moving average signals a shift in market sentiment. Since this level held firm in previous downturns, buyers have gained momentum by breaking through it. As a result, they are pushing the rate toward levels not seen since May. The previous high of 148.65 is crucial because breaking it could indicate a longer-term trend of a stronger dollar.
Notably, both AUD/USD and EUR/USD are experiencing weakness, down by 0.6% and 0.2%, respectively. This suggests broader dollar strength is influencing them. However, equity indices like the S&P 500 futures have also dipped slightly by about 0.17%, indicating a cautious mood among investors. Instead of outright optimism or fear, there’s a more careful approach.
The market’s reactions are based on various risk factors rather than a single cause. The dollar benefits from cautious sentiment and resilience. Meanwhile, anything related to energy imports—be it currencies or stocks—is more unstable, with Japan being particularly affected.
Decision-makers prefer to use technical indicators alongside news. Their reactions are structured around known levels like the 100-day average, making targets like 148.00 and 148.65 significant psychological points where behavior could change.
It is essential to monitor cross-market signals—not just currencies but also commodities and indices. Presently, oil is a primary focus. Japan’s vulnerability regarding energy imports has clarified the reasoning behind weakening the yen. With that in mind, attention should also be on Brent or WTI futures. Any sudden spike could further strengthen the current trend.
In summary, short-term risks are apparent, and positioning in the market reflects this awareness. Movements are more calculated than speculative, with participants adjusting their strategies based on secondary factors. Each sign of supply shortage or diplomatic limitations tends to reinforce the same behavior—favoring the dollar, especially against more vulnerable Asian currencies.
Key events include Flash PMIs from Europe and the US, focusing on economic activity.
The European session will release Flash PMIs for France, Germany, the Eurozone, and the UK. These indicators will evaluate the current economic activity and inflation in these areas. Although geopolitical issues, like the situation between Israel and Iran, are being watched, they are not expected to impact trade much as long as the Strait of Hormuz stays open.
During the American session, the focus will shift to the Flash US PMIs, which aim to uncover economic trends and inflationary pressures. Most Federal Reserve officials, aside from Waller, are cautious about rate cuts, which might not happen until September. Decisions on rate cuts will rely on summer economic data.
Central Bank Speaker Schedule
The schedule for central bank speakers includes: – Fed’s Waller at 07:00 GMT – ECB’s Lagarde at 13:00 GMT – Fed’s Bowman at 14:00 GMT – Fed’s Goolsbee at 17:10 GMT – Fed’s Kugler at 18:30 GMT These speakers have varying levels of influence, from dovish to neutral, in their respective monetary institutions. The initial report shows that preliminary purchasing managers’ indexes (Flash PMIs) give a quick view of private sector performance. These figures measure the strength of manufacturing and services in key economies: France, Germany, the Euro area, and the UK. They help indicate consumer demand and corporate output while offering insights into future price behaviors for goods and services. In short, these numbers help traders gauge the current business climate and whether inflationary pressures are increasing or decreasing. Despite rising tensions in the Middle East, particularly between Israel and Iran, markets seem to be downplaying these risks for now. As long as oil flows through the Strait of Hormuz without interruptions, energy prices and inflation are likely to stay stable in the near term. However, any changes could significantly impact expectations. In the United States, attention is also on their Flash PMI releases. These figures will directly influence the rate cut debate. Most Federal Reserve officials are adopting a patient approach, preferring to wait for data over the coming months. Only Waller is leaning toward initiating cuts sooner. Until we see clearer signals—especially regarding inflation decreasing without harming growth—we don’t expect major changes in guidance. September seems like the earliest point for a reassessment.Implications For Market Participants
Today’s speaker lineup includes voices from both sides of the Atlantic. Waller starts the day, followed by Lagarde around midday, and then three Fed speakers — Bowman, Goolsbee, and Kugler — in the afternoon. Their varying perspectives, from dovish to neutral, will impact the significance of their comments. Even slight tone changes from usually cautious speakers can quickly influence futures pricing. For those involved in options and futures, this series of releases and speeches offers opportunities to adjust positions. Weak PMI data, especially from Germany or the US, might prompt new hedging or long volatility strategies, although reactions may be less pronounced in the UK unless the figures deviate significantly. Additionally, any unexpected updates from speakers should be responded to quickly—within the hour, not the next day. Market participants must be prepared to act decisively on surprising data. Delaying for confirmation can be costly, especially in short-term spreads that depend on differing expectations. We are focusing on setups that could widen the policy gap between the ECB and the Fed, especially if inflation decreases faster in the Euro area. However, we are also closely monitoring indications that the Fed might maintain a cautious stance longer than anticipated, which could support USD and impact EUR/USD volatility. This upcoming week will be active, so it’s crucial to stay alert. This is not the time for assumptions. Keep your trading terminals ready. Create your live VT Markets account and start trading now.Japanese Yen continues to decline as USD/JPY nears mid-147.00s during early European trading
The Japanese Yen (JPY) continues to drop at the start of the European session on Monday. This decline is influenced by expectations that the Bank of Japan (BoJ) will delay a rate hike until the first quarter of 2026. Additional worries stem from the potential economic impact of 25% US tariffs on Japanese cars and 24% on other imports, combined with a slight increase in the strength of the US Dollar (USD).
Although Japan’s National Consumer Price Index (CPI) remained above the BoJ’s 2% target in May and the PMI numbers were better than expected, the JPY hasn’t rallied. Rising tensions in the Middle East have also not made the JPY more attractive as a safe haven, so the USD/JPY pair is likely to keep rising.
