Synopsis:

ANZ notes that while USD/JPY has dropped over 2% on the back of weak US payrolls, the pair may struggle to extend losses without fresh catalysts. Domestic economic risks and policy uncertainty, combined with sensitivity to upcoming US CPI data, leave the JPY vulnerable in the near term.

Key Points:

Post-NFP Drop May Stall Without New Drivers:
The sharp decline in USD/JPY after July’s NFP release has exhausted some bearish momentum. ANZ sees the need for fresh catalysts to push the pair lower.

Mixed Domestic Picture:
Japan’s GDP release is in focus, with weaker export data posing a downside risk. While household spending rose strongly in May (+4.7% y/y), this may be largely inflation-driven. Wage growth has stalled, and real wages remain negative.

BoJ Likely to Stay Cautious:
Soft export performance and sluggish real wage growth could keep the BoJ from taking a more hawkish stance, limiting scope for JPY gains.

Policy Uncertainty Adding Headwinds:
Risks from US trade policy and domestic political developments are expected to weigh on sentiment toward the JPY.

US CPI as a Key Risk Event:
Any rebound in US inflation this week could lift US yields and strengthen the USD, leaving the JPY exposed to renewed selling pressure.

Conclusion:

ANZ sees the JPY at risk of near-term weakness if US CPI surprises to the upside. Without a fresh domestic catalyst or stronger BoJ policy signals, USD/JPY may struggle to sustain recent declines.

Despite a five-day rally, traders remain cautious about turning bullish on the British pound.

Weekly IMM futures data shows an increase in short positions, yet rising daily open interest suggests new long positions have been added since August 5, when GBP/USD hovered near 1.33. These longs likely expanded after the Bank of England’s hawkish rate cut on Thursday, which lowered rates to 4% amid a divided Monetary Policy Committee.

While inflation concerns argue for a slow easing of BOE policy, a weakening labor market could prompt further rate cuts. Market pricing reflects this uncertainty, with IRP data showing an 80% chance of another 25 bp cut by the end of 2025 and only one cut projected for 2026. Economists expect the UK unemployment rate, due Tuesday, will remain at 4.7% through June, but a CIPD survey reveals hiring intentions have dropped to pandemic-era lows, and wage growth is slowing.

Across the Atlantic, the Fed faces persistent inflation. July’s CPI is expected to rise to 2.8% annually, above the 2% target, and could accelerate further due to new tariffs, especially on Chinese imports.

Given these dynamics, pound bulls should tread carefully. Option markets reflect caution, with pound puts slightly favored. A close above 1.36 could signal bullish momentum, while a drop below 1.33 would be bearish.
GBP


GBP


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

Synopsis:

Morgan Stanley expects July core CPI to rise 0.32% m/m (3.04% y/y), up from 0.23% in June, with tariff-related price pressures in core goods driving the acceleration. While they see most tariff effects concentrated over the summer, risks point to a more gradual and persistent inflation pickup into year-end.

Key Points:

Tariffs Driving Core Goods Inflation:
Categories most exposed to tariffs are showing clearer signs of price pass-through, pushing core CPI higher in July.

Base Case – Summer Concentration of Tariff Effects:
Morgan Stanley expects the bulk of tariff-related price pressures to be felt in coming months, particularly in Q3, before easing.

Risk of More Persistent Upswing:
While the base case assumes a temporary boost, Morgan Stanley warns that monthly CPI prints could remain elevated through year-end if pass-through is slower or more sustained than expected.

Services Inflation Still Subdued:
Housing inflation is holding steady, while services excluding rents remain soft with mixed underlying trends, limiting the broader acceleration in core inflation.

Conclusion:

Morgan Stanley forecasts a July core CPI print of 0.32% m/m, led by tariff-driven goods inflation. While they see this as a summer-focused effect, risks lean toward a more persistent uptick in inflation into late 2025, which could complicate the Fed’s easing path.

Synopsis:

Goldman Sachs sees attractive risk-reward in maintaining USD short positions into the September FOMC and beyond, citing mounting evidence of a slowing US economy, the negative growth impact of tariffs, and the likelihood of rate differentials moving further against the Dollar.

Key Points:

Labor Market Weakness Reinforces Slowdown View:
Last week’s jobs data supports Goldman’s view that US growth is near stall speed, with cyclical weakness likely to feed on itself. They see markets as underestimating the depth of the slowdown.

Inflation Report Could Be a Catalyst:
Goldman forecasts core CPI at 0.33% m/m next week, a print they believe would not constrain the Fed if labor market deterioration continues. Such a reading could shift focus toward downside risks and evolving Fed policy guidance ahead of Jackson Hole.

Tariffs Seen as a USD Headwind:
Goldman expects US firms and households to absorb most of the cost from recent tariff hikes, dampening domestic activity and eroding USD support. They disagree with narratives emphasizing bilateral trade deal benefits.

Rate Differentials Likely to Turn More Negative:
With the Fed on a path toward easing and US data softening, Goldman expects interest rate spreads to move further against the Dollar. They also see the USD underperforming its typical correlation with those shifts.

Conclusion:

Goldman Sachs maintains a bearish USD stance, viewing slowing growth, tariff drag, and narrowing rate differentials as a potent mix for further weakness. They see the September FOMC as a key waypoint for the trade, with next week’s CPI data potentially accelerating the move.

• AUD/USD traded a tight 0.6515-0.6529 range overnight, pair down -0.07% early NY

• Balanced risks and looming U.S. inflation data helped side line investors

• Softer US yields , equity gains helped limit the downside

• USD/CNH gains, gold & copper drops helped to limit the upside

• Techs lean bullish; consolidation in place on daily, monthly charts & monthly RSI rising

• AUD/USD hold above the daily cloud, slew of daily MAs reinforce the bullish signals

• RBA policy decision a risk tonight; investors await US July CPI data risk in NY Tuesday
audusd


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

• U.S.-listed shares of gold miners fall premarket, tracking a dip in bullion prices [GOL/]

• Spot gold down 1.1% at $3,362.21/ounce, after hitting its highest since July 23 on Friday

• Investors await White House clarity on potential country-specific tariffs on bullion bars, U.S. inflation data for Fed rate path clues

• Top miners Newmont and Barrick Mining ,

down nearly 1.5% each

• South African miners Gold Fields and AngloGold Ashanti down about 2%, Harmony Gold and Sibanye Stillwater fall nearly 1.5%

• Canadian miners Agnico Eagle Mines , down 0.8% and Kinross Gold , dips 1.5%

(Reporting by Katha Kalia in Bengaluru)

• The majority of speculators follow techs over any other influence

• EUR/USD which has surged, holding toward peak of this year's rise - bullish

• Overbought situation that unfolded June/July has been alleviated

• Drop to 1.1392 met 1.1427 target for minor correction 2025 rise

• Potential buy signal should 20-MMA rises above 55-MMA

• On closing bases 100-MMA at 1.1232 is likely pivot for sentiment

• EUR/USD going nowhere fast and that's an issue

•
EURUSD

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

• EUR/USD trading sideways since June - mainly between 1.14-1.18

• Volatility has sunk while traders still hold a lot of bullish bets

• There is a sizeable int/rate gap between US/EZ that favours the dollar

• Lessening chance of bigger movement may encourage traders to book profits

• Rising inflation in U.S. is a problem for those short dollars

•
EUR/USD, option vol, forward swap and betting

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

• AUD/USD shackled in middle of Oct-July 0.6973-0.5910 drop recovery since May

• 0.61.8% Fibo retrace of that drop 0.6548 regained, but not 0.76.4% at 0.6699

• Recent high-lows 0.6625-0.6419. 0.6500 is familiar axis since May

• Tight 0.6515-28 range on Monday - 21 and 55dma converge around 0.6512

• Option implied volatility at l-term low, reflects broad lack of realised vol

• But overnight options not complacent about RBA risk Tues (US CPI in mix too)

• Dealers expect dip buyers to keep limiting setbacks if RBA not too dovish
AUD=D3

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

• GBP/USD recovers 50% of the July-Aug drop from 1.3787 to 1.3145

• Peaks 1.3476 Monday, 50-dma 1.3503 next resistance, 21-dma 1.3398 support

• FX Markets remain in midst of summer lull and within familiar ranges

• Low FX option implied volatility reflects the lack of realised volatility

• Option risk reversals show GBP/USD directional bias from downside to neutral

• Data may excite - UK Jobs, US CPI Tues, UK GDP and ind production Thursday
GBP=D3


GBP/USD option risk reversals


GBP USD option implied volatility

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

• Shares of Many Peaks Miner soars as much as 22.9% to hit record high of A$0.885

• Last up 17%

• Stock set for four sessions of consecutive gains

• Gold-copper miner reports high-grade gold intercepts at Ferké Gold Project in Côte d'Ivoire

• More than 900,00 shares traded, 3.2x 30-day avg

• YTD, stock up 340%

(Reporting by Ananya Verma in Bengaluru)

• +0.05% at the top of a 1.3440-1.3461 range - bid on the Tokyo holiday

• British employers report weaker hiring and slower pay growth in July

• Uncertainty about jobs increases the impact of tomorrow's unemployment rate

• There is no UK data scheduled in London - the USD and risk appetite lead GBP

• Charts - positive momentum studies, 5, 10, & 21-DMAs base, or rise

• 21-day Bollinger bands contract - daily studies show a modest positive bias

• 1.3464, 0.5% of the July/Aug fall, then 1.3540 0.618% are first resistance

• 1.3397/1.340- 5 & 21 DMAs then Thursday's 1.3346 low are initial support
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• Slipped 0.1% in early Asia, with Japan celebrating the Mountain Day holiday

• The USD/risk appetite will likely lead USD/JPY into Friday's Japanese GDP

• U.S. tariff uncertainty will continue as the real impact of the deal emerges

• Technically, the USD/JPY was on hold last week in a 146.62/148.07 range

• USD/JPY trades around the flat 147.57 Kijun line, above the daily cloud

• Mixed 5, 10 & 21-day moving averages, horizontal 21-day Bollinger bands

• No strong bias - 146.51, 0.5% May/August rise is initial strong support

• Last week's 148.07 high, then the 150.91 August top are first resistance
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• AUD/USD sits +5.5% ytd with RBA meeting & critical U.S. CPI looming large

• Pundits expect 25 bps easing from RBA monetary policy meeting 0430 GMT Tue

• U.S. Jul core CPI also due Tue, Reuters poll: +0.3% m/m, +3.0% y/y

• Pair well above 0.6387 200-DMA & trending up, next target 2025 0.6625 high

• Trump's Fed appointments adding to dovish Fed sentiment, weighing on USD

• Range early Asia 0.6515-215, support 0.6420 0.6373, resistance 0.6625 0.6687
AUD Daily 200-DMA & DXY Daily 55-DMA

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

• +0.05% after closing -0.2% with the U.S. dollar +0.2% with higher UST yields

• Zelenskiy wins EU, NATO backing as he seeks a place at Trump-Putin talks

• US VP Vance says any Ukraine peace deal is unlikely to satisfy either side

• There is no first-tier EU or US data today, so range trading looks likely

• Charts - neutral daily momentum studies - 21-day Bollinger bands contract

• 5, 10 & 21-day moving averages conflict - daily signals show a neutral setup

• Resistance starts at the July 1.1789 range top, then 1.1830 2025 high

• Last week's 1.1528 low, then last Friday's 1.1392 base, are first support

• 1.16001.157 BLN, 1.1650 851 mln and 1.1690/00 2.685 BLN close Aug 11 strikes
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• USD/JPY starts the week on a cautious note after closing 0.4% higher Friday

• Upside limited as weakening U.S. economic data raises rate cut expectations

• U.S. CPI Tue, key for Fed expectations; Bowman sees 3 rate cuts this year

• Fed now faces risks to both its inflation and jobs goals; Fed's Musalem

• Trump policy or tariff news, Trump-Putin meeting Friday key this week

• Japanese markets closed for a holiday Mon; Friday range 146.73-147.90

• Resistance 148.10-20, support 147.20, 146.70-75
JPY:

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

• AUD/USD steady early Mon in subdued trade, focus moves to RBA rate decision

• RBA monetary policy meeting outcome 0430 GMT Tue; markets expect 25 bps cut

• Pair holding above 0.6511 55-DMA, needs momentum to target 2025 0.6625 high

• Trump's Fed appointments adding to dovish Fed sentiment, weighing on USD

• Critical U.S. Jul core CPI due Tue, Reuters poll: +0.3% m/m, +3.0% y/y

• Overnight range Fri 0.65145-35, support 0.6420 0.6373, resistance 0.6625
AUD Daily 55-DMA

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

• NY opened near 1.1635 after EUR/USD fell 1.1678-1.1630 on EBS due to U$ buying

• US buying abated for the most part & gold rallied off its session low

• EUR/USD rallied toward 1.1670, pair sat near 1.1661 late, down only -0.04%

• EUR/JPY rally above 172.20 & equity gains also helped to lift EUR/USD towards flat

• Techs lean bullish; monthly RSI rising, pair above daily cloud & slew of daily MAs

• Daily, monthly charts show EUR/UDS consolidating gains, adds to bullish signals
eurusd


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

• NY opened near 0.6525 after AUD/USD traded 0.6513-0.6535 overnight

• Pair dipped below 0.6515 early then rallied above 0.6525 into Europe's close

• AUD/USD pulled back a bit and sat near 0.6525 in Ny's afternoon, traded up +0.02%

• US yield & USD/CNH gains helped to limit AUD/USD's topside

• AUD/JPY rally, equity gains & gold bounce off the low limited the downside

• Techs lean bullish; daily, monthly charts show AUD/USD is in consolidation phases

• Rising monthly RSI, AUD/USD's hold above daily cloud, slew of DMAs reinfroce bull signs
audusd


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

• GBP/USD flat during U.S. session at 1.3445; range 1.3418/54

• Pair holds bulk of post-BoE rally; softer USD undertone persists

• Little resistance until 1.3503 (55DMA), 1.3585 (Jul 23/24 highs)

• Bulls resilient for now, but downside GBP risks remain

• Support at 1.3375 (BoE reaction level), break would open door to 1.33

• UK jobs data (Aug 12), UK GDP (Aug 14), U.S CPI (Aug 12)
GBPUSD daily chart

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

Synopsis:

Credit Agricole’s FAST FX model shows a rise in USD/JPY’s short-term fair value from 144.51 to 145.51 this week, driven primarily by gains in Japanese equities and a slight rebound in rate differentials. However, despite this uptick, the pair is now trading above fair value and would be significantly overvalued near 150.

Key Points:

Fair Value Revision Higher:
USD/JPY’s short-term fair value increased by 100 pips to 145.51 in preliminary estimates, with the final figure due at the New York close. The move reflects shifts in key macro drivers.

Drivers of the Fair Value Move:
A rally in the Nikkei provided the largest boost to USD/JPY fair value, outweighing the marginal increase in US-Japan rate spreads. Lower energy prices exerted a mild drag on the fair value estimate.

Rates Spread Edge Higher Despite Soft Data:
Even with weaker US economic data and the dovish implications of Miran’s Fed nomination, the short-term rate differential ticked up slightly, helping support USD/JPY.

Valuation Signals Emerging Overstretch:
At current levels, USD/JPY is seen as modestly overvalued. A further rally back toward 150 would place the pair in clearly overvalued territory based on Credit Agricole’s model.

Conclusion:

Credit Agricole notes that while fundamentals have pushed USD/JPY’s fair value modestly higher, the spot rate is now exceeding that estimate. The pair’s upside appears stretched, and a return toward 150 would represent a significant dislocation from short-term fair value.

(Updates)

• Shares of copper miners rise, tracking prices of the red metal

• Benchmark three-month copper on the London Metal Exchange up 0.2% at $9,700 a metric ton

• Copper prices crept higher for a third consecutive session, bolstered by hopes of U.S. interest rate cuts after a central bank appointment and upbeat economic data in China

• U.S. President Donald Trump on Thursday announced his pick to fill a vacant seat at the Federal Reserve, boosting hopes of interest rate cuts and weakening the dollar [FRX/]

• A softer dollar makes commodities priced in the U.S. currency less expensive for buyers using other currencies

• U.S.-listed shares of global mining giants Rio Tinto

up 1.6% and BHP Group up 1.4%

• Copper miners Southern Copper up ~3% and Freeport-McMoRan up 2.7%

• Canadian miners Hudbay Minerals up ~3%, Ero Copper up 1.8% and Teck Resources up 1.3%

(Reporting by Pooja Menon in Bengaluru)

Synopsis:

MUFG interprets the Bank of England’s August rate cut to 4.00% as a hawkish outcome, marked by a deeply divided Monetary Policy Committee and a deteriorating macro backdrop. While the policy direction remains toward easing, the path forward is clouded by sticky inflation, muted growth, and political uncertainty.

Key Points:

Narrow Vote Highlights MPC Division:
The 5-4 vote split underscores the fragile consensus within the BoE. Hawkish members were bolstered by concerns over upside risks to inflation expectations, particularly from energy and food.

Stagflation Signals Mounting:
Updated BoE projections revealed a troubling mix of higher inflation and weak growth—a stagflationary setup that complicates the easing narrative and explains the internal policy discord.

Direction Is Still Lower, but Pace Uncertain:
MUFG maintains a dovish bias on UK rates but sees the timeline for further cuts as increasingly data-dependent. Labour market slack and subdued growth will be key to unlocking another cut, likely in November.

Terminal Rate Forecast Unchanged:
MUFG continues to expect the Bank Rate to fall to 3.25% in 2025, though recent developments suggest a more gradual easing path than previously anticipated.

Conclusion:

MUFG sees the BoE’s August meeting as a hawkish cut within a difficult macro environment. Stagflation risks, policy division, and fiscal uncertainty mean rate cuts are still likely—but the pace will be slower and more cautious than markets had hoped.

• GBP/USD has traded a 34 pip range thus far Friday; 1.3418-1.3452

• 1.3452 is two-week high (1.3143 was 12-week low on Aug 1, pre-NFP data)

• Cable was sub-1.34 before BoE's hawkish rate cut boosted pound on Thursday

• BoE's Pill (hawk) sees risks that could slow pace of rate cuts

• UK jobs, Q2 GDP data due next week. UK July inflation data due August 20

• BoE sees UK CPI, which hit 3.6% YY in June, peaking at 4% in September

GBPUSD

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