• USD/JPY up 0.7% as Ishiba's resignation triggers Japanese policy uncertainty

• Process to pick next leader may result in lengthy period of policy paralysis

• JPY undermined by fiscal concerns as fiscal dove Takaichi possible successor

• Perception that BOJ rate hike will be pushed into 2026 weighs on JPY

• Japan revises Q2 GDP higher on brisk consumer spending, news taken in stride

• Lower U.S. yields on sharply weaker-than-expected jobs report cap rally

• Weak data fuels expectations of a jumbo rate cut; U.S. CPI Thu now key

• Resistance 148.60, 148.80-85, 149.10-15, support 147.95-148.00, 147.40-50

• Asia range 147.74-148.56
JPY

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

• EUR/USD +0.6% from Fri 1.1649 low; faltering U.S. jobs growth firms Fed cut

• U.S. Aug non-farm payrolls +22k (poll +75k), unemployment rising to 4.3% y/y

• Fed likely to prioritise employment mandate over inflation at FOMC next week

• DE Jul industrial orders -2.9% m/m, marking a third consecutive decline

• EUR trading above 1.1667 55-DMA, needs break of 1.1760 to confirm rally

• U.S. Aug PPI data due Wed, Core CPI Thur (Reuters poll +0.3% m/m, +3.1% y/y)

• Range early Asia 1.1690-1.1717, support 1.1574, resistance 1.1760 1.1830
EUR Daily 55-DMA

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

• AUD/USD +0.6% from Fri 0.6515 low; tepid U.S. jobs growth locks in Fed cut

• U.S. Aug non-farm payrolls +22k (poll +75k), unemployment rising to 4.3% y/y

• Fed likely to prioritise employment mandate over inflation at FOMC next week

• AUD needs break above 0.6625 to restart 2025 rally, softening USD may assist

• U.S. Aug PPI data due Wed, Core CPI Thur (Reuters poll +0.3% m/m, +3.1% y/y)

• Range early Asia 0.6547-58, support 0.6415 0.6373, resistance 0.6625 0.66875
DXY Daily 55-DMA


AUD Daily 55-DMA & Support/Resistance

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

• USD net G10 short fell by $0.66bn in the Aug 27-Apr 2 IMM period; $IDX +0.05%

• Today's IMM data release mooted given the US payroll downside surprise

• Broad USD selling, ex-AUD, premature; next week data likely sees USD shorts increase

• Friday's US payroll miss lends support to recent dovish Fed leanings, weak USD

• EUR$ unched, specs -3.4k contracts now +120k; ECB-Fed rates converge boosts EUR

• $JPY +0.66%, specs -11.2k contracts now +73k; longs pared pre-NFP

• GBP$ -0.63%, specs -1.8k contracts now -33k; UK fiscal concerns , gilt yield rise weighs

• $CAD -0.38%, specs -4k contracts now -109k; dovish Fed view post J-Hole lifted CAD

• Today's soft Canada employment data lifted dovish BoC expectations, CAD lower

• The prevailing dovish Fed view lifting talk of 50bp Fed cut on Sept 17, USD negative

Majors w/IMM Performance Chart:


IMM Position table as of 9-5:


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

The dollar index dropped to a one-month low Friday as Treasury yields slid after the U.S. jobs report showed few workers were hired in August, fueling speculation that the Fed may need multiple rate cuts before year-end. Nonfarm payrolls increased by a paltry 22,000 jobs and the unemployment rate increased to a near four-year high of 4.3%.

Treasury yields fell to their lowest since early April following the data while oil prices sank to a three-month low.

Odds moved further in favor of three 25 basis point Fed cuts by year-end.

Focus now turns to debt auctions and U.S. inflation data next week, while China is set to report August trade and reserve balances on Monday. Google was fined €2.95 billion ($3.45 billion) by the EU on Friday for anti-competitive adtech practices — a move that may provoke President Donald Trump. In geopolitics, Trump said India and Russia seem "lost" to China after meeting with Xi Jinping, expressing frustration over Beijing’s push for a new world order. U.S. Commerce Secretary Howard Lutnick said that a new U.S.-Japan tariff deal grants President Trump full control over the allocation of $550 billion in Japanese investments in the U.S. Gold surged to a new record as Treasury yields retreated and the dollar fell. EUR/USD hit a six-week high of 1.1759 after the U.S. data before pulling back ahead of Monday's French confidence vote. A close above its upper 21-day Bollinger at 1.1729 and year-to-date high of 1.1830 is needed to encourage bulls.

GBP/USD rose though failed to break free from its orbit around 1.35 and its 55-day moving average. A potential moving average crossover could support a bullish case, provided gilt markets stay steady in a data-light week for the UK.

USD/JPY gapped down from 147.90, deepening its slide amid a tech sector pullback, but recovered to reclaim support at the 55-day moving average of 147.09. A break above the rising cloud top at 147.59 would support the bulls case in an otherwise rangebound market. Japan is set for a pivotal Monday, with July current account data, Q2 GDP figures, and a likely LDP leadership vote all on the agenda.

Treasury yields were down 8 to 10 basis points across the curve. The 2s-10s curve was up about 1 basis point at +57.8bp.

The S&P 500 slipped 0.45%.

WTI oil slumped 2.2% on U.S. demand concerns and as OPEC+ gets set to discuss potential new supply.

Gold rose 1.41%, setting a new record, while copper fell 0.40%.

Heading toward the close: EUR/USD +0.61%, USD/JPY -0.73%, GBP/USD +0.53%, AUD/USD +0.57%, DXY -0.63%, EUR/JPY -0.13%, GBP/JPY -0.19%, AUD/JPY -0.17%.(Editing by Burton Frierson Reporting by Robert Fullem)

• NY opened near 0.6540 after 0.6515 tradee overnight, rally then extended

• US yields , US$ fell sharply after the downbeat August payroll report

• USD/CNH fell to 7.1218, gold hit a new all-time high & stocks rallied

• AUD/USD hit a 1-1/2-month high of 0.6589 then pulled back a bit

• US$ selling abated & stocks turned lower; AUD/USDneared 0.6560, was up 0.59% late

• Techs lean bullish; RSIs rising, pair above 10-, 21- & 55-DMAs and the daily cloud
audusd


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

• $CAD firm into Europe close +0.12% at 1.3833; NorAm range 1.3838-1.3760

• Pair hit flash low after disappointing US jobs data; CA unemployment soft as well

• Canada yield dip keeps pace with UST yield slide post-NFP, weighs on CAD

• Canada's unemployment jumps to 7.1% in Aug, as tariffs curb business confidence

• Pre-data end to BoC cut cycle was expected, STIR futs price further cuts; See IRPR

• Commods mixed, holds no sway; oil -2.9%, copper flat, gold +1.21%

• $CAD res 1.3845 Thursday high, 1.3897 upper 21-d Bolli, 1.3925 Aug 22 trend high

• Supt 1.3800 psychological lvl, 1.3760 Fri post-NFP flash low, 1.3723 daily cloud top

CAD Chart:


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

Synopsis

Crédit Agricole outlines four scenarios for the 8 September French parliamentary vote of confidence, assigning probabilities to each and highlighting risks for EUR/USD. Their probability-weighted analysis points to EUR/USD at 1.157, suggesting that markets may be underestimating the downside risks from French political uncertainty.

Key Points

• Scenarios and Probabilities

  1. Bayrou wins confidence vote – 10% probability.

  2. Bayrou loses; caretaker PM appointed – 40% probability.

  3. Bayrou loses; National Assembly dissolved → election → hung parliament – 40% probability.

  4. Bayrou loses; National Assembly dissolved → election → RN victory – 10% probability.

• FX Implications

  • Most Negative: A general election leading to a hung parliament or RN win would cause significant political and fiscal risks, dragging EUR lower.

  • Neutral to Slightly Negative: A caretaker PM would leave EUR struggling to maintain gains.

  • Limited Positives: A Bayrou win would not be particularly bullish for the EUR given underlying fiscal risks.

• Market Complacency

  • The probability-weighted EUR/USD outcome of 1.157 implies downside risk relative to current levels.

  • Investors may be underestimating how much French political instability can weigh on EUR sentiment.

• Next Catalysts

  • Fitch’s credit rating review on 12 September looms large, adding another potential risk event for EUR.

Conclusion

Crédit Agricole warns that the 8 September French confidence vote is a pivotal event for the euro, with high odds of scenarios that could amplify political and fiscal uncertainty. Their analysis suggests EUR/USD risks are tilted lower, and markets may not be pricing in the full extent of potential volatility.

• Cable holds above 1.3500 after vaulting level on soft U.S. NFP data

• NFP miss spurs dovish shift in Fed expectations, to detriment of USD

• Market currently sees 10% chance of 50 bps Fed cut on Sept 17

• Long-dated gilt yields fall to three-week low after August NFP miss

• GBP/USD offers likely near 1.3550 (Monday's two-week high) and 1.36

• Ladbrokes says Reform UK odds-on to win most seats at next general election

GBPUSD

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

Synopsis

Bank of America notes that although the USD has weakened significantly this year, it remains modestly overvalued on broad valuation metrics. However, the speed of its approach toward fair value—driven by unconventional forces—suggests misvaluation will be less central to the USD outlook going forward.

Key Points

• Persistent Misvaluations: Historically, currency misvaluations can last for years, but the USD has moved closer to fair value unusually quickly.

• Unconventional Drivers: The adjustment has been influenced not by traditional cyclical factors, but by German fiscal policy, US trade war dynamics, and the erosion of US institutional credibility.

• Baseline Outlook:

  • BofA’s core G10 FX view centers on stagflationary risks, Fed rate cuts, and ongoing concerns over Fed independence.

  • These themes remain the main bearish drivers for the USD into next year.

• Shifting Role of Valuation: As the USD’s overvaluation diminishes, valuation will matter less in the broader FX picture, with policy and political risks likely to dominate.

Conclusion

BofA sees the USD still modestly overvalued, but the drivers of further weakness are shifting away from valuation and more toward structural issues—stagflationary risks, Fed policy easing, and institutional credibility. The medium-term picture still points to gradual USD depreciation across G10.

Synopsis

CIBC’s assessment of today’s US and Canadian August jobs reports highlights soft labor market conditions on both sides of the border, reinforcing the likelihood of September interest rate cuts by the Fed and BoC.

Key Points

United States

• Payrolls: Just +22K jobs (vs. 75K expected) with -21K in net revisions, showing further weakness.

• Sector detail: Goods sector shed -25K jobs, led by trade-exposed manufacturing; cyclically sensitive services were also weak.

• Labor market: Jobless rate rose to 4.3%, though participation edged up to 62.3%.

• Wages: Average hourly earnings rose +0.3%, but hours worked declined.

• Macro context: Job growth is slowing structurally and cyclically, though the economy overall remains resilient. CIBC expects the Fed to cut in September, given rising political risks to monetary policy.

Canada

• Employment: Sharp -66K decline, worse than July’s -41K and well below consensus for a small gain.

• Composition: Losses concentrated in part-time (-60K), but full-time also fell modestly.

• Sectors: Manufacturing, transport/warehousing, and business services all showed marked declines.

• Demographics: Prime-age (25–54) workers drove the weakness; youth employment stable.

• Unemployment: Rose to 7.1% (from 6.9%) despite lower participation.

• Wages: Hourly wage growth for permanent employees ticked up to 3.6%, likely compositional given broader labor slack.

• Policy outlook: CIBC expects the BoC to cut 25bp in September, with another cut in Q4.

Conclusion

Both the Fed and BoC face weakening labor markets, though the softness in Canada is more acute. CIBC expects synchronized easing cycles to resume in September, with the Fed’s move driven by downside labor risks and the BoC’s by mounting job losses.

• AUD/.UD dipped down to 0.6515 in Asia, buyers emerged, 0.6548 hit in Europe

• NY opened near 0.6545, pair traded up +0.39% in early NY action

• Lower US yields helped drive broad-based US$ selling

• Gold , equity gains & USD/CNH drop reinforced US$ selling theme

• AUD/USD rallied above the daily cloud top and the 10-, 21- & 55-DMAs

• Rising daily RSI, consolidation on monthly chart reinforce bullish tech signals

• US Aug. payroll report may determine if AUD/USD bulls can keep control
audusd


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

Sept 5 (Reuters) - The cash hedging of soon-to-expire FX option strikes may bolster any nearby support and resistance levels, and potentially have a magnetic effect on FX price action towards each day's 10 a.m. New York (1400 GMT) cut expiry. It is therefore advantageous to know in advance where the larger strikes lie.

Day & Date Strike(s) Notional (EUR)

Monday Sep 8

1.1600 2.1 billion

1.1620–30 1.2 billion

1.1650 437 million

1.1700 1.6 billion

1.1750 1.6 billion

1.1800 1.1 billion

Tuesday Sep 9

1.1650 801 million

1.1700–05 1 billion

1.1750–60 1.5 billion

Wednesday Sep

10

1.1600 1.1 billion

1.1650 1.5 billion

1.1675–80 1.2 billion

Thursday Sep

11

1.1635–45 3.8 billion

1.1650–55 1.2 billion

1.1675–80 1 billion

1.1700 875 million

1.1740–50 1.5 billion

1.1800 1.1 billion

1.1825 1.4 billion

Friday Sep 12

1.1550 2.3 billion

1.1600 2.3 billion

1.1650 1.1 billion

1.1670–75 1.5 billion

1.1700 2.6 billion

1.1725–35 2.2 billion

1.1800 1.4 billion

Continued option trading can increase the size of current strikes and add new ones, so be sure to check the daily FX option expiry updates that are posted around 7 a.m. London time on [FXBUZ].
EUR/USD FX option strikes expiring September 8-12

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

• Euro finds a floor at 1.16 - limiting pullbacks

• Risks still favour the bulls, keeping 1.1830 in view

• High bar for NFP to lean against a Fed Sept cut should cap USD rally risk

• Any USD bid on a modest NFP beat would likely be short-lived and faded

• Therefore, risk-reward continues to point to USD selling

• NFP revision is likely just as or if not more important than the headline

• Support sits at 1.1573/1.1600, 1.1528 (100DMA). Resistance: 1.17, 1.1830
EURUSD daily chart

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

• Lackluster US job growth anticipated in Aug; focus on revisions

• USD/JPY has seen a 148.08-148.51 range, on Friday, EBS data shows

• It has the potential to rise above 150 eventually

• A break above Wednesday's 149.13 peak would be a very bullish sign

• Only a close under the cloud, that spans 146.51-147.59, would be negative

• The euro tends to strengthen against the yen in Sept

• Japan's Ishiba could face leadership challenge on Monday

Daily Chart:

• AUD/USD climbs to 0.6544 ahead of U.S. employment report at 1230 GMT

• 0.6544 is highest level since 0.6502 Thursday low (0.6550 was Thursday top)

• U.S. August NFP forecast at 75k, jobless rate forecast at 4.3%

• Soft U.S. jobs data might weigh on USD, and inflate AUD/USD towards 0.66

• AUD/USD was last at 0.66 on July 24 (0.6625 was eight-month high that day)

• CFTC data at 1930 GMT to show if net AUD short rose again in week to Sept 2

AUDUSD

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

• Key above - Sep high 1.1737, and 2025 high which traded July 1 at 1.1830

• Major levels below - Aug 27 low at 1.1574 and Aug 1 low at 1.1392

• Sep high at 1.1737 is also a 78.6% retracement of the 1.1830-1.1392 drop

• A rise to or beyond current 2025 peak likely if 1.1737 exceeded

• Drop below 1.1608 38.2% Aug rally would be a worry for those long euros

• Under 1.1608 likely to result in a deeper correction toward 1.1537 or 1.1526

• Key information for FX traders for Friday payrolls data

• Few situations are more bullish than that for EUR/USD this year

• *

EURUSD


EURUSD

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

• GBP/USD nudges up to 1.3467 (three-day high) after UK retail sales data

• July retail sales up 0.6% MM vs 0.2% f/c; June revised down by 0.6% MM

• 1.3464 was pre-data release high (1.3417-1.3459 was Thursday range)

• U.S. jobs report due at 1230 GMT: August NFP f/c 75k; jobless rate f/c 4.3%

• Soft U.S. jobs data might weigh on dollar, and lift cable to/through 1.3500

• Fed nominee Miran tells Senate panel he's "not at all" Trump's puppet

GBPUSD

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

• USD/JPY -0.2% as U.S. yields decline ahead of key jobs data

• U.S. 2-year & 10-year yields hit lowest since May 1 on Fed Sep rate cut bets

• USD undermined by rising signs of weakness in U.S. labour market

• Repeated failure to close above 200-day MA at 148.84 encourages bears

• Japan's real wages, consumer spending climb, may boost Oct BOJ hike bets

• Resistance 148.80-85, 149.10-15; support 147.65-70, 147.30.35, 146.90

• Asia range 148.08-148.51
JPY:

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

• GBP/USD +0.1% in Asia as U.S. yields hit multi-month lows ahead of jobs data

• Supported by rising signs of weakness in U.S. labour market

• 2-year and 10-year yields hit lowest since May 1 on Fed Sep rate cut bets

• UK bond market frenzy ebbs as fiscal concerns ease, underpins GBP

• UK firms report biggest drop in employment since 2021 in dilemma for BoE

• Resistance 1.3460-65, 1.3495-00, support 1.3400-05. 1.3335-40

• Asia range 1.3436-55
The UK's current account deficit has narrowed significantly since 2016:

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

• AUD/USD +0.2% from Fri 0.6515 low as traders set for jobs data later Fri

• U.S. non-farm payrolls 1230 GMT (poll +75k), a crucial USD lead pre FOMC

• Jobs red flags include Thur's initial jobless claims 237k (poll 230k)

• Fed President Williams says facing balancing act between tariffs/FFR setting

• AUD approaching upper hourly Bollinger band, may run out of steam short-term

• Range early Asia 0.6515-28, support 0.6415 0.6373, resistance 0.6625 0.66875
AUD Hourly Bollinger Study

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

• USD/JPY drops 0.15% in Asia as Treasury yields drop ahead of U.S. jobs data

• Undermined by rising signs of weakness in U.S. labour market

• 2-year and 10-year yields hit lowest since May 1 on Fed Sep rate cut bets

• Repeated failure to close above 148.84, 200-day MA dampens bullish sentiment

• Japan's real wages, consumer spending climb but inflation challenges persist

• Trump signs order to bring lower Japanese auto tariffs into effect

• Resistance 148.80-85, 149.10-15, 149.50-55; support 147.80, 147.50-60

• Asia range 148.13-148.51
Seizing Up:

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

• USD/JPY likely to consolidate in Asia after closing 0.25% higher on Thursday

• Buoyed by demand near 148.00, risk of impending LDP leadership change

• Upside limited as U.S. yields decline; 2-yr hits 4-mth low, 10-yr -5 bps

• Fed Sep rate cut fully priced on rising signs of weakness in labour market

• Japan July real wages turn positive for first time in 7 months

• Japan July household spending +1.4% year/year; data taken in stride

• Focus firmly on key U.S. monthly jobs report due later Friday

• Resistance 148.80-85, 149.10-15, 149.50-55; support 147.80, 147.50-60

• Thursday range 147.795-148.775; Asia range 148.31-148.51
Currency moves against the US dollar:

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

• AUD/USD sits -0.3% wtd as USD firms slightly despite employment red flags

• U.S. initial jobless claims 237k (poll 230k), ADP employment 54k (poll 65K)

• U.S. non-farm payrolls due Fri (poll +75k) will drive USD direction pre FOMC

• Fed President Williams says facing balancing act between tariffs/FFR setting

• AUD near 0.6518 55-DMA, next move likely to be dominated by U.S. factors

• Overnight range 0.65015-28, support 0.6415 0.6373, resistance 0.6625 0.66875
AUD Daily 55-DMA & Support/Resistance

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