BNY’s Bob Savage notes that the Japanese Yen is in focus as FX markets react to geopolitical de-escalation and shifting risk sentiment. The reopening of the Strait of Hormuz has supported risk assets, but investors remain attentive to policy divergence involving JPY, KRW and USD.

The Canadian Dollar (CAD) is trading without a clear bias against the US Dollar (USD) on Monday.

MUFG’s Lee Hardman observes that the Japanese Yen has not benefited from lower energy prices, with USD/JPY still above 160.00 ahead of the BoJ meeting.

National Bank of Canada (NBC) discusses USD/CAD, noting the pair has been consolidating and may remain range-bound. The bank highlights that recent moves reflect shifting expectations for Federal Reserve and Bank of Canada policy.

The Australian Dollar (AUD) trims previous gains against the US Dollar (USD) on Monday, as markets ponder the peace agreement between the US and Iran, ahead of a central bank-busy week.

Rabobank’s FX Strategy team at RaboResearch Global Economics & Markets discusses how the Dollar initially benefited from safe haven flows during the Iran war, but has since softened as a ceasefire memorandum eased market tensions and tempered Fed hike expectations.

The Euro (EUR) maintains its positive tone against the US Dollar (USD) on Monday, with the EUR/USD pair trading near 10-day highs above 1.1600.

The Japanese Yen (JPY) trades lower against its major currency peers during the European trading session on Monday, while the USD/JPY pair is marginally lower at around 160.15 after recovering its early losses.

AUD/USD trades around 0.7070 at the time of writing on Monday, up 0.35% on the day, benefiting from renewed risk appetite after the United States (US) and Iran announced a framework agreement aimed at ending their conflict.

Brown Brothers Harriman (BBH) expects the Riksbank to keep its policy rate at 1.75% for a sixth consecutive meeting and to lean against market pricing for a 25 bps hike by year-end.

Societe Generale highlights USD/JPY trading near 160, with dips bought despite lower Oil and expectations of a 25 bp BoJ hike.

The Eurozone industrial sector activity rises at a moderate pace of 0.1% in April, slower than 0.3% estimates, according to data published by Eurostat. March’s Industrial Production data was revised higher to 0.4% from 0.2%.

Societe Generale reports EUR/USD trading between 1.1569 and 1.1622 overnight, with the Euro bid above the 1.16 handle on the US–Iran MoU and lower Oil prices.

Eurozone Trade Balance s.a. dipped from previous €3.5B to €1.3B in April

Eurozone Trade Balance n.s.a. came in at €-1B below forecasts (€7.8B) in April

Eurozone Industrial Production w.d.a. (YoY) climbed from previous -2.1% to 0.3% in April

Eurozone Industrial Production s.a. (MoM) came in at 0.1%, below expectations (0.3%) in April

USD/CHF depreciates nearly 0.5%, trading around 0.7930 during the European hours on Monday. The technical analysis of the daily chart indicates the pair is remaining within the ascending channel pattern, signaling an ongoing bullish bias.

The Euro (EUR) shows a positive stance against the British Pound (GBP) on Monday, with bulls pushing toward one-week highs in the 0.8645 area.

ING’s Chris Turner highlights several risks for the Pound this week, centred on the Bank of England meeting and a key Labour by-election.

The Euro (EUR) outperforms its major currency peers during the European trading session on Monday, trading 0.26% higher to near 185.85 against the Japanese Yen (JPY).

Brown Brothers Harriman expects the Bank of Japan to resume tightening with a 25 bps hike to 1.00%, but sees limited scope for a sustained Japanese Yen rally.

The British Pound (GBP) has drawn support from the US Dollar’s (USD) weakness, amid a brighter market mood on Monday, to hit a fresh 10-day high at 1.3460. The pair, however, remains trapped within the trading range from the last four weeks, as investors' focus shifts to monetary policy.

XAG/USD extends its gains for the third consecutive day, trading around $70.30 per troy ounce during the Asian hours on Monday. The technical analysis of the daily chart shows that the spot price is breaking above the falling wedge pattern, suggesting a potential bullish reversal.

Chris Turner at ING says the Euro’s focus this week is on European Central Bank communication after last week’s rate hike, with markets assigning only a small probability to another move in July.

Brown Brothers Harriman expects the Reserve Bank of Australia to pause at 4.35% after three consecutive hikes and to remain data-dependent.

The USD/CAD pair trades in negative territory around 1.3975 during the early European trading hours on Monday. The US Dollar (USD) strengthens against the Canadian Dollar (CAD) after the US and Iran announce a peace deal to reopen the Strait of Hormuz. 

USD/JPY pares its daily gains, still remaining in the positive territory and trading around 160.10 during the Asian hours on Monday. The Japanese Yen (JPY) has found a solid foothold in the wake of the geopolitical breakthrough.

The New Zealand Dollar (NZD) resumes its immediate bullish trend and appreciates against the US Dollar on Monday. The NZD/USD pair trades near 10-day highs above 0.5850 at the time of writing, fuelled by an improved market sentiment, following a peace deal between the US and Iran.

The USD/CHF pair slumps to near 0.7930, the lowest since June 5, during the early European trading hours on Monday. The US Dollar (USD) weakens against the Swiss Franc (CHF) after the US and Iran announced a framework deal for peace.