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0940 GMT – U.S. Treasury yields trade steady on the day, with the 10-year yield close to an earlier two-month high, while the dollar is marginally lower. Investors remain cautious as oil prices rise and Middle East tensions continue, leaving a risk that yields and the dollar could rise. “The pullback [in the U.S. dollar] could prove limited, however, as Treasury yields remain at elevated levels and geopolitical tensions could continue to fuel safe-haven demand,” DHF Capital S.A’s Bas Kooijman says in a note. Brent crude rises 3.5% to $94.19. The 10-year Treasury yield is last up 0.2 basis points at 4.630%, having earlier hit a high of 4.642%, according to Tradeweb. The DXY dollar index falls 0.1% to 101.102, having hit a one-week high of 101.210 overnight. ([email protected])
Rate Differentials Lift Euro But Gains Unlikely to Last
0956 GMT – The euro rises against the dollar as higher oil prices prompt investors to price in more aggressive interest-rate increases compared to the Federal Reserve, ING’s Chris Turner says in a note. However, it’s hard to see the market pricing in even higher European Central Bank rates, regardless of the language delivered at Thursday’s policy decision and press conference, he says. “Barring a near-term move towards another ceasefire between the U.S. and Iran, our bias remains for the euro drift back to $1.1380 and then take its cue from tomorrow’s ECB meeting.” The euro rises 0.1% to $1.1408. ([email protected])
U.K. Politics More Likely to Move Sterling Than Data
0909 GMT – U.K. politics should remain in focus for sterling traders as this week’s inflation and jobs data do little to shift the outlook for the Bank of England, Monex Europe analysts say in a note. The BOE is likely to leave rates unchanged on July 30, they say. Attention therefore remains on politics as newly-appointed Prime Minister Andy Burnham plans to reduce the cost of living and has said he’ll seek flexibility within the fiscal rules. “We retain a modest downside bias [for sterling] pending budget detail.” Sterling trades flat at $1.3374 while the euro rises 0.1% to 0.8526 pounds, showing a limited reaction to Wednesday’s lower-than-expected headline inflation data for June. ([email protected])
Sterling Faces Volatility Amid Fiscal Uncertainty
0840 GMT – Sterling investors potentially face a volatile period given fiscal policy uncertainty, Commerzbank’s Thu Lan Nguyen says in a note. It’s unclear how the newly formed U.K. government under Prime Minister Andy Burnham will handle the difficult balance between fiscal sustainability and stimulating growth, she says. Burnham’s promise of a new economic models suggests he won’t shy away from major measures, she says. “This, in turn, entails considerable risks for an already fragile market sentiment.” The government has announced plans to cap most single bus fares in England and cut VAT from electricity bills as part of Burnham’s pledge to reduce the cost of living. The euro rises 0.1% to 0.8524 pounds. Sterling rises 0.1% to $1.3379 versus a softer dollar. ([email protected])
Higher Energy Prices Could Continue to Weigh on Low-Yielding Yen, Franc
0759 GMT – The low-yielding Japanese yen and Swiss franc could stay under pressure as higher energy prices prompt markets to price in interest-rate rises for other central banks, ING’s Chris Turner says in a note. The fact that equities are relatively firm despite higher energy prices could be weighing on the yen and franc as defensive currencies, he says. However, a far more important factor “appears to be low interest rates and central banks that will be slow to hike.” The dollar falls 0.2% to 162.90 yen after reaching a 40-year high of 163.23 Tuesday, LSEG data show. The dollar falls 0.1% to 0.8118 francs but stays near a one-week high of 0.8133 reached overnight. ([email protected])
Dollar Remains Elevated as U.S.-Iran Conflict Lifts Energy Prices
0704 GMT – The dollar eases but remains close to a one-week high reached overnight as the U.S.-Iran conflict pushes up oil prices. The rise in oil prices along with natural gas and other commodity prices has lifted near-term inflation expectations, Deutsche Bank analysts say in a note. “That backdrop meant investors priced in more Federal Reserve rate hikes, and speculation even returned about a potential rate hike next week.” The DXY dollar index falls 0.1% to 101.127 after reaching a high of 101.210 overnight. ([email protected])
Sterling Edges Lower as Inflation Eases
0640 GMT – Sterling falls after data showed inflation eased more than expected in June, reducing the prospect of the Bank of England raising interest rates. Inflation fell to an annual rate of 2.6% in June from 2.8% in May, although the core measure held at 2.6%. Economists in a WSJ survey expectedinflation of 2.7% and core inflation of 2.5%. “Household energy bills have yet to fully reflect this summer’s energy price shock, and the increase in the Ofgem price cap will push inflation higher again in the months ahead,” Aberdeen Investments economist Felix Feather says in a note. Sterling trades flat at $1.3369, compared to $1.3382 before the data. The euro rises 0.1% to 0.8532 pounds, from 0.8523 beforehand. ([email protected])
Japan’s Currency Intervention Hinges on Multiple Factors
0057 GMT — Investors are increasingly viewing Tokyo’s intervention strategy as a multifactor equation rather than a strict line in the sand, says SMBC Nikko Securities strategist Rinto Maruyama. Despite dollar-yen pushing well past the 160 level—long viewed as a key threshold for government action—the pair continues its gradual upward grind. Traders are shifting away from simple price-level triggers. They recognize that authorities evaluate intervention based on a complex combination of factors, including the pace of exchange-rate moves, market liquidity, speculative positioning, international coordination, and underlying economic fundamentals, Maruyama says. The dollar was last trading at 163.13 yen. ([email protected])
Asian Currencies Consolidate; Rising Oil Prices, Treasury Yields May Weigh on Risk Sentiment
0025 GMT — Asian currencies consolidate against the dollar in early trade. However, rising oil prices and U.S. Treasury yields could weigh on risk sentiment, analysts say. The U.S. and Iran have continued to exchange military strikes, CBA’s Samara Hammoud says in a research report. “We expect the strikes to continue for the next two months,” the international economist and currency strategist says. “A continuation of the Middle East conflict should support the USD because of its safe-haven status and typically positive correlation with oil prices,” Hammoud adds. The dollar rises 0.1% to 33.72 baht after earlier touching 33.73 baht, its highest intraday level since April 2025, LSEG data show. It is also 0.1% lower at 1,480.15 won. ([email protected])
Dollar Tests Trendline Resistance Vs. Yen After Upward Break, Charts Show
2350 GMT — The dollar tests resistance versus the yen on a trend line drawn from January 2026 high after the dollar-yen pair’s upward break to the highest since December 1986 on Tuesday, StoneX’s Matt Simpson says in commentary. This trend line coincides with Tuesday’s high, making it a valid interim resistance level, the senior market analyst says. The dollar’s “monthly R1 pivot” at 163.72 yen and the Y165.30 level could be subsequent resistance levels if trend line resistance breaks, Simpson says. However, the currency pair seems stretched on the one-hour chart, while bearish relative strength index divergences have formed in overbought territory, raising the potential for a near-term pullback, Simpson adds. The dollar is steady at Y163.20 after touching Y163.23 overnight, LSEG data show. ([email protected])
