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Australian Dollar struggles against Japanese Yen despite hawkish RBA Minutes

  • AUD/JPY falls despite hawkish RBA Minutes showing readiness to raise rates further if financial conditions require it.
  • China’s manufacturing and non-manufacturing PMIs both rose, beating market expectations to signal steady economic expansion.
  • Japan’s Finance Minister Katayama warned Tuesday that the government will intervene appropriately to address volatile currency moves as needed.

AUD/JPY loses ground after remaining flat in the previous day, trading around 111.40 during the Asian hours on Tuesday. The currency cross remains subdued as the Australian Dollar (AUD) holds losses following the release of the Reserve Bank of Australia’s (RBA) Meeting Minutes and key Purchasing Managers’ Index (PMI) data from China.

The RBA June monetary policy Meeting Minutes revealed that while the board views current financial conditions as somewhat tight, it remains prepared to implement further rate hikes if necessary to ensure price stability. The central bank highlighted that the ongoing conflict in the Middle East poses a dual threat to the economic outlook, presenting significant upside risks to inflation alongside downside risks to overall growth.

China, Australia’s close trading partner, showed stronger-than-expected resilience in June. The official Manufacturing PMI edged up to 50.3 from the previous 50.0, beating market expectations of 50.1. Simultaneously, the NBS Non-Manufacturing PMI improved to 50.2 from May’s 50.1, comfortably defying the consensus forecast of a contractionary 49.9 print and signaling expansion across both sectors.

The downside of the AUD/JPY cross is limited by persistent weakness in the Japanese Yen (JPY), which remains under pressure due to the wide interest rate gap between Japan and other major economies. This ongoing depreciation has kept policymakers concerned and investors on high alert for potential currency intervention by Tokyo. Highlighting this stance, Japan’s Finance Minister Satsuki Katayama stated on Tuesday that the government “will respond appropriately to currency moves at any time as needed.”

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New Zealand Dollar remains depressed as USD benefits from Iran risks and hawkish Fed

  • NZD/USD edges lower as geopolitical risks and hawkish Fed bets help revive the USD demand.
  • The better-than-expected official PMIs from China fail to provide any impetus to antipodeans.
  • The lack of follow-through selling warrants caution before placing fresh bearish bets on the pair.

The NZD/USD pair attracts some sellers during the Asian session on Tuesday, though it lacks bearish conviction and remains confined in a familiar range held over the past week or so. Spot prices move little following the release of China’s official PMIs and currently trade just below mid-0.5600s, down 0.05% for the day.

An official survey published by the National Bureau of Statistics (NBS) showed that business activity in China’s manufacturing sector grew slightly above expectations in June. In fact, the official Manufacturing PMI rose from the 50.0 seen in May to 50.3, slightly above expectations of 50.1. Adding to this, the gauge for the non-manufacturing sector improved to 50.2 in June vs 50.1 in the previous month and forecast for a 49.9 print. The data, however, indicated that business activity barely remained in expansion territory on the back of sluggish domestic demand and weak consumer spending. This, in turn, fails to provide any impetus to antipodean currencies, including the New Zealand Dollar (NZD) and the NZD/USD pair.

The US Dollar (USD), on the other hand, draws some support from persistent geopolitical uncertainties and mixed signals on US-Iran talks. US President Donald Trump wrote on Truth Social that Iran had requested a meeting, and it will take place in Qatar’s capital, Doha, on Tuesday. However, Deputy Iranian Foreign Minister Kazem Gharibabadi denied that there were plans for technical talks this week. Furthermore, fresh Israeli strikes on Lebanon keep geopolitical risk premiums in play, which, along with hawkish US Federal Reserve (Fed) bets, underpins the safe-haven USD and weighs on the NZD/USD pair.

According to the CME Group’s FedWatch Tool, traders are still pricing in around 63% chance that the US central bank will raise borrowing costs in September and assigning over an 80% probability of a move by the end of this year. Adding to this, renewed US-Iran hostilities sparked inflationary fears, which, in turn, favor the USD bulls. However, the NZD/USD pair, so far, has held above its lowest level since November 2025, touched last week, warranting some caution before positioning for any further depreciating move.

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United States Dollar Index strengthens above 101.00 on Fed rate hike bets

  • US Dollar Index gains momentum to around 101.30 in Tuesday’s early European session.
  • Growing chances of US rate rises and optimism about the American economy support the DXY.
  • Traders brace for the upcoming US June jobs report, which is due on Thursday.

The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, currently trades near 101.30 during the early European trading hours on Tuesday. The DXY gathers strength and is heading for its biggest monthly gain in nearly a year on optimism over US economic growth and the prospect of Federal Reserve (Fed) interest rate hikes.

The Fed held its benchmark interest rate steady in a target range of 3.50% to 3.75% at its June policy meeting. The central bank’s update also removed a statement hinting that it was leaning towards lowering interest rates in the future.

A more hawkish turn at the Fed’s June meeting under new Fed Chair Kevin Warsh has led traders to increase bets on rate hikes this year, boosting the US Dollar across the board. Fed funds futures have priced in nearly a 63% chance of a rate hike by September, according to the CME FedWatch tool.

The US jobs report for June will take center stage later on Thursday. Three consecutive months of stronger-than-expected Nonfarm Payrolls (NFP) gains have supported the Fed’s hawkish shift.

Markets expect an increase of 110,000 jobs in June, and the Unemployment Rate is projected to hold steady at 4.3% during the same period. A turn in the labor market, however, could prompt a more dovish rethink of the monetary path, which would drag the DXY lower.

“The labor market appears to have accelerated,” said Marc Chandler, chief market strategist at Bannockburn Global Forex. “The concerns that the doves had pointed to about labor markets slowing down seem to have passed.”

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EUR/USD Price – Looks to extend intraday descent below 1.1400 on firmer USD

  • EUR/USD meets with a fresh supply as Iran risks and hawkish Fed bets revive USD demand.
  • Receding bets for a rate hike by the ECB undermine the Euro and contribute to the decline.
  • The mixed technical setup warrants some caution before placing aggressive directional bets.

The EUR/USD pair attracts some sellers during the Asian session on Tuesday, snapping a three-day winning streak and stalling its recent recovery from the lowest level since May 2025 set last week. Spot prices slip below the 1.1400 mark amid a firmer US Dollar (USD) and seem vulnerable to weaken further.

Renewed US-Iran hostilities and Israeli strikes on Lebanon keep geopolitical risk premiums in play. This, along with elevated expectations of Federal Reserve (Fed) interest rate hikes, assists the safe-haven USD to regain positive traction following a three-day downfall. Adding to this, reduced bets for a rate hike by the European Central Bank (ECB) in 2026 exert some downward pressure on the EUR/USD pair.

From a technical perspective, spot prices maintain a bearish outlook below the 200-period Exponential Moving Average (EMA) on the 4-hour chart and the 1.1500 psychological mark. Moreover, momentum indicators suggest that the downside pressure is moderating but not yet strong enough to challenge overhead resistance. In fact, the Relative Strength Index (RSI) near 49.1 hints at neutral bias after recovering from oversold territory.

Adding to this, the Moving Average Convergence Divergence (MACD) is marginally positive, with the line above zero and a modestly positive profile. Hence, any subsequent decline below the 1.1380 immediate support is more likely to attract some buyers near the 1.1335 zone. The latter should act as a key pivotal point, which, if broken decisively, will be seen as a fresh trigger for bearish traders and pave the way for deeper losses.

On the topside, initial resistance is clearly defined by the 1.1500 psychological mark and the 200-period EMA at 1.1538, which acts as the primary cap on any recovery attempts. The EUR/USD pair would need to reclaim the said barriers to ease the broader bearish tone and shift the technical picture toward a more constructive outlook.

(The technical analysis of this story was written with the help of an AI tool.)

EUR/USD 4-hour chart

Chart Analysis EUR/USD

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD0.21%0.18%0.15%0.15%0.24%0.01%0.20%
EUR-0.21%-0.03%-0.09%-0.10%0.03%-0.21%-0.02%
GBP-0.18%0.03%-0.04%-0.04%0.08%-0.16%0.00%
JPY-0.15%0.09%0.04%0.00%0.10%-0.11%0.05%
CAD-0.15%0.10%0.04%-0.01%0.08%-0.13%0.04%
AUD-0.24%-0.03%-0.08%-0.10%-0.08%-0.20%-0.04%
NZD-0.01%0.21%0.16%0.11%0.13%0.20%0.15%
CHF-0.20%0.02%-0.00%-0.05%-0.04%0.04%-0.15%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

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Swiss Franc declines ahead of KOF Leading Indicator

  • USD/CHF rises as the Swiss Franc weakens ahead of KOF data, despite forecasts predicting an increase to 98.2.
  • The US Dollar gains amid expectations of sustained higher interest rates.
  • Persistent Middle East friction drives safe-haven demand for the Greenback.

USD/CHF recovers its recent losses from the previous day, trading around 0.8090 during the Asian hours on Tuesday. Traders await the KOF Swiss Leading Indicator due later in the day, which is expected to inch up to 98.2 in May, from 98.0 prior.

The USD/CHF pair gains ground as the US Dollar advances amid rising hawkish sentiment surrounding the Federal Reserve’s (Fed) policy trajectory. According to the CME FedWatch tool, traders are now pricing in a nearly 60% probability of a Fed interest rate hike by September.

Traders are awaiting this week’s key US labor market reports, particularly Thursday’s Nonfarm Payrolls (NFP) data, for definitive clues on the central bank’s next moves. Forecasters currently expect June job growth to land at 114,000, with the Unemployment Rate holding flat at 4.3%.

The Greenback gains safe-haven support from persistent geopolitical friction in the Middle East, though diplomatic signals remain highly conflicted. US President Donald Trump announced that the two nations were set to hold fresh peace talks on Tuesday in Doha, Qatar, following a weekend of regional hostilities. However, Tehran sharply contradicted this claim, stating that no negotiation meetings are scheduled with Washington at any level and emphasizing that Iran remains focused on implementing its existing memorandum of understanding rather than entering final agreement talks.

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  • EUR/JPY weakens to near 184.85 in Tuesday’s early European session.
  • Japan’s Katayama said the government was ready to take appropriate action against excessive currency moves.
  • Traders reduce their bets on the ECB rate hikes this year.

The EUR/JPY cross loses ground to around 184.85 during the early European trading hours on Tuesday. The Japanese Yen (JPY) rebounds against the Euro (EUR) as traders on alert for possible intervention from Japanese authorities. Germany’s Retail Sales and inflation data will be published later in the day.

Japanese Finance Minister Satsuki Katayama on Tuesday reiterated the authorities stood ready to respond appropriately at any time. Meanwhile, Chief Cabinet Secretary Minoru Kihara said that the Japanese government will work to build an economy less vulnerable to foreign-exchange volatility while remaining prepared to intervene in currency markets if necessary. Kihara also declined to comment on the Japanese Yen’s current level.

“It’s a question of when, not if, the Ministry of Finance (MOF) intervenes again to support the yen,” said Carol Kong, currency strategist at Commonwealth Bank of Australia.

ECB President Christine Lagarde said in a speech opening her institution’s annual retreat on Monday that Europe is becoming less vulnerable to outside shocks thanks to a better financial framework and progress on the green transition. Lagarde emphasized that tensions subside amid a peace deal, which is “far from assured.” Policymakers must decide whether further monetary tightening is needed.

Markets have pared expectations for future ECB rate increases as energy prices retreat. Oxford Economics and Capital Economics expect the ECB won’t raise the interest rates further, though investors are still pricing one more quarter-point move, which would bring the deposit rate to 2.50%.

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Euro softens against Japanese Yen as traders on alert for possible intervention

  • EUR/JPY weakens to near 184.85 in Tuesday’s early European session.
  • Japan’s Katayama said the government was ready to take appropriate action against excessive currency moves.
  • Traders reduce their bets on the ECB rate hikes this year.

The EUR/JPY cross loses ground to around 184.85 during the early European trading hours on Tuesday. The Japanese Yen (JPY) rebounds against the Euro (EUR) as traders on alert for possible intervention from Japanese authorities. Germany’s Retail Sales and inflation data will be published later in the day.

Japanese Finance Minister Satsuki Katayama on Tuesday reiterated the authorities stood ready to respond appropriately at any time. Meanwhile, Chief Cabinet Secretary Minoru Kihara said that the Japanese government will work to build an economy less vulnerable to foreign-exchange volatility while remaining prepared to intervene in currency markets if necessary. Kihara also declined to comment on the Japanese Yen’s current level.

“It’s a question of when, not if, the Ministry of Finance (MOF) intervenes again to support the yen,” said Carol Kong, currency strategist at Commonwealth Bank of Australia.

ECB President Christine Lagarde said in a speech opening her institution’s annual retreat on Monday that Europe is becoming less vulnerable to outside shocks thanks to a better financial framework and progress on the green transition. Lagarde emphasized that tensions subside amid a peace deal, which is “far from assured.” Policymakers must decide whether further monetary tightening is needed.

Markets have pared expectations for future ECB rate increases as energy prices retreat. Oxford Economics and Capital Economics expect the ECB won’t raise the interest rates further, though investors are still pricing one more quarter-point move, which would bring the deposit rate to 2.50%.

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Offshore Yuan Heads for Monthly Loss

The offshore yuan weakened to around 6.79 per dollar in June, reversing two consecutive months of gains as a stronger US dollar and a series of softer-than-expected daily fixings from the People’s Bank of China weighed on the currency. The dollar strengthened as investors priced in higher-for-longer US interest rates, while ongoing uncertainty in the Middle East boosted demand for the currency’s safe-haven appeal. Additional pressure came from the PBoC’s persistent setting of weaker-than-anticipated reference rates, reinforcing expectations that authorities are comfortable with a gradual depreciation of the yuan. On the economic front, manufacturing PMI edged up to 50.3 from 50.0, exceeding market expectations of 50.1, supported by resilient demand for high-tech exports that helped offset trade disruptions linked to tensions in the Middle East. Meanwhile, the non-manufacturing PMI edged up to 50.2 from 50.1, beating forecasts of 49.9 and signaling continued stabilization in the sector.