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Commerzbank’s Dr. Henry Hao and Moses Lim highlight that the South Korean government has unveiled a major South Korean Won (KRW) internationalisation roadmap, including unlimited KRW transactions with foreign institutions from January 2027 and broader access to onshore markets. They argue these reforms should lower the risk premium, deepen offshore liquidity and improve foreign access, even as greater internationalisation may heighten KRW sensitivity to global risk sentiment. USD/KRW fell to 1,478 on exporter-driven Dollar sales.

KRW roadmap boosts offshore access

"The South Korean government unveiled a broad package of measures to internationalise the KRW following the launch of 24-hour FX trading in early July. The reforms represent one of the most significant steps to liberalise the currency in years, aimed at improving offshore liquidity and foreign investors’ access to South Korean markets."

"From January 2027, foreign investors will be allowed to conduct unlimited KRW transactions with pre-registered foreign institutions. The reforms will remove reporting requirements for most transactions and eliminate the need for foreigners to open KRW accounts in South Korea."

"Taken together, these reforms should improve offshore access to the KRW and deepen foreign participation in South Korean financial markets."

"The main benefit of the reforms is likely a lower risk premium and improved foreign access to South Korean assets. Deeper offshore liquidity could also facilitate larger investment and repatriation flows without generating excessive FX volatility."

"However, greater internationalisation may increase the KRW’s sensitivity to shifts in global risk sentiment over time."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

BNY’s Geoff Yu argues that Prime Minister Andy Burnham’s removal of Value Added Tax (VAT) on household electricity is a test of the United Kingdom’s (UK) fiscal protection strategy. While the measure offers modest relief and trims headline inflation, gilt and British Pound (GBP) weakness highlight investor concerns that unfunded easing could signal a broader political shift, turning household support into a credibility challenge.

Energy tax cut raises fiscal questions

"The U.K. is testing fiscal protection. Prime Minister Andy Burnham’s removal of VAT on household electricity bills offers direct relief to consumers and a modest cushion to real incomes. There’s also talk of business-rates relief."

"But gilt and sterling weakness underline the trade-off. Household protection can quickly become a credibility problem if investors question whether fiscal easing is fully funded or part of a broader political shift. The measure itself is manageable; the signal is what markets are watching."

"New U.K. Prime Minister Burnham announced a cut in the household energy bills tax, scrapping the 5% VAT charge from October 1 as the first step in his cost-of-living package. The government said the move will save families about £45 a year, cost £850mn in 2026–27 and be financed by abandoning the previous administration’s digital ID plan."

"Officials said the measure could trim headline inflation by 0.1 percentage point. Burnham said the policy is meant to give households breathing space, while critics questioned the funding plan and noted that broader energy price pressures remain elevated."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• WTI rises more than 2.5% on Tuesday, trading around $84.40.
• Investors remain focused on the risk of Oil supply disruptions stemming from the US-Iran conflict.
• Markets now await the weekly American Petroleum Institute Crude Oil inventory report for fresh catalysts.

West Texas Intermediate (WTI) trades around $84.40 at the time of writing on Tuesday, up 2.6% on the day, as concerns over global Oil supplies continue to support prices despite hopes for a diplomatic de-escalation in the Middle East.

The market remains driven by geopolitical developments after US airstrikes on Iran entered their tenth consecutive day. United States (US) President Donald Trump reiterated on Monday that Iran would "pay" for the deaths of three US service members, while the Iranian Islamic Revolutionary Guards Corps (IRGC) claimed to have struck several US military installations in Bahrain and Kuwait.

Tensions escalated further after the Iran-backed Ansar Allah rebels in Yemen announced a maritime embargo against Saudi Arabia in the Red Sea. The move has reinforced concerns over regional energy flows, adding to the persistent risks surrounding shipping through the Strait of Hormuz, a strategic chokepoint for global Oil exports.

Meanwhile, markets continue to assess the prospects for a potential diplomatic resolution between Washington and Tehran. Although easing tensions could limit further gains in Oil prices, immediate concerns over global supply disruptions remain the dominant driver of the market.

Investors will now turn their attention to the weekly American Petroleum Institute (API) Crude Oil inventory report due later on Tuesday.

Middle East tensions keep Oil’s geopolitical premium in focus

BNY Mellon analysts highlight that “a tenth day of strikes keeps the shipping-risk channel alive and leaves Oil trading with a geopolitical premium,” with Gold edging higher alongside crude. They stress that “higher Oil is not just a risk-off signal; it’s also an inflation shock,” which helps explain why “Treasurys haven’t behaved like a simple safe haven” despite the escalation.

According to BNY Mellon, “the US Central Command said it hit command centers, launch sites and air defenses in Iran, while Iran struck US military sites in Kuwait and Jordan,” and that “the UK navy reports also pointed to attacks on vessels near the Strait of Hormuz.” Against this backdrop, BNY Mellon reports that “the standoff has lifted Brent crude to $88.45 a barrel and pushed US gasoline above $4 per gallon,” warning that “disruptions to Hormuz shipping could further tighten global Oil supplies and raise geopolitical risk.”

Deutsche Bank observes that “the headlines weren’t all positive yesterday,” noting that Oil prices “pared back some of their decline after [Ansar Allah] said they’d impose a maritime blockade on Saudi Arabia, which risks adding to the oil supply disruption.” On the Middle East conflict, they see “some hope” after “a spokesman for Iran’s foreign ministry said that ‘ideas from some mediators have been conveyed’ to Iran,” but add that “escalating rhetoric from [Ansar Allah] in Yemen as well as from President Trump meant Brent Crude still closed 1.27% higher at $89.22/bbl.”

Strategists at OCBC point out that “shipping through the Strait of Hormuz has already slowed significantly,” and that Oil prices “rose further after reports that Yemen's Iran-backed [Ansar Allah] plans to restrict Saudi-linked maritime traffic in the Red Sea.” They caution that “such a move would threaten one of the few alternative routes capable of offsetting disruptions in Hormuz, potentially tightening Middle East oil supplies.” OCBC adds that “a larger escalation could revive fears of a prolonged supply shock and drive Oil prices back above $100/bbl,” reminding clients that “for perspective, Brent crude reached $126/bbl in late April, around 40% above current levels.”

MUFG analysts note that “the key themes across markets were an escalation of tensions between US and Iran and this time potentially involving the [Ansar Allah] in Yemen, coupled with concerns around the sustainability of the AI boom.” They highlight that “in particular, the [Ansar Allah] said they will impose a maritime blockade on Saudi Arabia in response to what they say is Saudi Arabia’s siege of the Yemeni capital,” which “led to the Saudi Arabia led military coalition in Yemen to begin implementing operational measures to protect ships in the Bab el-Mandeb Strait at the southern end of the Red Sea.”

MUFG also flags that “a wholesale disruption of the Strait may also be an alternative option, and this may lead some tanker and cargo traffic to take a longer route through the Suez Canal and the Cape of Good Hope which could ultimately lead to higher container freight rates and transport costs.” However, they temper the risk assessment by arguing that “in practice, we think even if there were disruptions it is unlikely to be sustained given the lack of capability right now by [Ansar Allah] to do so and also differentiate which are Saudi linked ships or not.”

• Trump weighs ceasefire or broader Iran war, boosting safe-haven demand.
• US yields rise as September Fed hike odds stay elevated.
• Healey appointment leaves markets cautious on UK fiscal stance.

The Pound Sterling loses some ground against the US Dollar, down by 0.48%, as risk appetite in the foreign exchange markets deteriorates, with the Greenback reclaiming key technical levels in the US Dollar Index (DXY) amid the escalation of the US-Iran conflict. The GBP/USD trades at 1.3371, after reaching a daily high of 1.3455.

GBP/USD falls as Middle East escalation lifts yields and Dollar

The DXY, which tracks the buck’s value against a basket of six currencies, advances 0.14% at 101.14, as tensions in the Middle East rise. Newswires reported that Washington is demanding a longer ceasefire and partial navigation through the Strait of Hormuz, while Iran proposed a 10-day ceasefire.

A report by Axios revealed that Trump is evaluating whether to promote a ceasefire of 10-days or launch a full-scale war on Iran. In the meantime, a US official said that if Trump advocates expanding the war, the strikes will include Tehran and nuclear sites, according to Al Arabiya.

Aside from this, US data showed the ADP Employment Change 4-week average at 16.5K, below the prior revised 19.25K, amid a light economic docket during the week, with Initial Jobless Claims the most important release ahead of the Federal Reserve’s (Fed) July 29 monetary policy decision.

US Treasury yields are rising, with the 10-year T-note up three basis points at 4.624%, a tailwind for the Greenback. This signals that investors expect a Fed rate hike toward the end of the year.

Data from Prime Terminal suggests a 78% chance that the Fed will keep rates unchanged at next week’s meeting, but for September the odds for a hike are near 68%.

In the UK, John Healey was appointed as Britain's Chancellor of the Exchequer, succeeding Rachel Reeves. The new PM, Andy Burnham, named Healey after the close of the UK markets, yet the Pound has eased amid some uncertainty about the UK’s fiscal position.

Before taking office, Andy Burnham reiterated that he would stick to the fiscal rules, though he said he would use any budgetary flexibility within those rules to implement his program.

Earlier, strong UK jobs data eased pressure on the Bank of England, which could resume its easing cycle next year. Investor eyes are on Wednesday's inflation data release.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3371, retaining a bearish near-term bias as the pair holds just beneath the cluster of Simple Moving Averages (SMA) around 1.3374. Price also remains capped below the downward resistance trendline break level at 1.3478, while the Relative Strength Index (RSI) at 49 leans slightly negative, hinting at a lack of strong buying pressure despite the recent stabilization above the mid-1.3300s.

On the topside, immediate resistance is located at the grouped 50/100/200-period SMAs near 1.3374, followed by the descending trend-line barrier at 1.3478, with the former support-line break at 1.3511 now acting as a higher cap. With no clear structural support levels defined in the current dataset below spot, any decisive break under 1.3371 would likely expose the pair to further downside exploration until fresh demand emerges on the chart.

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

• USD/CHF edges higher as Middle East tensions support the US Dollar.
• Holding above 0.8000 keeps the near-term bias tilted to the upside.
• RSI points to positive momentum, while a softer ADX suggests the trend is losing strength.

USD/CHF edges higher as escalating tensions in the Middle East support the US Dollar (USD), with buyers eyeing a breakout above the 0.8150 resistance level that has capped gains since July 2025. At the time of writing, the pair trades around 0.8123, up 0.27% on the day.

From a technical perspective, USD/CHF has largely traded sideways after breaking above 0.8000 in June. A successful retest of that level drew buyers back into the market. Holding above 0.8000 keeps the near-term bias tilted to the upside, although buyers may need a fresh catalyst to clear 0.8150.

On the daily chart, the pair trades above the Bollinger Bands 20-period Simple Moving Average (SMA) at 0.8084 and is approaching the upper band at 0.8140.

The Relative Strength Index (RSI) near 59 points to positive momentum without signalling overbought conditions. However, the Average Directional Index (ADX) has eased to around 26 from above 30, suggesting the recent advance is losing some strength.

Immediate resistance lies at the upper Bollinger Band near 0.8140, closely followed by the multi-month barrier at 0.8150. On the downside, initial support sits at the Bollinger midline at 0.8084, followed by the lower band at 0.8029. Below that, the 0.8000 and 0.7900 horizontal levels could attract buying interest.

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

United States (US) President Donald Trump said during a press conference at the White House on Tuesday that Washington could intensify its military campaign against Iran, including possible strikes on the underground Pickaxe Mountain site. Trump also dismissed the prospect of immediate negotiations with Tehran and reiterated that the blockade would remain in place.

Key takeaways:

We’ll be hitting the Pickaxe Mountain area pretty soon, very heavily.

Iran hasn’t seen anything yet. We’ve been nice.

Iran is probably trying to impact the elections through Hormuz.

We’ll hit any site that Iran is considering for nuclear operations.

We’re not finished at all with Iran. We’re not leaving right now. We have had a big impact on Iran.

I would speak to Hezbollah.

Nobody gets through the blockade.

I have no interest in meeting Iran until they are ready.

Iran wants to meet. We have no interest. Iran desperately wants to meet.

On Israel: “We will be looking at issues in pilot zones.”

On Canadian tariffs: “It is not related to the wildfires. It is because they have been tough on our farmers and on us.”

• DJIA snaps three-day losing streak, though rebound stalls at 52,200, well short of early July record.
• Beats from 3M and General Motors and a broad semiconductor rally power the session.
• Washington opens a 50% tariff front against Canada, while ADP's weekly hiring gauge slows for a fourth straight week.

The Dow Jones Industrial Average (DJIA) climbs around 340 points, or 0.7%, on Tuesday, snapping a three-day slide that has pulled the index away from the early July record just above 53,300. The rebound runs out of steam at the 52,200 level, and the Dow changes hands just beneath that ceiling at lunchtime in New York, roughly 2% short of the high-water mark.

The advance comes with CENTCOM's air campaign against Iran running into a tenth consecutive night and Crude Oil adding 2%. West Texas Intermediate (WTI) climbs back above $85 with Brent above $91. Equity investors have filed the war under background noise for now: reports of a mediator-drafted, 10-day ceasefire proposal give the peace trade a faint pulse, and a strong earnings tape gives the index a reason to look elsewhere.

Earnings do the lifting

3M (MMM) jumps more than 9% after a second-quarter beat, and General Motors (GM) clears both revenue and profit estimates for a 3% gain, extending a reporting season that has beaten emphatically. Nearly 88% of the roughly 66 S&P 500 companies reporting so far have topped profit estimates, per FactSet. Alphabet, IBM and Tesla headline the docket later this week.

Semiconductors supply the torque beneath the surface with the benchmark iShares Semicondcutor ETF (SOXX) up 5%, Micron (MU) adding 7%, Intel (INTC) rising more than 5%, and Marvell Technology (MRVL) gaining around 6%. Sell-side commentary frames the coming fortnight as the defining stretch of the season and warns that, after the run to records, good results are no longer automatically good enough. A market priced for perfection has started grading on a curve, and companies that miss are being sent home with a note.

A tariff sequel timed to a stale print

Washington supplies the counterweight to the cheer with Monday's 50% tariff on most Canadian goods taking effect as retaliation for what administration officials call discrimination against American products. US Trade Representative Jamieson Greer added Tuesday that action against dozens of countries is coming soon, responding to a Financial Times report that the White House plans a fresh tariff wave before its 10% global levy expires.

The sequencing tells its own story: after weeks in which Iran supplied every headline, the president is steering attention back toward the trade war he prefers, and the apparent license is June's Consumer Price Index (CPI), which fell 0.4% on the month and cooled to 3.5% YoY. Reading that print as room to manoeuvre ignores what produced it. The decline was almost entirely a peace-dividend energy artifact, with gasoline down 9.7% in a month, and the ceasefire behind those pump prices collapsed before the ink on the release dried.

The import bill argues even more directly against the manoeuvre: all-import prices rose 7.1% YoY in June, the fastest since August 2022, with nonfuel imports up 4.2%, and because the index excludes duties, those are border prices before any tariff applies. Exporters are not absorbing the levies, so a 50% surcharge on Canadian goods lands on top of the steepest import-price inflation in four years and gets paid, ultimately, by the constituents the president answers to.

A silent Fed and a freezing labour market

The Federal Reserve (Fed) sits in its pre-meeting blackout ahead of the 29 July decision, and for once the silence subtracts nothing: under its new chair the statement runs about 130 words, forward guidance has been struck entirely, and the standing philosophy holds that markets should react to data rather than guess the committee. A blackout is difficult to distinguish from the communications policy it interrupts.

The data offered for reaction keeps softening at the margin: the weekly estimate from ADP, a 4-week moving average born during last autumn's official data blackout, shows private employers adding an average of 16.5K jobs a week, down from 19.25K, a fourth straight week of slowing that fits the low-hire, low-fire freeze in June's 57K Nonfarm Payrolls print. Rate markets barely blink, still pricing a July hold near 86%, at least one hike roughly two-thirds priced by September, and a full hike by year-end.

A thin docket until Friday's PMI double bill

The calendar offers little resistance before the back of the week: Initial Jobless Claims land Thursday at 12:30 GMT, with consensus at 212K against 208K prior, a drift higher that would corroborate the freeze without alarming anyone. Friday at 13:45 GMT brings July's flash S&P Global Purchasing Managers Index (PMI) round, Manufacturing seen accelerating to 54.5 from 53.9, while Services slips to 51 from 51.2 and the Composite starts from 51.9, before June New Home Sales at 14:00 GMT follow May's 7.3% drop.

The split inside that PMI pair is the tell worth watching, because a goods sector accelerating into a tariff regime, while services grind toward the stagnation line reads like the tariff economy in miniature: Output pulled forward and prices pushed up on one side, the consumer-facing side stalling on the other. It is the first red-band test of whether the trade-war pivot lands on an economy that can absorb it.

Dow Jones Industrial Average technical levels

Resistance: The 52,200 level caps the rebound, with mid-July's congestion around 52,400 stacked behind it and the record just above 53,300 the destination beyond that.

Support: The 52,000 handle is the first floor, backed by the week's low near 51,800. Below there, the rising 50-day Exponential Moving Average near 51,400 is the line that keeps the summer uptrend intact.

Bias: Bullish while the index holds the 52,000 handle, though the daily Stochastic Relative Strength Index easing through the 40 area says the bounce still needs Friday's data to refuel. A daily close above the 52,200 level reopens the record; a break below 51,800 turns this pullback into a deeper retracement toward the 50-day average.

Dow Jones daily chart

Standard Chartered Bank economist Saurav Anand highlights rising inflation risks for India as deficient monsoon rains and persistent El Niño threaten food output. The report notes sowing is down and reservoir levels are low, with pulses, vegetables, sugar and oilseeds most exposed. The authors see upside risks to FY27 CPI inflation and potential repo rate hikes if food prices surge.

Monsoon deficit threatens food prices

"With El Niño conditions persisting and the likelihood of drier weather conditions after mid-August, the risk of a large rainfall deficit by the end of the monsoon season, and a consequent spillover to the current summer and upcoming winter crops, remains high."

"A double-digit rainfall deficit would significantly raise the upside risk to inflation."

"Lower weight of food in the CPI basket, better irrigation coverage, potential policy intervention could partially cap the inflationary impact."

"Despite better irrigation coverage and likely policy intervention, the impact of a large monsoon deficit/El Niño on crop output and prices is unlikely to be completely offset."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• USD/JPY trades near 163.00 after briefly reaching 163.04, its highest level since December 1986.
• Softer US labor and inflation data limit Fed tightening expectations, but persistent Yen weakness keeps intervention risks elevated.

USD/JPY trades higher near 163.00 on Tuesday after briefly reaching 163.04, marking its first move above the 163.00 level since December 1986. The US Dollar (USD) remains supported by safe-haven demand as investors assess renewed Middle East tensions and rising Oil prices.

The pair advanced despite signs of softer US labor-market momentum. The ADP Employment Change four-week average declined to 16.5K from 19.25K, suggesting that private-sector hiring continues to cool.

Recent softer US inflation data has also limited expectations of further aggressive Federal Reserve (Fed) tightening. However, geopolitical uncertainty and persistent weakness in the Japanese Yen (JPY) continue to dominate, keeping USD/JPY near multi-decade highs and increasing the risk of intervention from Japanese authorities.

Yen underperforms as Japan data loom and intervention risk stays on radar

Strategists at Scotiabank highlight that the Yen’s underperformance against the US Dollar is keeping policymakers firmly in focus, noting they “remain concerned about the possibility of official intervention, or at the very least comments threatening potential action.” They add that the immediate data calendar offers few distractions, with “overnight releases…limited but Japan is scheduled to deliver its June trade figures at 7:50pm ET, ahead of CPI data later in the week,” events that could further shape market expectations around potential MoF responses to currency moves.

Short-term technical analysis:

On the 4-hour chart, USD/JPY trades at 162.97, holding a bullish near-term bias as it remains above both the 20-period Simple Moving Average (SMA) at 162.45 and the 100-period SMA at 162.15. The pair is pressing into overhead supply just beneath the horizontal resistance at 163.04, while the Relative Strength Index (RSI) extends into overbought territory around 73, hinting at strong but stretched upside momentum that could slow fresh gains.

On the downside, immediate support is seen at the nearby horizontal level at 162.94, followed by deeper cushions at 162.75 and 162.59, which align beneath the short-term 20-period SMA at 162.45 and the medium-term 100-period SMA at 162.15 to reinforce the broader constructive structure.

On the topside, a clear break above 163.04 would open the way for further appreciation, while failure to overcome this barrier could trigger consolidation or a corrective pullback toward the clustered supports below.

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

• AUD/USD trades near 0.7010 after reaching its highest level in four weeks.
• The US ADP Employment Change four-week average fell to 16.5K from the revised 19.25K, pointing to softer hiring momentum.
• Australia is expected to add 15K jobs in June, while the Unemployment Rate is forecast to remain at 4.4%.

AUD/USD trades lower near the 0.7010 area on Tuesday, although the pair has retreated from its four-week high. The Australian Dollar (AUD) remains above the psychological 0.7000 level as softer United States (US) economic data limits demand for the US Dollar (USD).

The Greenback remains broadly steady as investors balance escalating tensions in the Middle East against signs that United States (US) inflation is cooling. Geopolitical uncertainty and higher Oil prices continue to generate safe-haven demand, but recent inflation figures have reduced expectations of further aggressive Federal Reserve tightening. The US Dollar Index (DXY) holds close to the 101.00 area after reaching its highest level since July 15.

US Consumer Price Index inflation declined 0.4% MoM in June, while the annual rate moderated to 3.5%. The softer inflation backdrop was reinforced by weaker producer-price figures, helping the Aussie withstand the US Dollar’s geopolitical support.

US labor market indicators also showed some moderation. The ADP Employment Change four-week average declined to 16.5K from a revised down 19.25K, suggesting that private-sector hiring momentum continues to soften. The result prevented the Greenback from extending its recovery and helped AUD/USD remain above 0.7000.

Investors will now turn their attention to Australia’s June employment report on Thursday. Employment is expected to increase by 15K after rising by 40.3K previously. The Unemployment Rate is forecast to remain unchanged at 4.4%, while the Participation Rate is also expected to hold at 66.7%.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.7007, holding above both the 20-period Simple Moving Average (SMA) at 0.6998 and the 100-period SMA at 0.6946, which keeps the near-term bias mildly bullish. Price is also supported by the nearby horizontal floor at 0.7003, while the Relative Strength Index (RSI) around 57 suggests constructive but not overextended momentum as the pair consolidates just under the recent highs.

On the topside, initial resistance is seen at 0.7014, followed by a tighter cap at 0.7019, where recent supply has emerged. On the downside, immediate support aligns at 0.7003, ahead of the 20-period SMA at 0.6998 and a secondary horizontal level at 0.6997, with the 100-period SMA far below at 0.6946 reinforcing the broader bullish structure as long as it remains intact.

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