Forex News
Brown Brothers Harriman’s (BBH) Elias Haddad argues that Sweden’s benign inflation and spare capacity support an extended Riksbank hold. While the central bank projects its policy rate at 1.75% until late 2026, swaps price a more aggressive tightening path. Haddad believes market expectations can adjust lower toward the Riksbank’s guidance, leaving the Swedish Krona (SEK) under pressure.
Market hikes seen too aggressive
"Sweden May CPI is due Thursday. CPIF is expected at 1.3% y/y (Riksbank forecast: 1.6%) vs. 0.8% in April while CPIF ex-energy is projected at 0.3% y/y (Riksbank forecast: 0.9%) vs. 0.0% in April."
"Sweden’s benign inflation backdrop alongside ample spare capacity in the economy argue for an extended Riksbank hold."
"In March, the Riksbank penciled in the policy rate to remain at 1.75% until Q4 2026, followed by a first full 25bps hike to 2.00% by Q1 2028. The swaps curve is more aggressive and price in 43bps of hikes in the next twelve months."
"In our view, the swaps curve has room to adjust lower towards the Riksbank’s more subdued tightening path which remains a headwind for SEK."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Rabobank’s Senior FX Strategist Jane Foley expects EUR/USD to stay largely range-bound near key moving averages as markets await clarity on a potential US-Iran deal and US data that could shift Federal Reserve (Fed) expectations. Foley sees scope for safe-haven US Dollar (USD) demand in the near term, but anticipates a gradual EUR/USD recovery over 3–6 months, with EUR/USD 1.20 remaining a challenging target due to Eurozone growth risks.
Range trading with constrained upside
"EUR/USD traded with a slight upside bias through the last week or so of May and is currently positioned just below the 50-, 100- and 200-day smas, with the latter situated at 1.1682. From a technical perspective, a break above these levels could encourage further buying of the currency pair. However, given that the market is awaiting news regarding a deal between the US and Iran in addition to US economic data which could sway investors’ expectations regarding Fed policy, it seems more likely that the currency pair will trade sideways awaiting fresh fundamental factors."
"Last week, Rabobank revised its geopolitical outlook and now sees risk of no re-opening of the Strait of Hormuz for up to 3 months. On the back of this view we continue to see risk of safe haven USD buying on a 1-month view that could push EUR/USD towards the 1.15 level. We then expect EUR/USD to push higher on a 3-to-6-month view."
"However, we maintain the outlook that a push to EUR/USD1.20 could be a struggle for the single currency this year given Eurozone growth risks."
"This suggests that any break higher in EUR/USD this week may need the trigger of a positive development with respect to the end of the war. At the same time, in view of uncertainty regarding the Fed outlook, the market may be wary of driving EUR/USD much higher ahead of the release of Friday’s US May labour report."
"While an October rate cut from the Fed should allow EUR/USD to trend upwards in H2, we don’t expect the currency pair to gain significant upward traction in this period. The market is already well priced for two ECB rate hikes in this period and, in Rabo’s view, growth headwinds in the Eurozone are likely to ensure that EUR/USD1.20 remains a high bar."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- USD/JPY strengthens at the start of the week as risk appetite deteriorates amid escalating tensions in the Middle East.
- Concerns about the economic impact of higher energy prices weigh on the Japanese Yen.
- Investors await the US ISM Manufacturing PMI and key labor market data later this week.
USD/JPY trades around 159.50 on Monday at the time of writing, up 0.13% on the day, as the US Dollar (USD) benefits from renewed safe-haven demand amid a worsening market sentiment backdrop.
The Greenback is supported by rising geopolitical tensions in the Middle East. Recent clashes between the United States (US) and Iran have revived concerns about the durability of the current ceasefire, while Israel has intensified its operations in Lebanon. This environment fuels risk aversion and boosts demand for the US Dollar.
At the same time, higher Oil prices are increasing concerns about Japan’s economic outlook. The country remains heavily dependent on energy imports, making its economy particularly vulnerable to supply disruptions through the Strait of Hormuz. These concerns continue to keep the Japanese Yen (JPY) near multi-week lows against the US Dollar.
Data released in Japan on Monday provided little support to the domestic currency. Corporate Capital Spending was flat in the first quarter after expanding by 6.5% YoY in the previous quarter, pointing to a slowdown in investment momentum.
On the monetary policy front, several Bank of Japan (BoJ) officials continue to support the case for a gradual normalization of policy. The Summary of Opinions from the April meeting showed that a majority of policymakers favor a rate hike in the near term while warning about persistent inflation risks. According to MUFG, markets are now pricing in roughly an 80% chance of a 25-basis-point rate increase at the June 16 meeting.
In the United States (US), attention is turning to a busy week of macroeconomic releases. The Institute for Supply Management (ISM) Manufacturing Purchasing Managers’ Index (PMI) is due later on Monday, ahead of a series of labor market reports throughout the week. Friday’s Nonfarm Payrolls (NFP) report will be the key event for investors and could provide fresh clues about the future path of the Federal Reserve’s (Fed) monetary policy.
The combination of a US Dollar supported by geopolitical risks and a Japanese Yen pressured by concerns over rising energy costs continues to favor a bullish bias for USD/JPY. However, fears of a potential intervention by Japanese authorities could limit further gains in the pair.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.09% | -0.11% | 0.14% | 0.24% | 0.14% | 0.56% | 0.39% | |
| EUR | -0.09% | -0.19% | 0.02% | 0.15% | 0.12% | 0.48% | 0.28% | |
| GBP | 0.11% | 0.19% | 0.21% | 0.34% | 0.23% | 0.65% | 0.46% | |
| JPY | -0.14% | -0.02% | -0.21% | 0.12% | 0.02% | 0.44% | 0.24% | |
| CAD | -0.24% | -0.15% | -0.34% | -0.12% | -0.11% | 0.31% | 0.13% | |
| AUD | -0.14% | -0.12% | -0.23% | -0.02% | 0.11% | 0.36% | 0.21% | |
| NZD | -0.56% | -0.48% | -0.65% | -0.44% | -0.31% | -0.36% | -0.19% | |
| CHF | -0.39% | -0.28% | -0.46% | -0.24% | -0.13% | -0.21% | 0.19% |
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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
BNY’s Bob Savage notes that the US Dollar (USD) is firmer, with US Dollar Index (DXY) slightly higher as bond yields rise and risk sentiment turns cautious. Former Fed Chair Jerome Powell, now a governor, strongly defended Federal Reserve (Fed) independence in Boston, warning that political interference in policymaker removal or regional president appointments could undermine confidence in US monetary policy.
Dollar firm as Powell defends Fed
"The new month starts with mixed risk sentiment."
"Former Federal Reserve (Fed) Chair Jerome Powell used a public speech in Boston to deliver a strong defense of Federal Reserve independence, arguing that the central bank’s credibility would be at risk if any administration gained the ability to remove policymakers over disagreements on monetary policy."
"Speaking after returning to his role as a Fed governor, Powell stressed that legal protections shielding Fed officials from political interference are essential to preserving confidence in U.S. monetary policy and noted that the executive branch has no role in selecting or overseeing regional Federal Reserve Bank presidents."
"His remarks come as the U.S. Supreme Court is expected to rule on President Trump’s attempt to remove Fed Governor Lisa Cook, a case that could have significant implications for the institution’s independence."
"Powell also emphasized the importance of preserving the Fed’s authority over the appointment of regional presidents, warning that institutional safeguards built over decades can be weakened quickly if political influence expands."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Iranian Foreign Minister Seyed Abbas Araghchi warns of serious consequences, in a post on X, formerly known as Twitter, that the United States (US) and Israel would face serious consequences if there were any military action across all fronts, including Lebanon.
“A ceasefire between Iran and the United States constitutes, without any ambiguity, a comprehensive ceasefire across all fronts, including Lebanon. Any violation of this ceasefire on one front shall be considered a violation of it across all fronts. The United States and Israel bear responsibility for the consequences of any breach of the truce,” Araghchi wrote.
Market Reaction
There seems to be a slight negative impact on S&P 500 futures from Iran Araghchi's warning against US and Israel attacks on all fronts, including Lebanon. S&P 500 futures drop marginally, but are still 0.2% higher to near 7,600 ahead of US markets opening.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
- GBP/USD is looking for direction around 1.3450 amid a cautious market mood.
- Rising US-Iran tensions are weighing on risk appetite on Monday.
- The pair is forming a triangle pattern with a bearish outcome favoured.
The British Pound (GBP) remains practically flat against the US Dollar (USD) on Monday, trading both sides of the 1.3450 level, with investors wary of taking excessive risks. Growing tensions in the Middle East are weighing on risk appetite while USD rallies remain subdued, ahead of a string of key fundamental releases in the US.
A further escalation of the tensions between the US and Iran and the extension of Israel’s occupation in Lebanon have prompted retaliation pledges by Iranian authorities, casting shadows over an already frail ceasefire. US President Donald Trump is still due to sign a memorandum of understanding that would extend the ceasefire, and Iran’s Tasnim news agency, citing a source familiar with the negotiations, suggested that the framework of the agreement is not yet confirmed.
Beyond that, investors await a slew of key fundamental releases in the US, starting with the US ISM Manufacturing PMI, due later on Monday, and ending on Friday with the all-important May Nonfarm Payrolls report. These figures may help to assess the next moves from a divided US Federal Reserve committee and hence, set the near-term direction for USD crosses.
Technical Analysis: Forming a triangle pattern
GBP/USD trades at 1.3461, holding a constructive bullish bias with a succession of lower highs and higher lows forming a triangle pattern. Triangles are considered continuation patterns and, in this case, a bearish outcome is favoured.
Momentum indicators in 4-hour charts show a mild bullish pressure. The Relative Strength Index (RSI) lies right above the 50 midline modestly, and the Moving Average Convergence Divergence (MACD) histogram has turned slightly positive.
On the topside, the triangle top lies in the area of 1.3500, which, together with the May 13 high, at the 1.3540 area, is likely to close the path towards May's peak, right above 1.3650. On the downside, the triangle's bottom is around 1.3400. Below here, last week's low, at 1.3365, and the May 15 low in the 1.3300 area will come into focus.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.11% | -0.10% | 0.14% | 0.25% | 0.14% | 0.55% | 0.40% | |
| EUR | -0.11% | -0.19% | 0.00% | 0.14% | 0.08% | 0.46% | 0.27% | |
| GBP | 0.10% | 0.19% | 0.21% | 0.33% | 0.21% | 0.63% | 0.45% | |
| JPY | -0.14% | 0.00% | -0.21% | 0.13% | 0.02% | 0.44% | 0.25% | |
| CAD | -0.25% | -0.14% | -0.33% | -0.13% | -0.11% | 0.30% | 0.12% | |
| AUD | -0.14% | -0.08% | -0.21% | -0.02% | 0.11% | 0.36% | 0.23% | |
| NZD | -0.55% | -0.46% | -0.63% | -0.44% | -0.30% | -0.36% | -0.18% | |
| CHF | -0.40% | -0.27% | -0.45% | -0.25% | -0.12% | -0.23% | 0.18% |
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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
- AUD/USD consolidates around 0.7175 while investors seek fresh updates on US-Iran negotiations.
- Iran warns that the Israel-Lebanon conflicts and US naval blockade are evidence of US noncompliance with the ceasefire.
- Australian Q1 GDP data is expected to arrive at 0.5%.
The AUD/USD pair trades in a tight range around 0.7175 during the European trading session on Monday. The Aussie pair consolidates as uncertainty regarding the United States (US)-Iran negotiations toward a permanent peace deal has escalated.
Financial market participants have turned slightly cautious towards the US-Iran peace deal finalization, following amendments from US President Donald Trump in the potential deal. Trump said in an interview with Fox News over the weekend that neither he wants Iran to develop nuclear weapons nor to purchase them. Trump added that negotiations with Iran remain ongoing and Washington is in no rush for a deal.
Meanwhile, the exchange of attacks between Israel and Lebanon has also raised concerns over the likelihood of an early deal.
During the day, Iran’s Parliament Speaker Mohammad Bagher Ghalibaf has warned through a post on X that the United States (US) naval blockade on Iranian sea ports and Israeli attacks on Lebanon are clear evidence of US noncompliance with the ceasefire.
On the domestic front, investors await the Q1 Gross Domestic Product (GDP) data, which will be released on Wednesday. The Q1 Australian GDP data is expected to arrive lower at 0.5% from the previous reading of 0.8%.
AUD/USD technical analysis
AUD/USD trades flat at around 0.7176 as of writing. The Aussie pair has been consolidating for over two weeks in a tight range between 0.7080 and 0.7200. The sideways 20-period exponential moving average (EMA) at 0.7167 also indicates indecisiveness among investors.
The Relative Strength Index (RSI) near 52 is close to neutral, hinting at a sharp volatility contraction.
On the downside, 0.7150 is the immediate support, with a break below could expose the pair to the May 19 low at 0.7080. Looking up, the pair could aim to revisit the four-year high at 0.7277 if it manages to break above the May 29 high at 0.7200.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
Gross Domestic Product (QoQ)
The Gross Domestic Product (GDP), released by the Australian Bureau of Statistics on a quarterly basis, is a measure of the total value of all goods and services produced in Australia during a given period. The GDP is considered as the main measure of Australian economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a rise in this indicator is bullish for the Australian Dollar (AUD), while a low reading is seen as bearish.
Read more.Next release: Wed Jun 03, 2026 01:30
Frequency: Quarterly
Consensus: 0.5%
Previous: 0.8%
Source: Australian Bureau of Statistics
The Australian Bureau of Statistics (ABS) releases the Gross Domestic Product (GDP) on a quarterly basis. It is published about 65 days after the quarter ends. The indicator is closely watched, as it paints an important picture for the economy. A strong labor market, rising wages and rising private capital expenditure data are critical for the country’s improved economic performance, which in turn impacts the Reserve Bank of Australia’s (RBA) monetary policy decision and the Australian dollar. Actual figures beating estimates is considered AUD bullish, as it could prompt the RBA to tighten its monetary policy.
MUFG’s Halpenny argues that the Bank of Japan (BoJ) is likely to hike 25 bps on 16 June, with markets pricing around an 80% chance. He notes that weaker Tokyo inflation partly reflects government measures, while persistent Japanese Yen (JPY) weakness despite record Ministry of Finance (MoF) intervention suggests BoJ action could help curb further selling alongside Oil and yield developments.
BoJ seen tightening as yen stays weak
"The BoJ pricing for its meeting on 16th June is a little less than for the ECB – the implied probability is around 80% for a 25bp hike. But action remains likely, and even though inflation has eased, the risk of being behind the curve is rising."
"Weaker inflation in Tokyo in part reflected government measures while the continued weakness of the yen is telling after the MoF confirmed a record one-month JPY 11.7trn worth of yen buying between 28th April and 27th May."
"Action would help to curtail yen selling although developments in the Middle East, crude oil prices and global yields will be key as well."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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