Forex News

BNY’s Geoff Yu notes Copper is surging as tighter availability meets uncertainty over United States (US) tariffs, with shipments to the United States draining inventories elsewhere and constrained mine output leaving the market exposed to squeezes. Yu highlights a two‑month high near $14,000/ton in London, steep LME backwardation signaling short‑term scarcity, and year‑to‑date gains driven by trade policy and energy transition themes.

Tariffs collide with scarce metal

"Copper is surging as tighter availability collides with uncertainty over U.S. tariffs."

"Copper markets were in focus as the metal climbed to a two-month high of almost $14,000/ton in London, with traders watching swelling U.S. inventories ahead of an expected tariff decision by President Trump."

"More than 200,000 tons arrived at U.S. ports in July, the largest monthly inflow in available shipping data, tightening supply elsewhere and helping push the LME market into a steeper backwardation that signals short-term scarcity."

"Shipments to the U.S. have drained inventories elsewhere, while constrained mine output leaves the market vulnerable to further squeezes."

"Tariffs may redirect flows, but they cannot create more metal."

"Copper has risen about 12% this year on trade policy speculation and optimism tied to the energy transition and artificial intelligence infrastructure, although some Chinese demand has softened as prices have remained elevated."

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

Rabobank’s Senior FX Strategist Jane Foley highlights that Japanese authorities benefited from the post-FOMC US Dollar (USD) drop, which eased pressure on the Japanese Yen (JPY). The report explains how speculative long USD positions were unwound after the July 29 Fed meeting and how Japan’s Ministry of Finance intervention in USD/JPY amplified the move. It also details US Treasury cooperation via the FIMA Repo Facility to avoid forced Treasury sales.

Japanese and US authorities shape pair

"From the point of view of the Japanese authorities, the decline in the USD’s value that followed the Fed meeting last week was fortuitous, if not overdue. Until late last week the MoF had not intervened in the FX market in support of the JPY since late May and the strength of the greenback in this period may explain why."

"That said, the USD did not react well to the July 29 FOMC meeting. While surveys of economists had correctly stressed little risk of a rate hike, some market participants were betting that Fed Chair Warsh would deliver a policy tightening in order to prove his inflation fighting credibility. These positions were subsequently unwound."

"Indeed, CFTC speculators’ data highlight that in the approach to that meeting long USD positions had been built to their highest levels since September 2024, suggesting that profit-taking in the USD was almost inevitable. The move lower in the USD was accentuated by the intervention in USD/JPY by Japan’s Ministry of Finance."

"As we discussed on this page yesterday, a key question regarding what drove the US Treasury to intervene with Japan’s MoF in support of JPY is ‘what was in it for them?’ By making the Fed’s Foreign and International Monetary Authorities (FIMA) Repo Facility available, the MoF was able to temporarily exchange US treasuries for USD."

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

• GBP/JPY edges higher as the Japanese Yen loses ground following its recent sharp rally.
• MUFG says coordinated intervention may support the Yen temporarily but cannot reverse its broader weakness without a change in fundamentals.
• The cross holds below the 100-day SMA and tests the 200-day SMA, keeping the near-term outlook bearish.

GBP/JPY rises on Tuesday as the Japanese Yen (JPY) gives back part of its recent rally, which was driven by coordinated intervention from Tokyo and Washington.

At the time of writing, the cross trades around 211.55, up 0.20% on the day.

Yen support from US intervention seen as limited and time-buying

Analysts at MUFG/BTMU argue that the recent bout of joint FX intervention offers only partial and temporary relief for the Yen. They stress that, "on balance, we expect US intervention to support the [Y]en to remain relatively small in scale," even if coordinated action with Japan helps steady the currency in the near term. In their view, "while joint intervention may prove more effective at helping to provide support for the [Y]en in the near-term, we still believe that it can only buy time." MUFG/BTMU conclude that, ultimately, "there will need to be a change in fundamentals as well to encourage a sustainable reversal of the [Y]en weakening trend that has been in place over the last five years."

Despite Tuesday’s rebound, the near-term technical picture for GBP/JPY has turned bearish. The recent sell-off pushed the cross decisively below the 100-day Simple Moving Average (SMA) for the first time since April 2025, with the pair now testing the 200-day SMA.

Technical analysis

On the daily chart, GBP/JPY trades below the 100-day Simple Moving Average (SMA) at 214.45 and hovers around the 200-day SMA at 211.75, keeping the near-term bias tilted to the downside.

The Relative Strength Index (RSI) near 30 hints at oversold conditions and the Moving Average Convergence Divergence (MACD) remains deeply negative, reinforcing selling pressure.

On the topside, initial resistance is located at the 100-day SMA at 214.45, followed by the horizontal barrier at 216.50, with a stronger cap emerging near 220.

On the downside, the 200-day SMA at 211.75 marks first support ahead of the 210 level, with deeper floors at 207 and 205, where bears could start to lose momentum if the RSI slips further into oversold territory.

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

• Scott Bessent says a deal with Iran to reopen the Strait of Hormuz could come as soon as Tuesday or Wednesday.
• The US Treasury Secretary expects energy prices to "settle back down" if an agreement is reached.
• WTI US Oil drops more than 3% following his remarks.

US Treasury Secretary Scott Bessent said in a CNBC interview on Tuesday that a deal with Iran to reopen the Strait of Hormuz could be reached as soon as Tuesday or Wednesday. He added that he expects energy prices to "settle back down".

Markets reacted swiftly to the comments. West Texas Intermediate (WTI) Oil fell 3.29% on the day to trade around $76.20 per barrel at the time of press, after hitting a more than three-week low of $75.68.

ING’s commodities team points out that European gas prices fell, with TTF down modestly, as the market digests storage and demand trends. They stress that while storage injections are slow and the market is tight ahead of the 2026/27 winter, absolute storage volumes and lower EU gas demand versus 2021 leave conditions more comfortable than during the earlier crisis period.

TTF eases as storage concerns grow

"European gas prices also came under pressure yesterday, although not to the same extent as oil, with TTF settling 2.65% lower on the day."

"There are growing concerns in Europe over storage levels and the slow injections we are seeing, leaving the region more vulnerable as we head into the 2026/27 winter."

"While storage is only a little above 57% full — below the utilisation seen in 2021 — in absolute volume terms it still sits just above 2021 levels."

"It’s also worth pointing out that EU gas demand is considerably lower now than it was in 2021."

"So, while the gas market is admittedly tight, it’s still quite a bit more comfortable than it was in 2021."

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

TD Securities strategists expect US JOLTS job openings to fall to 7.0 million in June from 7.594 million in May, below the 7.504 million consensus forecast, as the recent increase appears difficult to sustain. They expect the data to move closer to softer private-sector hiring indicators. This would contrast with July’s stronger-than-expected ISM Manufacturing reading, which rose to 55.6 from 53.3 and reached its highest level since mid-2022.

JOLTS expected to retreat as manufacturing activity accelerates

"We expect June JOLTS job openings will decline back down to 7,000k from 7,594k in May (cons: 7,504k). The recent surge in openings is likely unsustainable. We expect JOLTS will begin moving back towards private sector indicators like Indeed, which shows a more subdued trend in hiring."

"ISM manufacturing exceeded consensus expectations, jumping to 55.6 in July from 53.3 in June (TD: 54.7, cons: 53.9), the highest level since mid-2022."

"Large increases in production, employment, and supplier deliveries were the drivers behind the topline beat. Inventories was the only component that posted a decline."

"Prices paid fell close to 2pts to 71.1 — largely undoing its post-war increase, despite oil prices moving higher on net in July."

"AI and defense industry demand were the main drivers of optimism among respondent comments. Already-strained supply chains from the Iran conflict could find it difficult to keep up. Respondents continue to voice concerns about geopolitical tensions and higher energy costs, all while dealing with changing tariff polices."

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

• EUR/USD finds support at the 1.1500 area on Tuesday after a pullback from 1.1560 highs.
• Uncertainty surrounding the US-Iran conflict and caution ahead of the release of US jobs data are keeping US Dollar volatility contained.

The Euro (EUR) posts marginal gains against the US Dollar (USD) on Tuesday as Monday’s reversal from three-week highs at 1.1560 has been contained at 1.1500 so far. A mild risk appetite on hopes of Iran negotiations and investors’ cautiousness ahead of the release of key US labour indicators are providing some support to the pair on Tuesday.

The Middle East conflict is in a standstill with the US and Iran holding fire so far, but each nation is sending contradictory messages. US President Donald Trump urged Tehran to sign a peace deal with the US and reopen the Strait of Hormuz. Iranian authorities, in turn, have denied any contacts with the US and reiterated their threat to the US Navy if the blockade of Iranian ports continues.

US employment figures in focus

Apart from that, the US JOLTS Job Openings and Factory Orders figures will provide some distraction from the geopolitical scenario and set the tone for a string of key US labour reports due later in the week. The main focus this week will be the Nonfarm Payrolls report, due on Friday, which is expected to provide further clues about the Federal Reserve’s (Fed) near-term monetary policy.

According to TD Securities, the recent strength in US labour demand is unlikely to persist. The bank expects that "June JOLTS job openings will decline back down to 7,000k from 7,594k in May (cons: 7,504k)," arguing that "the recent surge in openings is likely unsustainable."

Regarding the pair's near-term outlook, FX analysts at Rabobank warn that “the market continues to display a reluctance to rebuild EUR positions toward last year’s longs given uncertainty about how higher energy prices will impact the growth and inflation outlook in the Eurozone.” Against this backdrop, the bank foresees "choppy ranges, mostly within the EUR/USD 1.14/1.15 level likely to persist in the coming months,” as investors remain cautious about committing to fresh Euro exposure.

BNY's Geoff Yu reports that Saudi Aramco sees no material operational or financial impact from July attacks, with alternative pipelines, storage and export terminals preserving output. CEO Amin Nasser says full 12 million barrels per day capacity remains available and could be ramped up quickly, while Aramco works to expand export flexibility as Strait of Hormuz and Red Sea risks keep Oil market geopolitics elevated.

Saudi capacity underpins Oil supply

"Saudi Aramco has said the July attacks on its assets had no material operational or financial impact, even though some facilities were targeted and there was some interruption."

"Alternative pipelines, storage and export terminals have preserved business continuity despite the disruption around the Strait of Hormuz."

"Chief Executive Officer Amin Nasser declared that the company still has its full 12 million barrels/day of production capacity available and could ramp up within three weeks if requested by the government."

"He added that Aramco is seeking to expand export flexibility as disruption in the Strait of Hormuz continues, including possible upgrades to the East-West pipeline and greater use of Yanbu."

"He also said Red Sea threats have not affected export volumes, while the company continues contingency planning around shipments."

"That is an important reassurance: Saudi supply remains intact, even if geopolitical and shipping risks are still elevated."

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

Brown Brothers Harriman’s (BBH) Elias Haddad reports USD/JPY has fully retraced its prior slump and is testing key resistance at the 200-day moving average near 158.02. Haddad argues that relief rallies should be limited and offer opportunities to sell the cross, as coordinated United States (US)–Japan FX intervention and official warnings impose a firmer ceiling on USD/JPY and raise the cost of resisting a stronger Japanese Yen.

Intervention caps upside in USD/JPY

"USD/JPY retraced all of yesterday’s slump and testing key resistance at its 200-day moving average (158.02). USD/JPY relief rallies should be limited and an opportunity to sell the cross on strength."

"The coordinated US-Japan intervention – and officials’ warning that they stand ready to act gain – significantly raises the cost of fighting a stronger yen and puts a much firmer ceiling on USD/JPY."

"Japan can fund FX intervention (selling USD against JPY) without materially disrupting the US Treasury market."

"First, Japan has access to the Fed’s Foreign and International Monetary Authorities Repo Facility (FIMA) to raise dollar liquidity against its long-term Treasury holdings ($1.05 trillion as of May), rather than selling these securities outright."

"Second, Japan holding of US long-term Treasuries account for less than 3.5% of the total Treasury market. As such, even meaningful sales would have only limited impact on Treasury yields."

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

Qatar's Foreign Ministry spokesperson, Majed Al Ansari, confirms during the European trading session on Tuesday that efforts are ongoing with the United States (US) and Iran to seek a diplomatic resolution. Ansari added, “What is important right now is getting back to the negotiation talks.”

Qatar’s Ansari also confirmed that mediators, including Qatar, Pakistan, and Oman, are coordinating closely to facilitate negotiations and exchange drafts between both sides.

Market reaction

A sharp selling pressure is seen in oil prices after Qatar's confirmation of ongoing efforts to seek a US-Iran diplomatic solution. As of writing, the WTI Oil price trades 0.4% lower at around $78.50.