Trading news

The USD/JPY pair jumps to a near three-week high of 157.35 during the early Asian session on Tuesday. The US Dollar (USD) strengthens against the Japanese Yen (JPY) on the stronger-than-expected US economic data. Bank of Japan (BoJ) Governor Kazuo Ueda is set to speak later on Tuesday.

Commerzbank’s Charlie Lay and Moses Lim highlight that the People’s Bank of China has removed the 20% reserve requirement on foreign currency forwards, reducing the cost of short CNY positions. They argue this likely aims to slow CNY appreciation even as USD/CNY and USD/CNH have recently fallen.

GBP/USD fell around one-half of one percent on Monday, briefly sliding to an eleven-week low around 1.3310 in early trade before staging a mid-session recovery to settle close to the 1.3400 handle.

The AUD/JPY recovers from earlier losses, advances some 0.38% on Tuesday even though risk aversion is ruling the financial markets as tensions in the Middle East had risen. Hawkish comments of RBA’s Governor Bullock propel the Aussie Dollar higher. At the time of writing, the cross-trades at 111.62.

Societe Generale’s team examines China’s position in U.S.–Iran tensions, noting that Iran supplies most of China’s Oil but disruptions are manageable.

The Reserve Bank of Australia (RBA) Governor Michelle Bullock crossed the wires on Tuesday March 3 and she was hawkish. Bullock said that data justified February’s rate hike and that Middle East conflict adds to uncertainty.

Argentina Tax Revenue (MoM): 16231.8B (February) vs previous 18337.6B

GBP/JPY rises during the North American session up by 0.24% after recoverying from hitting daily lows of 209.35 amid risk aversion spurred by the Middle East conflict between the US and Iran. At the time of writing, the cross-pair trades at 210.98, about to overcome the 211.00 hurdle.

The Swiss Franc was the standout safe-haven performer on early Monday trading, rallying sharply against the Euro and most major currencies as the US-Israeli military strikes on Iran triggered a broad flight to safety.

The United States, allied with Israel, struck Iran over the weekend, killing Iran’s Supreme Leader, Ayatollah Ali Khamenei.

The Australian Dollar register loses versus the Greenback following over-the-weekend developments, which triggered a flight to safety, weighing on the AUD/USD pair. At the time of writing, it trades at 0.7083, down 0.37%.

NZD/USD trades under pressure on Monday as the New Zealand Dollar (NZD) weakens against the US Dollar (USD) amid escalating geopolitical tensions in the Middle East.

The DXY jumped about 0.85% on Monday, surging through the 98.00 level to touch a session high around 98.75, its strongest reading in five weeks.

ING’s Frantisek Taborsky warns CEE currencies face downside as the Iran-related energy shock hits an import-dependent region. Higher Oil and gas prices and a stronger Dollar are expected to weigh on CEE FX and delay rate-cut plans.

Gold prices advance over 1% on Monday, as geopolitical risks rise due to the escalation of the conflict in the Middle East that sparked an attack from the US and Israel on Iran. At the time of writing, XAU/USD trades at $5,341 after hitting a one-month high of $5,419 earlier in the day.

The Dow Jones Industrial Average is trading down around one-fifth of one percent at the time of writing. The S&P 500 is nearly flat, while the Nasdaq Composite has flipped green for the day.

MUFG’s Senior Currency Analyst Michael Wan argues that sustained Oil price spikes linked to the Iran conflict would pressure most Asian currencies, as regional economies are largely net Oil importers. He highlights KRW, INR and PHP as more vulnerable, while CNH and MYR appear relatively resilient.

The Euro (EUR) edges lower against the US Dollar (USD) on Monday, with EUR/USD sliding more than 1% as investors rotate into the safe-haven Greenback amid escalating geopolitical tensions in the Middle East.

USD/CHF trades around 0.7800 on Monday at the time of writing, up 1.50% on the day, as the US Dollar (USD) extends gains that were already in place before the release of US manufacturing data.

HSBC Asset Management argues several emerging markets are entering a structurally bullish phase, highlighting South Africa’s improving fiscal stance and policy credibility.