Scotiabank strategists Shaun Osborne and Eric Theoret report the Japanese Yen (JPY) is slightly firmer, outperforming G10 peers despite broad US Dollar (USD) strength, as stronger PMIs signal improving growth. They see signs of exhaustion in USD/JPY’s advance with yield spreads stabilizing.

EUR/GBP trades little changed on Tuesday after a sharp slide the previous day, triggered by UK Prime Minister Keir Starmer's resignation, which lifted the British Pound (GBP) across the board.

The USD/JPY pair is trading in a neutral zone on Tuesday as investors digest the latest United States (US) Purchasing Managers Index (PMI) figures and recent ADP employment data, awaiting a stronger catalyst from Federal Reserve (Fed) commentary.

The Pound Sterling dives over 0.40% on Tuesday as risk appetite shifts sour, as the recently sworn-in MP Andy Burnham prepares to succeed Keir Starmer, who lasted two years at the job. At the time of writing, the GBP/USD trades at 1.3195, after reaching a daily high of 1.3259.

USD/CAD trades around 1.4190 on Tuesday at the time of writing, up 0.25% on the day and extending a four-day winning streak to its highest level since April 7.

The Euro (EUR) extends losses against the US Dollar (USD) on Tuesday, with EUR/USD slipping below the 1.1400 mark, a support level that had held since June 2025.

Scotiabank strategists Shaun Osborne and Eric Theoret note the British Pound (GBP) is softer versus the US Dollar (USD) after mildly disappointing Purchasing Managers' Index (PMI) and CBI data, with market reaction muted.

Scotiabank strategists Shaun Osborne and Eric Theoret note the Canadian Dollar (CAD) retains a soft undertone despite a first modest gain versus the US Dollar (USD) in eight sessions, helped by firmer May Consumer Price Index (CPI) and steadier US–Canada spreads.

TD Securities’ Global Strategy Team reports that June Eurozone PMIs confirm a divergence between stabilizing German manufacturing and still weak French services.

TD Securities’ Global Strategy Team expects Australian headline Consumer Price Index (CPI) to ease to 4.2% year-on-year in May, helped by lower transport and recreational prices.

The Euro (EUR) extends losses on Tuesday, with the US Dollar (USD) buoyed by rising hopes of Federal Reserve (Fed) tightening later this year and a cautious market mood, amid the uncertainty surrounding the US-Iran trade deal.

BNY’s Geoff Yu highlights rising Japanese Yen intervention risk after Finance Minister Satsuki Katayama’s call with U.S. Treasury Secretary Scott Bessent. Japan and the U.S. reaffirmed a shared stance that bold FX action remains possible, even as Katayama avoided commenting on current levels.

The Australian Dollar (AUD) underperforms its currency peers, trading 0.8% lower at around 0.6945 against the US Dollar (USD) during the European session on Tuesday.

The New Zealand Dollar (NZD) faces significant selling pressure against its major currency peers during the European session on Tuesday, trading 0.4% lower at around 0.5690. The pair is under pressure as hawkish Federal Reserve (Fed) bets have weakened the appeal of riskier assets.

The British Pound (GBP) pares Monday’s gains against the Japanese Yen (JPY) on Tuesday, weighed down by higher intervention risks and downbeat UK business activity figures.

Societe Generale’s Kenneth Broux and colleagues highlight softer Eurozone PMI price data and a dovish tone from European Central Bank (ECB) President Lagarde as key drivers for EUR/USD. They see the 1.13-handle as in focus, with support around 1.1390 and 1.1350.

The Japanese Yen (JPY) is picking up against the US Dollar (USD) on Tuesday after hitting lows a few pips above the 40-year low of 161.95 on Monday.

The GBP/USD pair adds to its modest intraday losses and touches a fresh daily low, around the 1.3215-1.3210 region during the first half of the European session.

European Central Bank (ECB) Chief Economist Philip Lane said at the European Parliament in Brussels that inflationary pressures in the Eurozone economy could remain above 2% for quite some time despite peace prospects between the United States (US) and Iran.

Deutsche Bank’s Early Morning Reid highlights that the Japanese Yen remains under pressure, trading close to 40‑year lows versus the US Dollar.

The Canadian Dollar (CAD) is facing renewed pressure as USD/CAD extends its rally to 14-month highs, with Societe Generale noting a decisive shift in momentum and RBC highlighting that domestic inflation remains skewed by volatile energy costs.

The USD/CHF pair trades with a positive bias for the fifth straight day on Tuesday, near its highest level since November 2025, with bulls awaiting sustained strength above the 0.8100 mark before positioning for further gains.

Eurozone’s flash Manufacturing Purchasing Managers’ Index (PMI) arrives at 51.3 in June, higher than 51.2 estimates, but lower than 51.6 in May. The overall business activity has improved significantly, but remained in the contraction phase.

Eurozone HCOB Composite PMI above expectations (49.1) in June: Actual (49.5)

Eurozone HCOB Manufacturing PMI above forecasts (51.2) in June: Actual (51.3)

Eurozone HCOB Services PMI above expectations (48.1) in June: Actual (48.9)

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note sharp intraday swings in USD/JPY after it spiked to 161.92 then fell to 161.06 before closing at 161.54.

DBS Group Research economist Philip Wee argues that Sir Keir Starmer’s resignation and the upcoming Labour Party leadership contest should not trigger a repeat of the 2022 UK mini-budget crisis for the British Pound.

EUR/USD held ground after registering modest losses in the previous day, trading around 1.1430 during the European hours on Tuesday. However, the pair withdraws its daily gains following the release of HCOB Purchasing Managers Index (PMI) data from Germany.

The GBP/JPY cross struggles to capitalize on the previous day's solid intraday bounce from the vicinity of a one-month trough, touched last week, and edges lower on Tuesday. Spot prices, however, lack bearish conviction and currently trade just below the 214.00 mark amid mixed fundamental cues.