The British Pound (GBP) strengthens against the Japanese Yen (JPY) on Tuesday as easing tensions in the Middle East support risk-sensitive assets, while the Japanese Yen comes under pressure after Reuters reported that the Bank of Japan (BoJ) is considering pausing its bond-tapering program.

Scotiabank’s Analyst Team describes USD/CAD as little changed near the top of its year-to-date range, with conditions favouring at least a minor Canadian Dollar rebound as risk sentiment improves.

National Bank Canada's (NBC) Stéfane Marion and Kyle Dahms observe that the Euro has softened alongside the broader USD rally, even as Eurozone inflation has reaccelerated and pushed the ECB toward a more hawkish stance.

Rabobank's Senior FX Strategist Jane Foley discusses how prospective Bank of Japan (BoJ) policy shifts on JGB purchases and rate hikes could influence the Japanese Yen (JPY).

BNP Paribas strategists argue that Europe is emerging as an alternative safe haven, with the Euro gaining ground as a global safe asset.

National Bank Canada's (NBC) Stéfane Marion and Kyle Dahms highlights that the Canadian Dollar (CAD) has been the weakest reserve currency recently, with USD/CAD back near 1.39. They link this to Canada’s deteriorating real growth, negative Canada–U.S. 2‑year spreads and falling Gold prices.

BNY’s Bob Savage reports that Bank of Japan (BoJ) officials are considering pausing further reductions in JGB purchases after March 2027, keeping buying near ¥2.1tn as the balance sheet shrinks via maturities. The June meeting is expected to deliver a rate hike to 1.0%.

The Australian Dollar (AUD) trades lower against its major currency peers during the European trading session on Tuesday. The Aussie Dollar is up 0.15% against the US Dollar (USD) as the market sentiment turns risk-on.

Brown Brothers Harriman’s (BBH) Elias Haddad observes that AUD/USD is consolidating around 0.7050, with yield spreads pointing to downside risks below 0.7000.

The Japanese Yen (JPY) continues to face strong headwinds, trading back above the critical 160.00 threshold against the US Dollar despite improving domestic fundamentals.

GBP/USD trades around 1.3390 on Tuesday at the time of writing, up 0.42% on the day, mainly benefiting from a weaker US Dollar (USD) following confirmation that direct attacks between Israel and Iran have ceased.

The Euro (EUR) trades lower against the British Pound (GBP) on Tuesday, with bears testing support at two-week lows in the area of 0.8630, and bearish momentum building up.

The Euro (EUR) ticks up for the second consecutive day against the US Dollar (USD) on Tuesday to pare some of last week’s losses.

Germany 10-y Bond Auction: 2.98% vs previous 3.16%

Lee Hardman at MUFG observes that the Japanese Yen remains under pressure as USD/JPY trades back above 160.00, with markets almost fully pricing a BoJ rate hike at the June 16 meeting.

USD/JPY trades around 160.15 on Tuesday at the time of writing, remaining close to its highest level since April 30 despite a broadly neutral intraday performance.

UOB’s Quek Ser Leang and Lee Sue Ann describe EUR/USD price action as short-term consolidation between 1.1505 and 1.1555 after last week’s sharp drop.

USD/CAD halts its four-day winning streak, pulling back after reaching a two-month high of 1.39613 in the previous day and trading around 1.3940 during the European hours on Tuesday.

The US Dollar (USD) posts marginal losses against the Swiss Franc (CHF) on Tuesday, with bulls capped near the 0.8000 psychological level. Downside attempts, however, remain contained above 0.7965, so far keeping the pair steady at two-month highs for now.

XAG/USD extends its gains for the second consecutive day, trading around $68.60 per troy ounce during the European hours on Tuesday. Silver is retaining a bearish near-term bias as it holds below both the nine-day and 50-day Exponential Moving Averages (EMAs).

Commerzbank’s Volkmar Baur highlights that USD/JPY has climbed back above 160, near multi-decade highs, even as Japan’s current account surplus has improved to its highest level since 1996 and 5.6% of GDP.

UOB’s Quek Ser Leang and Lee Sue Ann see AUD/USD stabilising intraday between 0.7015 and 0.7065 after a brief dip, but retain a negative 1–3 week bias.

The British Pound (GBP) posts moderate gains against the Japanese Yen (JPY) on Tuesday, supported by a modest improvement in risk sentiment.

NZD/USD remains stronger for the second successive day, trading around 0.5830 during the early European hours on Tuesday.

The Australian Dollar (AUD) posts moderate gains against the US Dollar (USD) on Tuesday, regaining some of the ground lost last week, although it remains at its lowest level in nearly two months. News that Israel and Iran halted hostilities has triggered a mild relief rally.

Here is what you need to know on Tuesday, June 9:

The GBP/USD pair trades 0.26% higher at around 1.3375 during the European trading session on Tuesday. The Cable gains as the US Dollar (USD) declines amid expectations that the United States (US) could reach a deal with Iran soon.

UOB’s Quek Ser Leang and Lee Sue Ann describe USD/JPY as range-bound intraday between 159.90 and 160.40 after a brief spike and reversal, but maintain a slightly positive multi-day stance.

The US Dollar (USD) trades moderately lower against the Canadian Dollar (CAD) on Tuesday, pulling back from levels a few pips shy of the year-to-date peak, at 1.3966.

The EUR/GBP cross holds negative ground near 0.8640 during the early European trading hours on Tuesday. The Euro (EUR) remains weak against the British Pound (GBP) despite the stronger German Industrial Production.