USD/CHF trims part of its earlier gains on Friday as the US Dollar (USD) struggles to regain momentum following Thursday’s sharp sell-off, which was driven by suspected intervention by Japanese authorities to curb excessive weakness in the Japanese Yen (JPY).

ING’s Chris Turner describes USD/JPY’s rollercoaster, with a 3% drop on reported Japanese intervention followed by a near 2% rebound. He notes that coordinated Fed-Treasury involvement was key in January but now sees the story as having moved on.

NZD/USD trades around 0.5860 on Friday, down 0.33% on the day, as investors react to another deterioration in Chinese business activity.

GBP/JPY extends its slide on Friday as suspected intervention by Japanese authorities rattles the FX market and lifts the Yen across the board, pushing the cross further away from the multi-year high of 219.16 touched earlier this month.

USD/JPY trades sharply lower near the 159.50 area on Friday as the Japanese Yen (JPY) strengthens following intervention by Japanese authorities and a relatively hawkish Bank of Japan (BoJ) policy announcement.

Brown Brothers Harriman’s (BBH) Elias Haddad reports that USD/JPY briefly fell about five big figures to 158.00 on suspected Japanese intervention before rebounding near 161.00 and then dropping again.

The Euro (EUR) weakens against the US Dollar (USD) on Friday as short-covering in the Greenback following the previous day’s sharp sell-off pushes EUR/USD back below 1.1500. At the time of writing, the pair trades around 1.1488, easing from the six-week high of 1.1537 touched on Thursday.

USD/CAD trades around 1.4045 on Friday at the time of writing, recovering from a two-week low hit on Thursday at 1.3991.

BNY’s Geoff Yu highlights that the Japanese Yen (JPY) entered the latest Bank of Japan (BoJ) decision and suspected intervention with weak flow momentum and lighter positioning, even as investors remained net long JPY and net short USD/JPY.

The Japanese Yen (JPY) posts moderate losses against the US Dollar (USD) on Friday, with the USD/JPY trading just above 160.00 at the time of writing, after whipsawing within a rough 240-pip range between 158.60 and 161.00 earlier on the day.

AUD/USD trades around 0.7030 at the time of writing on Friday, little changed on the day after Thursday's strong rally.

EUR/JPY trades around 184.00 on Friday, stabilizing after the sharp volatility seen on Thursday. The cross plunged to near 182.00 from around 187.00, losing almost 500 pips within minutes after what appears to have been another intervention by Japanese authorities in the foreign exchange market.

TD Securities’ Alex Loo notes that despite Governor Ueda’s hawkish tone, the Japanese Yen reaction was muted and the BoJ kept its policy rate at 1%.

The British Pound (GBP) is down against its major currency peers, trading marginally lower at around 1.3444 against the US Dollar (USD) during the European trading session on Friday.

MUFG analysts use a textual sentiment framework on the latest Bank of England (BoE) decision, finding a hawkish hold in Monetary Policy Committee (MPC) member contributions but a more balanced tone from Governor Bailey’s press conference.

Annual Harmonized Index of Consumer Prices (HICP) in the Eurozone, as measured by changes in the prices of a representative basket of goods and services in the European Monetary Union, rises at a stronger pace of 3.2% in July, faster than 2.9% estimates and 2.8% in June.

The British Pound (GBP) faces roadblocks in extending the early recovery against the Japanese Yen (JPY) above 216.33 during the European trading session on Friday.

The USD/CAD pair seesaws between tepid gains/minor losses through the early European session on Friday, consolidating its recent losses to the lowest level since June 17, touched the previous day.

Here is what you need to know on Friday, July 31:

MUFG’s Derek Halpenny and Abdul-Ahad Lockhart note that the Japanese Yen surged as USD/JPY dropped from 163.00 to 158.00, in a move they attribute to probable Ministry of Finance intervention during New York trading.

The New Zealand Dollar (NZD) ticks lower against the US Dollar (USD) on Friday, but remains steady near eight-week highs at 0.5885, with downside attempts contained above a previous resistance area at 0.5860 so far.

The US Dollar (USD) gives back some of its early gains against the Japanese Yen (JPY), but is still 0.5% higher at around 160.30 during the European trading session on Friday.

DBS Group Research economist Radhika Rao notes India’s onshore markets are being pulled between higher Oil prices and improving capital flows.

Silver price (XAG/USD) declines after two days of gains, trading around $58.10 per troy ounce during the early European hours on Friday. The non-yielding white metal is facing notable challenges amid expectations for tighter Federal Reserve (Fed) monetary policy.

The Euro (EUR) nudges lower against the US Dollar (USD) on Friday, but remains near six-week highs, holding well above 1.1500 so far, on track for a 1.3% rally this week, its best weekly performance in nearly four months.

The AUD/USD pair gathers strength to near 0.7035, the highest since June 17, during the early European session on Friday. Expectations that the Reserve Bank of Australia (RBA) might implement another interest rate hike this year underpin the Australian Dollar (AUD) against the US Dollar (USD). 

ING’s Francesco Pesole writes that EUR/USD broke above 1.150 as broad Dollar weakness persisted, even as the Euro underperformed some G10 peers despite stronger Eurozone data.

USD/CHF gains ground after two days of losses, trading around 0.8070 during the Asian hours on Friday.

Commerzbank’s Volkmar Baur reports that Japan’s Ministry of Finance intervened in FX markets, with apparent US Treasury support, to address a weak Japanese Yen as Tokyo inflation stabilises around 2% with upside risks.

The Euro (EUR) is trading practically flat against the British Pound (GBP) on Friday, as bears kept testing the base of the ascending trendline from mid-July highs, around 0.8555, following Thursday’s reversal from 0.8585 highs.