USD/CAD trades on the front foot on Tuesday, supported by a firmer US Dollar (USD), while trade tensions between the United States (US) and Canada and diverging Federal Reserve (Fed) and Bank of Canada (BoC) policy expectations weigh on the Canadian Dollar (CAD).

Brown Brothers Harriman’s (BBH) Elias Haddad reports EUR/USD is trading heavy just below 1.1600 as Eurozone August Consumer Price Index (CPI) confirmed easing underlying inflation, with core and services measures slowing.

Rabobank’s Jane Foley examines Japanese Yen (JPY) weakness amid Prime Minister Sanae Takaichi’s preference for low interest rates, US Treasury pressure on BoJ policy and recent coordinated FX intervention.

The Euro (EUR) trades 0.2% lower to near 1.1593 against the US Dollar (USD) during the European trading session on Tuesday.

TD Securities highlights asymmetric upside risk in USD/CAD as US–Canada trade tensions escalate.

The New Zealand Dollar (NZD) is down 0.35%, marginally below 0.5900 against the US Dollar (USD) during the European trading session on Tuesday.

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight that EUR/USD has bounced strongly from 1.1573 after an excessive selloff, but momentum remains subdued. Intraday, the Euro (EUR) is expected to hold within 1.1595–1.1640.

The US Bureau of Labor Statistics has a busy week, releasing relevant employment data. It will start on Tuesday with the publication of the July Job Openings and Labor Turnover Survey (JOLTS) at 14:00 GMT.

Commerzbank’s Michael Pfister highlights that Brazil’s very high real interest rates have not prevented solid GDP growth, as expansionary fiscal policy has offset restrictive monetary conditions. With elections approaching and spending rising again, he warns that budget consolidation may be slow.

The US Dollar (USD) is up 0.15% to near 160.00 against the Japanese Yen (JPY) during the European trading session on Tuesday.

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann report that USD/JPY has pulled back from 160.20, with intraday price action expected to stay between 159.50 and 160.15 as upward pressure eases.

Eurozone’s preliminary Harmonized Index of Consumer Prices (HICP) data for August arrives at 3.3% Year-on-Year (YoY), as expected, higher than the previous reading of 2.9%.

Attention shifts to Tuesday’s release of the August ISM Manufacturing Purchasing Managers Index (PMI), one of the most closely followed indicators of activity in the US manufacturing sector and an important barometer of the broader economy.

The GBP/JPY cross edges higher on Tuesday, though it lacks bullish conviction and remains confined within a familiar range held over the past week or so. Spot prices currently trade around mid-216.00s amid a broadly weaker Japanese Yen (JPY).

The Euro (EUR) trades subduedly at around 185.50 against the Japanese Yen (JPY) during the European trading session on Tuesday. The major currency is mildly under pressure ahead of the Eurozone flash Harmonized Index of Consumer Prices (HICP) data for August, which will be published at 09:00 GMT.

ING’s Francesco Pesole expects the Reserve Bank of New Zealand to raise rates by 25bp to 2.75%, with markets fully pricing the move. He argues that current market pricing for further tightening looks too hawkish unless the RBNZ lifts its rate path significantly.

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann observe that AUD/USD has corrected from 0.7208 but is now rebounding, with intraday trade expected between 0.7155 and 0.7180.

The NZD/USD pair attracts some sellers following a modest intraday uptick to the 0.5930 region and languishes near the lower end of its daily range during the early European session on Tuesday.

Michael Wan at MUFG notes continued dispersion in Asia FX, with USD/JPY trading just below 160. NHK reports US officials urging Japan to raise interest rates, while markets already price a 92% chance of a September Bank of Japan (BoJ) hike.

The Australian Dollar (AUD) trades marginally lower at around 0.7164 against the US Dollar (USD) during the European trading session on Tuesday.

Silver (XAG/USD) remains practically flat on Tuesday, holding most of Friday’s losses and trading at $66.60 at the time of writing, with price action contained within the previous day’s range.

The EUR/GBP cross loses traction to near 0.8570 during the early European trading hours on Tuesday. The Euro (EUR) edges slightly lower following German Retail Sales data.

USD/CHF appreciates after registering losses in the previous day, trading around 0.8100 during the Asian hours on Tuesday. The pair remains steady despite stronger-than-expected Swiss economic data.

The US Dollar (USD) trades slightly higher to near 1.3863 against the Canadian Dollar (CAD) during the European trading session on Tuesday. The Loonie pair remains broadly as ongoing trade tensions between the United States (US) and Canada have put the Canadian Dollar under pressure.

The Euro (EUR) nudges lower against the US Dollar (USD) on Tuesday, giving away some of Monday's gains, with the EUR/USD pair hovering just above 1.1600, following rejection at the 1.1620 area.

Commerzbank strategists argue that stronger-than-expected Q2 2026 Gross Domestic Product (GDP) at 7.8% yoy reinforces India’s relative growth advantage and reduces expectations of Reserve Bank of India (RBI) easing.

The Indian Rupee (INR) gains sharply at open against the US Dollar on Tuesday. The USD/INR pair slumps to near 94.88, the lowest level seen in two months, on likely Reserve Bank of India (RBI) intervention, stronger-than-expected Q2 Gross Domestic Product (GDP) data and a narrowed Fiscal Deficit.

The GBP/USD pair trades in negative territory around 1.3545 during the early European trading hours on Tuesday. Federal Reserve (Fed) Chair Kevin Warsh’s hawkish remarks at the Jackson Hole symposium underpin the US dollar (USD) against the British Pound (GBP). 

The USD/JPY pair edges higher to around 159.85 during the early European trading hours on Tuesday.

The EUR/USD pair struggles to capitalize on the overnight bounce from the 100-day Simple Moving Average (SMA), near the 1.1575-1.1580 region, or a one-and-a-half-week low, and drifts lower during the Asian session on Tuesday.