Scotiabank strategists Shaun Osborne and Eric Theoret highlight renewed weakness in the Japanese Yen (JPY), which is underperforming G10 peers and threatening fresh multi-decade lows as USD/JPY trades at levels last seen in 1986.

ING’s Francesco Pesole reports that the Reserve Bank of New Zealand (RBNZ) raised rates to 2.50%, delivering a more hawkish message than expected and signalling further tightening is likely.

AUD/USD trades under pressure near 0.6920 on Wednesday, even after the US Dollar (USD) held firm amid geopolitical risk and caution ahead of the Federal Open Market Committee (FOMC) Minutes.

EUR/USD treads water above the 1.1400 mark on Wednesday, steadying after coming under selling pressure as traders assess renewed US-Iran tensions after both sides exchanged fire overnight following attacks on commercial ships near the Strait of Hormuz earlier this week.

Rabobank strategists Christian Lawrence and Molly Schwartz note that despite Moody’s downgrade of Mexico to Baa3, 10-year MBono yields have fallen and markets remain relaxed about Mexico’s investment-grade status.

Scotiabank strategists Shaun Osborne and Eric Theoret note the Euro (EUR) is consolidating around the low 1.14s, with mixed G10 performance as markets reassess Oil’s impact on Euro area terms of trade and the European Central Bank’s (ECB) rate path.

BNY’s Geoff Yu reports that the Reserve Bank of New Zealand (RBNZ) raised its Official Cash Rate (OCR) by 25bp to 2.50% to steer inflation back to 2%. The committee still sees further removal of stimulus as likely, though data will guide decisions.

Scotiabank strategists Shaun Osborne and Eric Theoret note that the Canadian Dollar (CAD) has held up well through recent Iran-driven volatility, extending its rebound even as the US Dollar (USD) trades mixed.

USD/JPY edges higher on Wednesday as renewed escalation in the Middle East boosts demand for the US Dollar (USD) and lifts Oil prices, weighing on the Japanese Yen (JPY). At the time of writing, the pair is trading around 162.50, close to 40-year highs.

Brown Brothers Harriman’s (BBH) Elias Haddad reports that the Reserve Bank of New Zealand (RBNZ) delivered a 25 bps hike to 2.50%, largely priced in, triggering an New Zealand Dollar (NZD) rally before gains were trimmed by Middle East tensions.

The Swiss Franc (CHF) nurses minor losses against the US Dollar (USD) on Wednesday but is depreciating nearly 0.7% so far this week.

The British Pound (GBP) is down 0.13% to near 1.3340 against the US Dollar (USD) during the European trading session on Wednesday. The GBP/USD pair faces selling pressure as renewed geopolitical risks have diminished the appeal of riskier assets.

AUD/USD falls to around 0.6920 on Wednesday at the time of writing, down 0.13% on the day after giving back its earlier gains.

Societe Generale’s Kit Juckes argues that Sweden’s strong growth and low inflation contrast with broader G10 dynamics, yet the Krona remains weak. He notes Sweden’s superior debt sustainability and recent data showing robust Gross Domestic Product (GDP) and minimal inflation.

The Canadian Dollar (CAD) trades higher against its major currency peers, with USD/CAD sliding 0.26% to near 1.4160 during the European trading session on Wednesday.

The Euro (EUR) is trading flat against the British Pound (GBP) on Wednesday, with bears contained above 0.8535 yet failing to find acceptance above 0.8650 so far.

MUFG’s Derek Halpenny highlights that implied volatility in GBP/USD has barely moved after Nigel Farage’s decision to resign and recontest his Clacton seat, calling the by‑election a sham with potential further votes if he is sanctioned.

The New Zealand Dollar’s (NZD) rally against the US Dollar (USD) has been short-lived, as the pair returned to sub-0.5700 levels during the European session after being rejected at the 0.5725 area earlier in the day.

Germany 10-y Bond Auction up to 3.09% from previous 2.98%

The Euro (EUR) shows marginal losses against the US Dollar (USD) on Wednesday and has returned to levels just above 1.1400 during the European trading session after rejection at 1.1430.

Silver price (XAG/USD) extends its losses for the third consecutive day, trading around $58.30 per troy ounce during the European hours on Wednesday. The non-yielding white metal struggled as renewed Middle East escalations threatened the interim United States (US)-Iran peace deal.

The Australian Dollar (AUD) gives back its early gains and turns lower to near 0.6915 against the US Dollar (USD) during the European trading session on Wednesday.

The British Pound (GBP) has resumed its broader uptrend against the Japanese Yen (JPY) on Wednesday, with price action drawing closer to the 217.00 level and the all-time high of 217.22, on the bulls’ focus.

Here is what you need to know on Wednesday, July 8:

United Overseas Bank’s (UOB) Quek Ser Leang highlights that USD/JPY is trading firmly after a sharp rise, with intraday bias tilted higher toward 162.70 while major resistance at 163.00 is expected to hold.

MUFG’s Derek Halpenny reports that the New Zealand Dollar strengthened after the RBNZ raised its policy rate by 25 bps to 2.50%, the first increase since May 2023. He notes OIS had largely priced the move and more hikes, but MUFG expects only two additional increases by March 2027.

The USD/CAD pair loses traction to near 1.4175 during the early European trading hours on Wednesday. Renewed US military strikes against Iran have boosted crude oil prices and provide some support to the commodity-linked Canadian Dollar (CAD) strengthens against the US Dollar (USD).

The Euro (EUR) trades 0.1% higher to near 185.20 against the Japanese Yen (JPY) during the European trading session on Wednesday.

United Overseas Bank’s (UOB) Quek Ser Leang reports that GBP/USD failed to sustain its recent strong run, pulling back after testing resistance near 1.3410.

The US Dollar (USD) appreciates against the Japanese Yen (JPY) for the fourth consecutive day on Wednesday, fuelled by the resumption of hostilities in the Middle East and dovish comments from Bank of Japan (BoJ) officials.