Scotiabank strategists Shaun Osborne and Eric Theoret report EUR/USD trading softer near 1.1711, extending its recent downward drift as markets weigh US–Iran tensions and UK political risks alongside German reform uncertainty.

USD/JPY trades around 157.80 on Wednesday at the time of writing, up 0.13% on the day, as the US Dollar (USD) continues to benefit from renewed hawkish expectations surrounding the Federal Reserve’s (Fed) monetary policy outlook.

BNY’s Bob Savage notes Japanese 20-year yields have climbed to 1997 highs as JGBs track U.S. moves, with markets watching USD/JPY holding below 158. A record current account surplus and supportive comments from U.S. officials reinforce expectations for a BoJ rate hike in June.

The Euro (EUR) trades under pressure against the US Dollar (USD) on Wednesday, with EUR/USD extending losses for a second consecutive day as uncertainty surrounding the US-Iran negotiations and hotter-than-expected US inflation data continue to support the Greenback.

The AUD/USD pair is trading at a neutral basis near the 0.7250 level after the US Producer Price Index (PPI) for April came in unexpectedly hot.

Scotiabank strategists Shaun Osborne and Eric Theoret note USD/CAD is steady around 1.3695, with the Canadian Dollar (CAD) seen as cheap versus a fair value estimate near 1.3510.

GBP/JPY extends losses for the second consecutive day on Wednesday as the British Pound (GBP) comes under broad pressure, weighed down by rising political uncertainty in the United Kingdom.

Germany Current Account n.s.a. increased to €23.6B in March from previous €22B

Brazil Retail Sales (MoM) registered at 0.5% above expectations (0%) in March

The GBP/USD pair is down 0.25% to near 1.3500 during the European trading session on Wednesday. The Cable faces selling pressure as the US Dollar (USD) trades firmly due to growing expectations that the Federal Reserve (Fed) will deliver at least one interest rate hike this year.

The Euro (EUR) extends losses against the Dollar (USD) for the second consecutive day on Wednesday, trading below 1.1700 at the time of writing after rejection at 1.1790 on Tuesday.

Germany 30-y Bond Auction: 3.62% vs 3.57%

The Australian Dollar (AUD) trades higher against its major currency peers, flattening against the US Dollar (USD) around 0.7240, during the European trading session on Wednesday.

The New Zealand Dollar (NZD) is showing the weakest performance of the G8 currencies on Wednesday, heading lower for the second consecutive day against a stronger US Dollar (USD), with NZD/USD bears testing the bottom of the weekly range at 0.5930 at the time of writing.

The Eurozone industrial sector activity rises steadily by 0.2% in March, slower than 0.3% estimates, according to data published by Eurostat. February’s Industrial Production data was revised lower from 0.4%.

Eurozone Employment Change (QoQ) in line with forecasts (0.1%) in 1Q

Eurozone Industrial Production w.d.a. (YoY) below forecasts (-1.7%) in March: Actual (-2.1%)

Eurozone Employment Change (YoY) down to 0.5% in 1Q from previous 0.7%

Eurozone Industrial Production s.a. (MoM) below expectations (0.3%) in March: Actual (0.2%)

Eurozone Employment Change (QoQ) came in at 0.2%, above expectations (0.1%) in 1Q

Societe Generale strategists observe that GBP/USD (Cable) selling has stalled as UK political uncertainty persists, with Prime Minister Starmer facing a potential leadership challenge.

UOB strategists Quek Ser Leang and Lee Sue Ann note USD/JPY remains underpinned after a volatile session that saw a spike to 157.76 and a brief drop to 157.04 before closing at 157.61. Intraday, the pair could edge higher but is expected to stay below 157.95.

The US Dollar (USD) maintains its immediate bullish trend against the Swiss Franc (CHF) intact for now, with the pair standing comfortably above 0.7800, after bouncing at lows near 0.7760 last week.

ING’s Chris Turner highlights that EUR/USD three‑month implied volatility trades well below realised and near the lower end of its five‑year range, pointing to a range‑bound environment.

Here is what you need to know on Wednesday, May 13:

Danske Research Team highlights that EUR/GBP moved higher as United Kingdom (UK) political uncertainty intensified. Over 90 MPs called for Prime Minister Starmer to resign and several ministers and aides stepped down.

The EUR/GBP cross loses momentum to near 0.8660 during the early European trading hours on Wednesday. The Euro (EUR) weakens against the British Pound (GBP) due to fears over the Eurozone's economic exposure to energy shocks from the Middle East and stalled US-Iran peace negotiations.

The US Dollar (USD) is practically flat against the Canadian Dollar (CAD) on Wednesday, hovering at a short distance from the four-week high, at 1.3724.

France Consumer Price Index (EU norm) (YoY) meets forecasts (2.5%) in April

France Consumer Price Index (EU norm) (MoM) meets forecasts (1.2%) in April