The USD/JPY extends its rally, hitting 40-year highs above 163.00, as the Greenback continues to gain ground versus the Japanese Yen. At the time of writing, the USD/JPY trades at 163.19, slightly shy of the multi-decade high of 163.24.

USD/CAD trades just above the 1.4100 handle into the North American afternoon, up around a fifth of one percent and on track for a second consecutive daily advance.

Commerzbank’s Dr. Henry Hao and Moses Lim highlight that the South Korean government has unveiled a major South Korean Won (KRW) internationalisation roadmap, including unlimited KRW transactions with foreign institutions from January 2027 and broader access to onshore markets.

BNY’s Geoff Yu argues that Prime Minister Andy Burnham’s removal of Value Added Tax (VAT) on household electricity is a test of the United Kingdom’s (UK) fiscal protection strategy.

The Pound Sterling loses some ground against the US Dollar, down by 0.48%, as risk appetite in the foreign exchange markets deteriorates, with the Greenback reclaiming key technical levels in the US Dollar Index (DXY) amid the escalation of the US-Iran conflict.

USD/CHF edges higher as escalating tensions in the Middle East support the US Dollar (USD), with buyers eyeing a breakout above the 0.8150 resistance level that has capped gains since July 2025. At the time of writing, the pair trades around 0.8123, up 0.27% on the day.

USD/JPY trades higher near 163.00 on Tuesday after briefly reaching 163.04, marking its first move above the 163.00 level since December 1986. The US Dollar (USD) remains supported by safe-haven demand as investors assess renewed Middle East tensions and rising Oil prices.

AUD/USD trades lower near the 0.7010 area on Tuesday, although the pair has retreated from its four-week high. The Australian Dollar (AUD) remains above the psychological 0.7000 level as softer United States (US) economic data limits demand for the US Dollar (USD).

EUR/USD edges lower on Tuesday as the US Dollar (USD) strengthens amid heightened tensions in the Middle East. At the time of writing, the pair trades around 1.1405, hovering near one-week lows.

BNY’s Geoff Yu explains that new 50% U.S. tariffs on selected Canadian goods are a direct trade shock, with Washington citing unfair treatment of US exports and ruling out United States-Mexico-Canada Agreement (USMCA) exemptions.

Scotiabank strategists Shaun Osborne and Eric Theoret highlight the Euro (EUR) trading quietly against the US Dollar (USD) in a tight low-1.14 range, with limited reaction to stronger ZEW sentiment data. Short-term rates have stabilized after a hawkish repricing, supporting EUR via yield spreads.

Brown Brothers Harriman’s (BBH) Elias Haddad highlights that the sell-off in gilts and British Pound (GBP) has stabilized after Prime Minister Andy Burnham appointed John Healey as Chancellor and pledged to stick to fiscal rules.

USD/CAD trades on the front foot as tensions in the Middle East keep the US Dollar (USD) firmly bid, while the Canadian Dollar also faces pressure from renewed trade frictions with the United States.

BNY’s Geoff Yu highlights Japan’s new fiscal guidelines under Prime Minister Takaichi, which prioritize proactive spending and long-term investment over near-term consolidation.

NZD/USD trades around 0.5835 on Tuesday at the time of writing, down a modest 0.07% on the day despite support for the New Zealand Dollar (NZD) from stronger-than-expected inflation data.

Rabobank's Senior FX Strategist Jane Foley discusses United Kingdom (UK) markets’ reaction to PM Burnham’s new cabinet and fiscal plans, noting 10-year gilt yields above 5% and British Pound (GBP) weakness in G10.

Scotiabank strategists Shaun Osborne and Eric Theoret note the Canadian Dollar (CAD) has recovered overnight losses versus the US Dollar (USD) after news that President Trump may impose new tariffs on Canadian exports.

EUR/GBP gains on Tuesday as doubts over the UK’s fiscal outlook weigh on the British Pound (GBP) following Andy Burnham’s appointment as Prime Minister. At the time of writing, the cross trades around 0.8527, extending its gains for a fourth consecutive day.

Brown Brothers Harriman’s (BBH) Elias Haddad reports NZD/USD has rallied toward a seven-week high after New Zealand Q2 Consumer Price Index (CPI) surprised slightly on the upside versus consensus but came in just below the Reserve Bank of New Zealand's (RBNZ) projection.

Lee Hardman at MUFG highlights that the Pound has modestly recovered after losses following Andy Burnham’s appointment as UK Prime Minister, while long-dated gilts remain under pressure.

Tatha Ghose at Commerzbank highlights that Turkey’s market-based inflation expectations for 2026 and 12 months ahead have risen again, undermining confidence in disinflation.

The British Pound (GBP) is one of the weakest performers among major currencies, extending its reversal against the US Dollar for the fourth consecutive week.

The Japanese Yen (JPY) continues to trade on the defensive against the US Dollar (USD), lingering near year-to-date highs just below the 163.00 handle.

Brown Brothers Harriman’s (BBH) Elias Haddad notes the Canadian Dollar (CAD) is underperforming other high-beta currencies after the Trump administration announced a 50% tariff on nearly $20 billion of Canadian imports, excluding energy and some key goods.

The British Pound (GBP) is facing a notable loss of upward momentum across major currency pairs as UK political headlines and fiscal concerns re-emerge. 

The Australian Dollar (AUD) is showing one of the best performances among major currencies on Tuesday, appreciating to fresh one-month highs against the US Dollar, amid hopes of a ceasefire in Iran.

The Japanese Yen (JPY) keeps drifting lower on Tuesday, unfazed by the mild US Dollar’s weakness.

Societe Generale strategists note that dip buying in Sterling has kept GBP/USD trading above its 200-day moving average near 1.3403, even as Gilts remain under pressure.

MUFG’s Lee Hardman notes USD/JPY is holding just below year-to-date highs as a negative energy price shock weighs on the Japanese Yen. Rising Brent prices linked to US–Iran tensions and Houthi threats to shipping highlight global supply risks.

GBP/USD remains weaker for the fourth consecutive day, trading around 1.3430 during the European hours on Tuesday. The technical analysis of the daily chart indicates a prevailing bullish bias as the pair remains within the ascending channel.