EUR/USD holds modest gains on Tuesday as the latest Middle East developments fail to trigger a strong market reaction, while the US Dollar (USD) struggles to recover from last week’s sell-off sparked by the US Treasury’s decision to increase buybacks of longer-dated government securities.

Scotiabank strategists Shaun Osborne and Eric Theoret describe USD/CAD trading close to their fair value estimate around 1.3842 as the Canadian Dollar (CAD) reacts to trade headlines and weaker Oil prices.

NZD/USD edges slightly higher on Tuesday and trades around 0.5965 at the time of writing, up 0.08% on the day.

Rabobank's Senior FX Strategist Jane Foley discusses the British Pound's (GBP) recent performance, noting it is currently the top G10 currency on a 1‑day view but only middling over longer horizons.

GBP/JPY extends its steady recovery on Tuesday and has now recouped almost all the losses triggered by the joint US-Japan intervention in late July. The intervention was aimed at curbing excessive weakness in the Japanese Yen (JPY) after USD/JPY climbed above 160 to a forty-year high.

ING’s Francesco Pesole highlights escalating US-Canada trade tensions, with new US tariffs on Canadian autos and parts announced for early next year.

USD/JPY trades around 159.30 on Tuesday at the time of writing, up 0.15% on the day.

The British Pound (GBP) remains practically flat for the second consecutive day against the US Dollar (USD), with markets on a “wait-and-see” stance, awaiting key US Inflation data on Wednesday and the Jackson Hole central bankers’ summit on Friday.

Brown Brothers Harriman’s (BBH) Elias Haddad reports EUR/USD is firmer but still below 1.1700 as Germany’s IFO survey rises to a one-year high, echoing Eurozone PMI and ZEW improvements.

The Euro (EUR) remains practically flat against the  US Dollar (USD) on Tuesday, trading above 1.1650, at a relatively short distance from the three-month highs, at 1.1710 hit last week.

ING’s Francesco Pesole observes EUR/GBP has slipped back to the 0.8550-0.8560 area as the earlier Euro premium fades and bond market calm returns.

EUR/JPY advances to around 185.85 on Tuesday at the time of writing, gaining 0.15% on the day.

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann describe USD/JPY as locked in a range-trading phase, with a slightly firmer tone keeping the pair in a higher intraday band of 158.80–159.45.

DBS economist Radhika Rao observes that strong FCNR (B) swap inflows and higher FX reserves have not translated into significant Rupee gains, with USD/INR staying in a tight 95.50–96.00 range.

EUR/CAD extends its gains for the second consecutive day, trading around 1.6160 during the European hours on Tuesday. The currency cross remains stronger as the Euro (EUR) holds gains following the release of the German IFO business sentiment index data.

The GBP/JPY cross catches fresh bids on Tuesday and climbs to its highest level since July 30, around mid-217.00s during the first half of the European session.

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann describe GBP/USD price action as range-bound intraday between 1.3615 and 1.3660, with momentum indicators neutral.

The British Pound (GBP) trades marginally higher against the US Dollar (USD) at around 1.3640 during the European trading session on Tuesday, even as the US Dollar Index (DXY) edges up, indicating strength in the British currency.

The USD/CAD pair is seen building on its recovery move from the 1.3730 region, or a three-month low touched last week, and gaining positive traction for the second straight day on Tuesday.

NZD/USD extends its losses for the second successive day, trading around 0.5950 during the European hours on Tuesday. The currency pair faces downward pressure as the US Dollar (USD) gains strength from safe-haven demand driven by rising geopolitical tensions.

Silver price (XAG/USD) extends its losses for the second successive day, trading around $68.40 per troy ounce during the European hours on Tuesday. However, Silver may regain ground as US government interventions in the bond market revive the debasement trade.

Here is what you need to know on Tuesday, August 25:

The Australian Dollar (AUD) trades slightly higher against its major currency peers, except the US Dollar (USD), on Tuesday. In the European session, the Aussie pair is slightly down to near 0.7147.

The Japanese Yen (JPY) remains on the defensive against the US Dollar (USD) on Tuesday, in a low-volatility market, as investors await key data releases and the Jackson Hole symposium, due in the second half of the week, to make decisions.

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann keep a constructive stance on EUR/USD despite recent consolidation around 1.1660. They still see room for upside toward 1.1725 in the coming weeks as long as support at 1.1630 holds.

The Euro (EUR) trades marginally lower against the US Dollar (USD) on Tuesday, extending its corrective move from the four-day high of 1.1711 to near 1.1655 during the European trading session.

EUR/JPY appreciates after two days of gains, trading around 185.80 during the Asian hours on Tuesday. Technical analysis of the daily chart indicates the currency cross remains within the ascending channel pattern, signaling an ongoing bullish bias.

The USD/CAD pair sticks to a positive bias for the second straight day and trades around mid-1.3800s during the Asian session on Tuesday.

The GBP/USD pair extends its sideways consolidative price move for the second straight day and trades around the 1.3630 area during the Asian session on Tuesday.

NZD/USD gains ground after registering modest losses in the previous day, trading around 0.5960 during the Asian hours on Tuesday.