The Euro (EUR) recovers modestly against the British Pound (GBP) on Tuesday, trimming earlier losses after attracting dip-buying interest near the 0.8650 region.

The Japanese Yen (JPY) fell 0.5% against the US Dollar (USD), underperforming all G10 currencies, as speculation over PM Takaichi’s snap election drove renewed selling and pushed USD/JPY toward levels last seen in early 2025, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

The Euro (EUR) is trading flat to the US Dollar (USD) and consolidating in a tight range following Monday’s attempt at a bullish reversal of the pullback from mid/late December, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

USD/CHF trades around 0.7980 on Tuesday at the time of writing, up 0.10% on the day, but off its intraday high following the release of US inflation data.

The Euro (EUR) holds firm against the US Dollar (USD) on Tuesday as traders show a limited reaction to the latest US inflation data. At the time of writing, EUR/USD trades around 1.1667, as the Greenback softens modestly.

The Canadian Dollar (CAD) is trading little changed on the day. Along with a minor gain for the MXN and the generally firmer USD, there is a mild bid for North American FX across markets, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

The British Pound (GBP) pushes higher against the Japanese Yen (JPY) on Tuesday, supported by broad-based Yen weakness as political developments in Japan weigh on sentiment.

The Australian Dollar remains trading within previous ranges against its US counterpart, as the pair’s recovery from the 0.6660 area was capped at 0.6725 on Monday before pulling back to 0.6700.

The Japanese Yen (JPY) fell 0.5% to 158.91 per US Dollar (USD), hitting its weakest level since July 2024, as speculation of a snap election under PM Takaichi triggered renewed selling, ING's FX analyst Francesco Pesole notes.

JPY and JGB slide, while the Nikkei rallies as Japan election talks fuel bets of more government stimulus.

EUR/GBP trades in a tight range around 0.8660 on Tuesday, virtually unchanged on the day at the time of writing.

EUR/USD missed an opportunity to break above 1.1700, with the euro lacking momentum while the US Dollar (USD) could strengthen further on upcoming inflation data, ING's FX analyst Francesco Pesole notes.

The AUD/JPY pair trades 0.3% higher to near 106.46 during the European trading session on Tuesday. The pair jumps higher as the Japanese Yen (JPY) underperforms its peers amid uncertainty surrounding Japan’s political outlook.

USD is likely to continue to rise; the level to watch is 158.90, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

New Zealand Dollar (NZD) could rise further; overbought conditions could limit any gains to a test of 0.5785. In the longer run, for the time being, NZD is likely to trade in a range between 0.5720 and 0.5805, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Speculation that Prime Minister Takaichi may call a snap election has pushed Japanese government bond yields higher and sent the yen weaker, driving USD/JPY back toward 159.

Australian Dollar (AUD) is likely to trade in a range of 0.6685/0.6730. In the longer run, the current price movements are likely part of a range-trading phase between 0.6655 and 0.6745, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

The USD/JPY pair revisits its one-and-a-half-year high of 159.00 during the European trading session on Tuesday.

Germany 5-y Note Auction climbed from previous 2.27% to 2.47%

EUR/JPY trades around 185.50 on Tuesday at the time of writing, up 0.50% on the day, extending its upward move for a third consecutive session, hitting a new multi-year high at 185.54 earlier in the day.

The US Dollar has found support at 0.7955, after retreating from highs near 0.8020 against the Swiss Franc on Monday.

The AUD/USD pair trades marginally lower to near 0.6700 during the European trading session on Tuesday. The Aussie pair edges down as the US Dollar (USD) ticks higher slightly ahead of the United States (US) Consumer Price Index (CPI) data for December, which will be published at 13:30 GMT.

The Pound Sterling (GBP) holds onto Monday’s gains around 1.3470 against the US Dollar (USD) during the European trading session on Tuesday. The GBP/USD pair trades firmly ahead of the United States (US) Consumer Price Index (CPI) data for December, which will be published at 13:30 GMT.

EUR/USD is trading practically flat, near 1.1650 at the time of writing on Tuesday, after pulling back from the 1.1700 area.

Silver price (XAG/USD) remains steady, slightly below record highs, trading around $85.20 per troy ounce during the European hours on Tuesday.

The USD/CAD pair lacks any firm intraday directional bias and oscillates in a narrow band below the 1.3900 mark heading into the European session on Tuesday.

The NZD/USD pair trades on a firmer note near 0.5770 during the early European trading hours on Tuesday. The US Dollar (USD) remains under selling pressure against the New Zealand Dollar (NZD) amid renewed concerns over the Federal Reserve’s (Fed) independence.

The GBP/USD pair edges higher to near 1.3470 during the early European session on Tuesday.

The GBP/JPY cross builds on the previous day's breakout momentum through a nearly three-week-old range and gains follow-through positive traction for the third consecutive day on Tuesday.

The EUR/GBP pair trades in a tight range around 0.8650 during the European trading session on Tuesday. The pair consolidates while investors gauge fresh cues about how monetary policy policies by the Bank of England (BoE) and the European Central Bank (ECB) will flair in the near term.