ING economists Deepali Bhargava and Lynn Song highlight a sharp 8% drop in USD/KRW earlier in the second quarter, driven by temporary flows such as Hynix ADR repatriation and National Pension Service hedging adjustments, alongside a hawkish Bank of Korea (BoK) hike.

The Mexican peso extends its rally to 10 straight days, gaining over 0.12% on Thursday after the Bank of Mexico (Banxico) left interest rates unchanged. At the time of writing, the USD/MXN exotic pair trades at 17.21, after reaching a daily high of 17.26.

NZD/USD trades lower near the 0.5900 level at the time of writing, with no New Zealand catalyst behind the move. The US Dollar Index (DXY) is up 0.26% near the 100.00 level, and the Kiwi is simply on the wrong side of it.

The US Dollar (USD) posted gains against every major currency on Thursday, with the US Dollar Index (DXY) up 0.26% near the 100.00 level as Oil rallied 3% on the reported Strait of Hormuz vessel ban, while Gold and Silver declined.

Societe Generale strategist Kiyong Seong turns tactically constructive on USD/KRW, arguing that recent Won strength has been driven by late-stage flow factors rather than fundamentals.

The Bank of Mexico, also known as Banxico, held rates unchanged at 6.50% as expected by most analysts, unanimously, for the third consecutive meeting, after ending its easing cycle in May.

The USD/JPY advances by some 0.41%, clearing the 200-day Simple Moving Average (SMA) at 158.06, as the Greenback recovers some ground following two days of intervention in the FX markets by US and Japanese authorities.

AUD/USD is down 0.36% for the day, but still above the 0.7000 region, giving back Wednesday's gains as the US Dollar (USD) firms across the board. The US Dollar Index (DXY) is up 0.28% near the 100.00 psychological level.

The USD/CHF snaps two days of losses and rises by over 0.60% on Thursday after solid US jobs data. Also, buyers stepped in at key support at the 50-day Simple Moving Average (SMA) of 0.8052, pushing the pair back above the 0.8100 threshold.

The Pound Sterling holds firm against the US Dollar during the North American session on Thursday, after US jobs data reinforces the thesis that the labour market remains solid ahead of Friday’s Nonfarm Payrolls report. The GBP/USD trades at 1.3466, after bouncing off daily lows of 1.3404.

USD/CAD rebounds on Thursday after briefly slipping below the key 1.4000 support level, as the US Dollar (USD) snaps a two-day losing streak with traders repositioning ahead of Friday's employment reports from the United States (US) and Canada.

Scotiabank highlights that the Euro is slightly softer versus the Dollar after touching levels last seen in mid-June, with fundamentals still supportive as yield spreads turn. Spot has nearly converged with their fair value based on the 2-year Germany–US spread.

USD/JPY trades modestly higher near 158.20 on Thursday, extending a fourth session of Japanese Yen (JPY) softness as the pair claws back ground lost to last week's coordinated Japan-United States (US) intervention.

The Indian Rupee (INR) has found local support against the US Dollar (USD), with USD/INR easing to around 95.10 following the Reserve Bank of India’s (RBI) decision to hold its benchmark repo rate steady at 5.25% for a fourth consecutive meeting.

ING economists Deepali Bhargava and Lynn Song note that the Indian Rupee (INR) has given back much of its June gains as US–Iran tensions and rising Oil prices hurt sentiment.

EUR/USD trades on the back foot on Thursday, snapping a two-day winning streak as the US Dollar (USD) steadies. Still, the near-term technical picture remains bullish following the late-July rebound from below 1.1400. At the time of writing, the pair trades around 1.1534, down 0.15% on the day.

Scotiabank strategists Shaun Osborne and Eric Theoret note the Canadian Dollar (CAD) is effectively flat versus the US Dollar (USD) but modestly outperforming other majors, trading close to their fair value estimate around 1.40.

NZD/USD trades around 0.5880 on Thursday at the time of writing, down 0.10% on the day. The pair remains under pressure as renewed demand for the US Dollar (USD) emerges, with investors seeking safe-haven assets amid fresh geopolitical tensions in the Middle East.

AUD/USD edges lower on Thursday as the US Dollar (USD) steadies following two consecutive days of losses. At the time of writing, the pair trades around 0.7036, down roughly 0.32% on the day.

BNY’s Geoff Yu highlights that Mexican Peso (MXN) carry demand is surging ahead of Banxico’s decision, with MXN the best-bought currency on a weekly basis. However, weak volumes, deteriorating equity flows and only modest sovereign bond demand temper the story.

Rabobank’s Senior FX Strategist Jane Foley notes AUD/USD has trended higher since July, mainly due to a softer US Dollar (USD), with the Australian Dollar (AUD) mid-pack versus G10 peers.

ING’s FX Strategist Francesco Pesole notes Sweden’s core CPIF excluding energy rose to 0.6% in July, giving the Swedish Krona (SEK) a modest boost, while headline inflation slowed as expected.

MUFG notes that USD/JPY remains well below pre-intervention levels. Japanese retail traders entered the episode with a record short position in the pair and likely covered those positions during the intervention-led decline, partially offsetting official yen purchases.

GBP/JPY trades in a narrow range on Thursday, with the British Pound (GBP) modestly outperforming the Japanese Yen (JPY). The Yen stays on the back foot for a third consecutive day, reversing part of the intervention-driven rally that briefly sent GBP/JPY below 210.00 at the start of the week.

OCBC’s Christopher Wong and Sim Moh Siong highlight that the Reserve Bank of India's (RBI) decision to hold the repo rate at 5.25% while lowering inflation forecasts and nudging growth higher, alongside strong capital inflows, has put India’s balance of payments on track for a healthy surplus.

BNY’s Geoff Yu reports that S&P has affirmed Australia’s AAA rating with a stable outlook, citing strong institutions and modest public debt. The agency expects deficits to remain contained and net debt to stabilize over the forecast horizon.

The Euro (EUR) trades marginally lower at around 1.1545 against the US Dollar (USD) during the European trading session on Friday. The major currency pair edges down as the US Dollar ticks up, while investors shift their focus to the United States (US) Nonfarm Payrolls (NFP) data release on Friday.

The British Pound (GBP) holds marginal losses against the US Dollar (USD) on Thursday, trading at 1.3460 at the time of writing, down from Wednesday's highs at 1.3486.

Rabobank's Senior Macro Strategist Bas van Geffen discusses renewed Japanese Yen (JPY) weakness following recent joint US-Japan FX intervention that briefly pushed USD/JPY below 156.

The Japanese Yen (JPY) is ticking lower against the US Dollar (USD) on Thursday, trimming gains after an exceptional US-Japan coordinated intervention triggered a 4.5% appreciation late last week.