MUFG’s Lee Hardman highlights that lower energy prices have eased pressure on Japanese policymakers and slowed USD/JPY’s climb below 164.00. Markets expect the Bank of Japan (BoJ) to keep rates unchanged but are focused on any hawkish signals on future hikes.

Brown Brothers Harriman’s (BBH) Elias Haddad sees above-target Australian inflation keeping Reserve Bank of Australia (RBA) hike risks alive, with June and Q2 Consumer Price Index (CPI) expected to show firm trimmed mean readings.

The British Pound (GBP) is up 0.15% to near 1.3345 against the US Dollar (USD) during the European trading session on Monday.

Commerzbank analysts report that USD/INR was little changed near 96.57 on Friday but has edged higher since early July, largely reflecting renewed upward pressure from Oil prices. They argue that the recent pullback in Oil should ease some strain on the Rupee.

BNY’s Geoff Yu notes that the Bank of Japan (BoJ) is widely expected to keep rates unchanged, but stresses that markets need a clearer tightening signal as the Japanese Yen trades near multi-decade lows.

UOB strategists note GBP/USD edged up to 1.3326, with Gilts caught between fiscal risks from Prime Minister Burnham’s debut plans and the Oil price shock.

The Euro (EUR) trades 0.36% higher to near 1.1410 against the US Dollar (USD) during the European trading session on Monday. The major currency pair trades firmly as the revival of risk-on market sentiment has diminished the safe-haven appeal of the US Dollar.

The Euro (EUR) has picked up towards the 0.8540 area against the British Pound (GBP) on Monday, after a mild pullback on Friday found support at 0.8530. The pair maintains the immediate bullish trend from mid-July lows at 0.8455, with bulls looking at three-week highs in the area of 0.8555. 

UOB strategists highlight that EUR/USD slipped slightly to 1.1369 as comments from European Central Bank (ECB) Governing Council member Gediminas Simkus suggested a rate increase remains more likely than a hold.

The Indian Rupee (INR) extends its recovery against the US Dollar (USD) at the start of the Federal Reserve’s (Fed) monetary policy week.

The Japanese Yen starts the week on a positive note against the US Dollar (USD), but is down against its other currency peers.

The AUD/USD pair struggles to capitalize on a modest bullish gap opening on Monday and oscillates in a narrow band around the 0.7000 psychological mark through the Asian session.

EUR/JPY gains ground after registering minor losses in the previous day, trading around 186.50 during the Asian hours on Monday. The currency cross is keeping a bullish near-term bias as it holds above both the nine-period and 50-period Exponential Moving Averages (EMAs).

USD/CHF depreciates after five days of losses, trading around 0.8150 during the Asian hours on Monday.

The NZD/USD pair kicks off the new week on a positive note amid a broadly weaker US Dollar (USD), though it struggles to capitalize on gains beyond the 0.5800 mark.

USD/CAD depreciates after posting minor gains in the previous trading day, hovering around 1.4080 during the Asian hours on Monday. The pair loses ground as the US Dollar (USD) falls sharply on easing geopolitical tensions following a weekend pause in military hostilities between the US and Iran.

The GBP/USD pair builds on Friday's modest bounce from a three-week low and gains strong follow-through positive traction at the start of a new week.

The EUR/USD pair builds on a modest bullish gap opening and climbs back above the 1.1400 mark during the Asian session on Monday. The intraday move up is sponsored by a broadly weaker US Dollar (USD), weighed down by renewed optimism over a diplomatic resolution to end a five-month-old US-Iran war.

On Monday, the People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead at 6.7911 compared to Friday's fix of 6.7939.

AUD/USD extends its gains for the second consecutive trading day, hovering near 0.7000 during the Asian hours on Monday. The pair appreciates as the US Dollar (USD) declines alongside a sharp drop in oil prices.

The EUR/JPY consolidates around 186.00, edges down by 0.06% amid a souring of risk appetite amid the escalation of the US-Iran war, and strengthens safe-haven assets like the Japanese Yen.

The New Zealand Dollar gains over 0.30% against the US Dollar, poised to test key resistance levels, with the 50-day Simple Moving Average (SMA) at 0.5793, slightly below the 0.5800 figure. At the time of writing, the NZD/USD trades at 0.5789, after bouncing off daily lows of 0.5767.

EUR/USD trades lower near the 1.1370 area on Friday, struggling despite stronger-than-expected Eurozone business-activity figures. The US Dollar Index (DXY) remains firmer near 101.50, offering limited support to the pair.

Silver (XAG/USD) edges higher on Friday as a pullback in Oil prices pushes US Treasury yields lower, while the US Dollar (USD) fluctuates near recent highs. At the time of writing, XAG/USD trades around $58.60, up 2.40% on the day.

Rabobank's Senior FX Strategist Jane Foley describes EUR/USD as wary after the July European Central Bank (ECB) meeting. Foley notes that the Euro (EUR) failed to gain support despite a hawkish ECB tone, while the Dollar benefits from safe haven demand and Federal Reserve (Fed) expectations.

The Pound Sterling advances by some 0.20% on Friday as Oil prices tumble, weighing on the US Dollar, while the US-Iran conflict signals a further escalation, which market participants ignored. Despite registering daily gains, the GBP/USD is poised to finish the week with losses of nearly 0.70%.

USD/CHF trades flat on Friday as a pullback in Oil prices weighs modestly on the US Dollar (USD) and US Treasury yields. However, the Middle East war and hawkish Federal Reserve (Fed) expectations keep an underlying floor under the Greenback.

Scotiabank strategists Shaun Osborne and Eric Theoret report the British Pound (GBP) is slightly higher versus the US Dollar (USD) but lagging most G10 peers.

USD/JPY edges lower on Friday, trading around 163.70, down 0.09% on the day at the time of writing, after hitting a fresh near 40-year high on Thursday.

TD Securities notes that the UK Composite PMI climbed back into expansion at 52.1 in July, led by Manufacturing strength and a Services PMI recovery to 51.8. Input cost inflation eased and business confidence hit its highest since February.