MUFG’s Teppei Ino notes that USD/JPY has fallen below the bank’s 155 forecast floor, briefly trading under 154.50 and testing key Fibonacci retracement levels.

Michael Pfister at Commerzbank highlights that the Mexican Peso has strengthened, with USD/MXN back below 17, helped by a weaker Dollar and Mexico’s strong performance among major currencies.

The Australian Dollar (AUD) is down 0.13% to near 0.7210 against the US Dollar (USD) during the European trading session on Tuesday. The Aussie pair comes under pressure as the US Dollar turns positive after a weak start.

The GBP/JPY cross continues to lose ground for the second straight day – also marking the fourth day of a fall in the previous five – and drops to the 207.00 neighborhood, or a fresh year-to-date (YTD) low earlier this Tuesday.

The New Zealand Dollar extends losses against the US Dollar (USD) on Tuesday, weighed by the risk-off mood amid escalating tensions in the Middle East and rising Oil prices.

Danske Research Team reports that softer-than-expected Swedish August inflation reduced market pricing for a September Riksbank rate hike. CPI, CPIF and CPIF-XE all undershot the bank’s forecasts, with the downside surprise described as broad-based.

Nomura’s FX strategists note that recent AfD gains in German regional elections have had little impact on EUR/USD so far, as markets see them as local events with limited national implications.

OCBC’s Christopher Wong highlights that USD/JPY has broken below 155 and accelerated towards the low-154s as expectations for faster BoJ policy normalisation build, with markets nearly fully pricing a 25bp hike next week.

DBS Group Research notes that after earlier rupee outperformance driven by intervention and inflows, USD/INR has settled around the mid-94 handle.

Silver (XAG/USD) is trading flat at the $66.00 area on Tuesday, holding minor gains on the weekly chart after bouncing from the mid-range of the $64.00s last week.

Here is what you need to know on Tuesday, September 8:

The Euro (EUR) claws back some of its early losses against the Japanese Yen (JPY) during the European trading session on Tuesday. At press time, EUR/JPY is down 0.3% to near 178.85 even after recovering from its intraday low of 177.85.

The USD/CHF pair flatlines near 0.8090 during the early European trading hours on Tuesday. Traders brace for crucial US Producer Price Index (PPI) and Consumer Price Index (CPI) inflation data later this week. 

The Canadian Dollar (CAD) trades higher against the US Dollar (USD) on Tuesday. The USD/CAD pair is down 0.25% to near 1.3780 at the time of writing as the Loonie outperforms due to surging oil prices.

OCBC’s Christopher Wong notes EUR/USD is holding near 1.16 as a softer US Dollar (USD) and firmer Euro-area data offset higher Oil prices.

The Euro (EUR) is practically flat against the US Dollar (USD) on Tuesday, after giving back previous gains, following the release of German Trade Balance data.

MUFG’s Michael Wan notes the Japanese Yen has strengthened below 154 against the US Dollar (USD), its firmest level since February, as markets price faster Bank of Japan tightening.

The AUD/JPY cross trades in negative territory around 110.75 during the early European trading hours on Tuesday.

The Indian Rupee (INR) retreats from its two-month high against the US Dollar (USD) on Tuesday.

EUR/JPY loses ground for the second consecutive day, trading around 178.40 during the Asian hours on Tuesday. Technical analysis of the daily chart indicates the currency cross remains within the descending channel pattern, signalling a bearish bias.

The AUD/USD pair holds steady above the 0.7200 mark through the Asian session on Tuesday, consolidating its recent strong move up to its highest level since May 14 touched the previous day.

The USD/JPY pair falls to around 153.50 during the early European trading hours on Tuesday. The Japanese Yen (JPY) strengthens to a seven-month high against the US Dollar (USD) amid growing expectations of a Bank of Japan (BoJ) interest-rate hike.

The GBP/USD pair struggles to capitalize on the previous day's modest gains and oscillates in a range below mid-1.3500s during the Asian session on Tuesday. The downside, however, remains cushioned as the US Dollar (USD) selling remains unabated on the back of a broadly firmer Japanese Yen (JPY).

NZD/USD extends its losses for the third successive day, trading around 0.5850 during the Asian hours on Tuesday. The pair is depreciating as the New Zealand Dollar (NZD) remains under pressure following the release of trade data from China, New Zealand’s major trading partner.

The EUR/USD pair trades on a flat note around 1.1625 during the early European trading hours on Tuesday. Traders prefer to wait on the sidelines ahead of the key US inflation data and the European Central Bank (ECB) interest rate decision later this week.

AUD/USD halts its four-day winning streak, trading around 0.7210 during Asian hours on Tuesday. The pair holds ground following the release Trade Balance data from China, Australia’s close trading partner.

USD/CAD extends its losses for the second successive day, trading around 1.3800 during the Asian hours on Tuesday. Analysts at HSBC caution that, despite the recent improvement in sentiment around the Fed’s anti-inflation stance, broader structural issues have not disappeared.

The GBP/USD pair gains ground to near 1.3545 during the Asian trading hours on Tuesday. The British Pound (GBP) edges higher against the US Dollar (USD) after UK Chancellor John Healey unveiled a series of measures designed to encourage economic growth and draw more private investment into the UK.

The USD/JPY pair declines for the second straight day – also marking the fourth day of a fall in the previous five – and sinks to its lowest level since February 18, around mid-153.00s during the Asian session on Tuesday.

The People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead on Tuesday at 6.7804 compared to the previous day's fix of 6.7795 and 6.7104 Reuters estimate.