The British Pound (GBP) weakens against the US Dollar (USD) on Tuesday as traders reassess ongoing US-Iran negotiations following renewed US military action in southern Iran. At the time of writing, GBP/USD is trading around 1.3444, down nearly 0.43% on the day.

The Euro loses ground during the North American session amid rising tensions in the Middle East, as the US and Iran exchanged fire near the Strait of Hormuz, while negotiations continued. At the time of writing, the EUR/USD trades at 1.1622, down 0.15%.

USD/CAD reverses earlier intraday gains on Tuesday, with the Canadian Dollar (CAD) drawing support from rising Oil prices and offsetting broader US Dollar (USD) strength. At the time of writing, the pair is trading around 1.3800 after hitting an intraday high near 1.3821 earlier in the day.

BNP Paribas expects Japan’s GDP growth to slow to 0.5% in 2026 from 1.1% in 2025 as higher inflation and production costs weigh on activity. The Bank of Japan is projected to continue normalising policy, with a 25 bp hike in Q2 2026 and a terminal rate of 2.0% by end-2027.

Scotiabank analysts Shaun Osborne and Eric Theoret note that the Canadian Dollar (CAD) is steady against the US Dollar (USD) near 1.3800, with fair value for USD/CAD estimated at 1.3672. They highlight that technicals are showing a stalled rally near the 200-day moving average.

BNY reports that BoJ Deputy Governor Ryozo Himino signaled continued consideration of further rate hikes, with timing dependent on how Middle East conflict impacts Japan’s economy and inflation.

MUFG analysts argue that the Australian Dollar’s strong run versus the US Dollar is losing momentum. They highlight limited further upside for AUD/USD as global risk appetite cools, China slows and Reserve Bank of Australia (RBA) policy takes a backseat to rising US yields.

Brown Brothers Harriman's (BBH) Elias Haddad notes EUR/USD is consolidating above 1.1600 with resistance at 1.1682, near the 200-day moving average, as European Central Bank's (ECB) Schnabel signals a June rate hike.

Societe Generale analysts Kunal Kundu and Galvin Chia argue that India faces rising inflation and external risks as higher Oil prices and a weaker Rupee (INR) interact.

BNP Paribas expects the United Kingdom economy to slow in 2026, with growth at 0.7% after 1.4% in 2025 and renewed inflation pressures from the Iran conflict. Monetary policy is projected to tighten by 50 basis points in 2026, keeping 10-year gilt yields elevated.

BNY’s Bob Savage highlights that the New Zealand Dollar enters the upcoming RBNZ meeting on a weak footing, with a notable lack of recent flows and a large NZD outflow linked to unrolled swap positions.

USD/CHF trades with a mild positive bias on Tuesday as renewed military escalation between the United States (US) and Iran supports the US Dollar (USD), pressuring the Swiss Franc (CHF).

Kit Juckes at Societe Generale highlights that speculative positioning in the Australian Dollar is the largest long since 2013, built despite deteriorating domestic data and lower yields.

DBS Group Research economist Philip Wee expects the Reserve Bank of New Zealand (RBNZ) to deliver a hawkish hold, prioritising above-target inflation over weak GDP growth and high unemployment.

ING’s Deepali Bhargava argues that India’s fuel subsidies and diversified energy sourcing have contained the inflation and growth impact of higher oil prices, but shifted pressure onto the Indian Rupee (INR).

The Euro (EUR) is trading higher against the British Pound (GBP) on Tuesday, trimming losses after depreciating more than 1% in a bit more than a week.

UOB’s Quek Ser Leang and Lee Sue Ann note that USD/JPY has stalled into sideways trade after failing to extend losses, with intraday momentum indicators flat. On a 1–3 week view, they still hold a positive US Dollar (USD) bias above strong support, but acknowledge slowing upside momentum.

The Euro (EUR) remains flat against the US Dollar (USD) for the second consecutive day on Tuesday, trading at 1.1645 at the time of writing, after bouncing up from 1.1624 highs.

Societe Generale’s Kenneth Broux highlights that EUR/GBP is trading within a Head and Shoulders pattern, implying potential downside if key levels give way.

The USD/CAD pair extends its sideways consolidative price move for the second straight day on Tuesday and holds steady near the 1.3800 mark through the first half of the European session.

DBS Group Research economist Radhika Rao notes that the Indian Rupee has appreciated from near 97.00 to the mid-95.00 area on hopes of easing West Asia tensions, lower Oil prices, and central bank support.

The British Pound (GBP) trades lower against its major currency peers, is down 0.25% to near 1.3470 against the US Dollar (USD) during the European trading session on Tuesday.

MUFG’s Derek Halpenny expects the Reserve Bank of New Zealand (RBNZ) to leave rates unchanged but deliver a hawkish message, with updated forecasts showing higher inflation and a higher projected Official Cash Rate (OCR).

UOB’s Quek Ser Leang and Lee Sue Ann report that AUD/USD broke above a cited resistance but the move lacked follow-through, leaving the pair likely to consolidate. They have shifted to a neutral stance, viewing recent price action as range-bound.

AUD/USD loses ground after registering over 0.5% gains in the previous day, trading around 0.7160 during the European hours on Tuesday.

The NZD/USD pair comes under renewed selling pressure on Tuesday and slide back below mid-0.5800s during the first half of the European session.

The report notes that Eurozone yields are slightly firmer after hawkish comments from ECB member Schnabel, who highlights rising medium-term inflation expectations and signals a likely rate hike in June.

The US Dollar (USD) appreciates against the Japanese Yen (JPY) for the second consecutive day on Tuesday, hitting session highs above 159.00 at the time of writing, as fresh US attacks on Iran put the peace process into question.

The EUR/GBP cross gathers strength to near 0.8630 during the early European session on Tuesday. Hawkish remarks from the ‌European Central Bank (ECB) provide some support to the Euro (EUR) against the British Pound (GBP).

Volkmar Baur at Commerzbank expects the Reserve Bank of New Zealand (RBNZ) to keep its policy rate unchanged, maintaining a wait‑and‑see stance unlike the Reserve Bank of Australia (RBA).