EUROPEAN FX UPDATE: DXY edges higher, EUR subdued post Trump-Putin, Antipodeans resilient

USD: DXY U/C; 97.95

• Initially traded rangebound (before rising on EUR weakness - see below) after last Friday's mixed data releases and with little fresh catalysts aside from the geopolitical headlines, while participants also look ahead to Fed Chair Powell's speech at the Jackson Hole Symposium on Friday, with the speakers list schedule to be released on Friday at 01:00 BST.


• There were comments from Fed's Daly over the weekend, who said a couple of cuts are warranted this year and maybe a few more, while she noted that they have to be ahead to not be behind.


• Later in the week, focus will be on Fed Chair Powell's speech following last week's CPI and PPI data - but "it may be too early for Powell to all but confirm a Fed rate cut in September", according to ING.


• As it stands, only around 21bps worth of cuts are priced in for September, with markets currently pointing for a cut in October (-36bps priced at the time of writing). Data-wise, nothing of note is scheduled for the week that could sway pricing.


• Elsewhere, dollar did not initially see much of a reaction to the fallout of the Trump-Putin meeting, which largely played out as expected, That being said, DXY edged higher throughout the European morning despite a lack of newsflow but with various European leaders set to visit the White House on Monday for talks with Trump and Zelensky (Full Preview available on the Newsquawk headline feed).


• DXY resides in a 97.78-98.06 range, vs Friday's 97.72-98.21 parameter. DXY sees its 50 DMA at 98.08.

EUR: EUR/USD -0.1%; 1.1681

• Takes a breather from recent advances and trades on either side of 1.1700 with various European leaders set to visit the White House on Monday for talks with Trump and Zelensky.


• On this front, "European leaders have 3 main goals in DC today: 1) pin down more details on possible US security guarantees; 2) work on preparations for the possible trilateral Putin, Zelensky & Trump meeting, and 3) push back forcefully on the idea of “land swaps", via Eurasia.


• European leaders will arrive at the White House at 12:00 EDT / 17:00 BST and will be formally greeted by President Trump at 14:15 EDT / 19:15 BST. A multilateral meeting will then be held at 15:00 EDT / 20:00 BST.


• Later this week, on Thursday, traders will be eyeing the August Flash PMIs.


• Before that, ECB President Lagarde is due to make comments on Wednesday, with no rate cuts priced in by the market throughout the horizon.


• EUR/USD resides in a current 1.1680-1.1716 range with the 50 DMA at 1.1637.

JPY: USD/JPY +0.1%; 147.28

• USD/JPY gradually edged higher north of the 147.00 level overnight with the Japanese currency marginally pressured amid the outperformance in Japanese stocks.


• Further upside was facilitated by the dollar firming throughout the European morning on the back of EUR weakness. On that note, EUR/JPY is on a softer footing in a 172.10-172.65 range.


• There isn't much slated for the JPY from a domestic standpoint before Japanese CPI on Friday, but price action until then will likely be derived from broader macro alongside yield differentials.


• Markets currently price no 25bps rate hikes for the BoJ this year, with only some 17bps of tightening currently backed in.


• USD/JPY trades in a 147.06-147.58 range, well within Friday's 146.74-147.89 range, with the 50 DMA at 146.54 and the 200 DMA at 149.25.

GBP: GBP/USD U/C; 1.3445

• GBP continues to struggle for direction amid quiet pertinent newsflow and with very little scheduled for the UK at the start of the week before Wednesday's inflation data.


• GBP/USD trades in a 1.3531-1.3568 range, within Friday’s 1.3526-1.3576 range, and with the 50 DMA at 1.3502.

Antipodeans: AUD/USD +0.2%; 0.6515. NZD/USD +0.3%; 0.5940

• Antipodeans remain afloat despite the firmer dollar and downward tilt in risk sentiment, and losses across most base metals, with traders also eyeing the widely expected rate cut at the RBNZ meeting scheduled mid-week.


• There is nothing obvious to explain the resilience in the non-US dollars.


• Note, China has extended its anti-subsidy investigation into dairy products from the EU by six months, which could potentially be net positive for the NZD, with New Zealand a major exporter of dairy products to China.

18 Aug 2025 - 09:55- ForexEU Research- Source: Newsquawk