US FX WRAP: Dollar and Yen bid in risk off trade

Analysis details (20:45)

The Dollar Index saw slight gains on Tuesday, despite a lack of US data and Fed speak, although there was mixed housing data - the forward-looking building permits fell more than anticipated, while the volatile housing starts unexpectedly soared higher and printed outside the top end of the forecast range. Elsewhere, it was a very quiet summer trading day as participants await Jackson Hole, where Chair Powell is set to speak on Friday at 10:00EDT, but before that is the FOMC Minutes on Wednesday. DXY traded between 97.938-98.321.

G10 FX was largely lower against the Greenback, although the Yen firmed and was the clear outperformer with USD/JPY hitting a low of 147.45 against an earlier high of 148.11 as it was supported by the broader risk-off sentiment. Antipodeans and CAD lagged, with the former weighed on by the broader risk tone ahead of RBNZ overnight, while the Loonie was hit by cooler than expected Canadian CPI, which tilted money market pricing modestly dovish. USD/CAD traded between 1.3797-3864, while AUD/USD and NZD/USD both traded within a 50-pip range.

CHF, EUR, and GBP all saw similar losses vs. the Buck, albeit not to the extent of the aforementioned three (AUD, NZD, CAD) as newsflow was light and attention turns to UK CPI on Wednesday, which will be pivotal in determining the outcome of the next BoE meeting. 

EMFX was mixed. Yuan was flat ahead of PBoC LPR overnight, whereby it is likely to keep rates at their current levels, with the 1-year LPR at 3.00% and the 5-year LPR at 3.50%.

19 Aug 2025 - 20:45- ForexData- Source: Newsquawk