MUFG strategists say EUR/USD has retreated toward the middle of its 1.1400–1.2000 range as the Euro faces headwinds from the Middle East energy shock and weaker euro-zone PMIs.

ING’s Chris Turner highlights unusually low USD/JPY volatility despite multiple global risks and key central bank meetings. Their economists warn markets underprice the risk of a Bank of Japan (BoJ) rate hike and possible upward revisions to inflation forecasts.

Dxy, EurUsd, GbpUsd, UsdJpy, UsdCad, UsdChf, AudUsd, NzdUsd.

Consolidation around congestion support at 1.3450 has given way to a bounce

GBP/USD trades around 1.3565 on Monday, up 0.23% on the day, supported by a weaker US Dollar in a context of improving risk appetite.

The New Zealand Dollar (NZD) is rallying against a weaker US Dollar (USD) for the second consecutive day on Monday, reaching session highs above 0.5900 at the time of writing, after bouncing at lows around 0.5840 on Friday.

The NZD/USD pair trades with mild gains around 0.5885 during the early European session on Monday.

HSBC strategists highlight that the Japanese Yen (JPY) has been the weakest G10 currency month-to-date, with USD/JPY trading in an unusually narrow range despite Japan’s large net energy import status and Gulf exposure.

The GBP/USD exchange rate rebounded on Friday after reports emerged that the Iranian Foreign Minister was traveling to Pakistan, possibly to meet with the US. It was trading at 1.3530 on Monday as investors waited for the upcoming Bank of England (BoE) and Federal Reserve interest rate decisions. …

The Australian Dollar (AUD) accelerates its rally against a weak US Dollar (USD) on Monday, reaching 10-day highs at 0.7190 at the time of writing, after bouncing from lows near 0.7100 last week.