EUR a mid-performer but still weak vs. USD – Scotiabank

FXStreet Insights Team FXStreet

The Euro (EUR) is down 0.6% against the US Dollar (USD) and a mid-performer among the G10 as we head into Tuesday’s NA session, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Markets eye September 8 French confidence vote

"Broader developments are weighing on the EUR, and spillover from the UK fiscal situation is also dragging euro area bond yields higher as well. European political developments remain in focus as markets eye France’s Sept 8 confidence vote and consider the risk of fresh elections in the event of a collapse in government."

"In terms of data, the euro area preliminary CPI figures were in line with expectations at 2.1% y/y, and the core print surprised modestly relative to expectations, remaining unchanged at 2.3% y/y. The EUR is weak but still trading within its recent range, and the RSI remains close to neutral just below 50."

"Tuesday’s decline has delivered another break of the 50 day MA (1.1666) trend congestion level and we look to near-term support around 1.16. We see near-term resistance at 1.17."

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FXStreet Insights Team

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AUD/USD slips below 0.7000 as RBA hike fails to offset US election woes

The Aussie Dollar drifts lower against the US Dollar late on Tuesday as the US midterm elections are underway, while progress toward a potential diplomatic exit from the US-Iran war stalls after Iran denied claims it was close to a deal. The AUD/USD trades at 0.6965, down 0.44%.

USD/JPY fails near 159.00 amid weak USD, intervention risks

USD/JPY edges lower during Tuesday’s Asian session, reversing part of the previous day's gains to 158.00 as the US Dollar remains depressed amid hopes for Iran diplomacy and ahead of US midterm elections. Meanwhile, intervention risks support the Japanese Yen, though the uncertainty over the timing of the next BoJ rate hike caps gains. This keeps the pair confined within a familiar range and warrants caution before placing directional bets.