EUR/USD: Range highs eyed on policy risk pricing – HSBC

FXStreet Insights Team FXStreet

HSBC Global Research highlights that EUR/USD has been steady despite EU–US trade uncertainty, with much US policy risk already priced. The bank expects the pair to move back toward the upper end of its recent range without breaking higher. Fiscal expansion and production recovery support the Euro, but limited wage growth and credit dynamics cap the upside.

Euro seen gravitating toward range top

"EUR-USD remains stable despite ongoing uncertainty over EU-US trade policy."

"With EURUSD trading above interest rate differentials, much of the US policy risk appears to be priced in."

"Over the coming weeks, we look for EUR-USD to drift back to the upper end of its trading range but not establish new highs."

"Expansionary fiscal measures and recovering production offer some upside, but without stronger wage growth or a pronounced credit cycle, a significant EUR rally is unlikely."

"The European Central Bank’s (ECB) influence on the EUR remains limited, with no rate changes anticipated through 2026."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD remains offered below 0.7000

AUD/USD extends its decline for a second consecutive session, retreating toward the 0.6960 region, or multi-day lows, ahead of the opening bell in Asia. The pair’s decline comes as investors keep digesting the RBA’s latest monetary policy decision and gear up for US Midterm election results.

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.

Gold struggles near $3,900 as traders assess Middle East developments,US election risks

Gold (XAU/USD) loses momentum on Tuesday as Oil prices rebound after the Wall Street Journal (WSJ) reported a US strike on Iran’s Qeshm Island. At the time of writing, XAU/USD trades around $3,909, down 0.93% on the day.

BNB Price Forecast: BNB rebounds above $700 as Binance records net inflows after hack

BNB (BNB) springs up above $700 on Tuesday, as bulls push to regain momentum following last week’s sell-off. The decline from highs above $760 on Thursday to lows of $680 was largely driven by investor reaction to the security breach on Binance, the largest crypto exchange. The hack impacted approximately $6.3 billion, the largest in crypto industry history.

US Dollar Index edges up within range with midterm elections front and centre

The US Dollar Index is picking up from session lows but remains within previous ranges, below 102.00. The Greenback is drawing support from hostilities in Iran and higher Oil prices, but US political uncertainty is capping gains.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.