Euro gains against Japanese Yen on US-Iran deal, eyes on BoJ policy

Euro jumps to near 185.85 against the Japanese Yen due to the risk-on mood on the US-Iran deal finalization.
ECB officials warn of near-term inflation risks even as Hormuz reopens.
The BoJ is expected to raise interest rates by 25 bps to 1% on Tuesday.

Sagar Dua FXStreet

The Euro (EUR) outperforms its major currency peers during the European trading session on Monday, trading 0.26% higher to near 185.85 against the Japanese Yen (JPY). The major currency strengthens as the finalization of a peace framework between the United States (US) and Iran, which will be signed on Friday, has resulted in a broader risk rally in global markets.

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.34%	-0.18%	-0.08%	-0.13%	-0.37%	-0.24%	-0.46%
EUR	0.34%		0.15%	0.28%	0.22%	-0.04%	0.11%	-0.14%
GBP	0.18%	-0.15%		0.13%	0.07%	-0.20%	-0.02%	-0.30%
JPY	0.08%	-0.28%	-0.13%		-0.05%	-0.31%	-0.20%	-0.42%
CAD	0.13%	-0.22%	-0.07%	0.05%		-0.24%	-0.13%	-0.37%
AUD	0.37%	0.04%	0.20%	0.31%	0.24%		0.15%	-0.08%
NZD	0.24%	-0.11%	0.02%	0.20%	0.13%	-0.15%		-0.26%
CHF	0.46%	0.14%	0.30%	0.42%	0.37%	0.08%	0.26%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

S&P 500 futures are up almost 1.3% in the European trade, reflecting strong demand for riskier assets.

On Sunday, both the US and Iran confirmed reaching a deal, and President Donald Trump announced the reopening of the Strait of Hormuz along with the removal of the US blockade on Iranian seaports.

The US-Iran deal finalization has resulted in a sharp decline in oil prices, which surged significantly in Middle East war times and remained a key drag on currencies from economies that are highly dependent on oil imports for meeting their energy needs.

Higher energy prices also prompted inflationary pressures in the Eurozone economy and forced European Central Bank (ECB) officials to hike key interest rates by 25 basis points (bps) in its monetary policy meeting on Thursday.

Meanwhile, ECB officials have warned of near-term inflation risks despite the US-Iran deal finalization. ECB Governing Council Member and President of the Deutsche Bundesbank, Joachim Nagel, said during the European trade that there seems to be no relief from high inflation in the foreseeable future, as it will take months for oil supply to return to normal.”

On the Tokyo front, investors await the Bank of Japan’s (BoJ) monetary policy announcement on Tuesday, in which it is expected to raise interest rates by 25 basis points (bps) to 1%.

Economic Indicator

BoJ Interest Rate Decision

The Bank of Japan (BoJ) announces its interest rate decision after each of the Bank’s eight scheduled annual meetings. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and raises interest rates it is bullish for the Japanese Yen (JPY). Likewise, if the BoJ has a dovish view on the Japanese economy and keeps interest rates unchanged, or cuts them, it is usually bearish for JPY.

GBP/USD advaces beyond 1.3450 after BoE decision, US Q2 GDP

GBP/USD gains positive momentum on Thursday, surpassing 1.3450 and trading at fresh multi-week highs. The Bank of England decided to maintain the benchmark rate unchanged at 3.75%. The MPC voted 6-3 to keep rates on hold, with the 3 dissenters favoring a rate hike. US Q2 GDP missing expectations helped the pair advance, while renewed US Dollar weakness across the FX board pushed the pair further up ahead of the monthly close.

EUR/USD confortable around 1.1530, highest in six weeks

The EUR/USD pair trades around 1.1530 in the American session on Thursday, reaching fresh six-week highs. The US Dollar is in sell-off mode, with multiple factors weighing on the American currency. Not only did the Federal Reserve vote divided to keep rates on hold on Wednesday, creating doubts about a September hike, but US Q2 GDP missed expectations. A suspected JPY intervention adds pressure on the Greenback.

Gold recovers the $4,100 level as US Dollar weakens further

Gold trades just above $4,100 amid a US Dollar sell-off. The Greenback enjoyed some near-term demand following Wednesday's post-FOMC downfall, but was unable to retain its gains. The preliminary estimate of the US Q2 GDP showed the economy grew at an annual rate of 1.5%, missing the market's expectations of 2.1%.

Ripple Price Forecast: XRP builds recovery momentum as whales increase exposure

Ripple (XRP) rises toward the pivotal $1.10 resistance on Thursday, marking three consecutive days of gains. This neutral-to-slightly bullish outlook follows the Federal Reserve (Fed) decision to leave interest rates unchanged in the 3.50%-3.75% range.

The FOMC: Rates left on hold; dollar falls as Warsh fails to vote for hike

The Fed kept interest rates on hold today, defying a 30% chance in the Fed Funds Futures market that rates would rise. The Committee voted 9-3 to keep rates on hold, with governors Kashkari, Hammack and Logan all voting to hike rates due to concerns about inflation. The immediate market reaction has been a sharp drop in the USD on a broad basis.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.