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🌐 [Market Flash] USD/JPY Stalls in 147s, EU Proposes Tariff Elimination

🌐 [Market Flash] USD/JPY Stalls in 147s, EU Proposes Tariff Elimination

📉 Market Environment

  • No major economic releases today.

  • Scheduled: U.S. MBA Mortgage Applications (Aug 16–22), Mexico Trade Balance (July).

  • Lack of catalysts leaves investors struggling to find direction.

Bonds & Energy

  • Ongoing U.S. Treasury auctions: 2Y FRN ($28B), 5Y Note ($70B).

  • Weekly U.S. oil inventory report due.

Equities

  • NVIDIA reports earnings after the close.

  • With AI boom in focus, results could significantly impact U.S. equities tomorrow.

🌍 Political & Global News

United States

  • President Trump attempted to remove Fed Governor Cook, but legal grounds were lacking → renewed concerns over Fed independence.

Europe

  • Political instability resurfaces in France.

  • Confidence vote scheduled for Sept 8; uncertainty weighs on sentiment.

EU–U.S. Trade Relations

  • EU considering elimination of tariffs on U.S. industrial products as a gesture toward Trump administration.

  • U.S. reportedly weighing cuts on EU auto tariffs.

  • Preferential tariffs for agriculture and fisheries also under discussion.

  • Reports suggest: if legislation is tabled this month, a 15% tariff on autos could be applied retroactively from Aug 1.

💱 FX Market Moves

  • USD/JPY: Nervous trading around 147.00.

  • EUR/USD: Mid-1.16s, pressured by French politics; 1.17 topside looks difficult.

  • EUR/JPY: Range-bound in 171–172, lacking direction.

✅ Summary

  • With few fresh catalysts, the baseline scenario is range trading / wait-and-see mode.

  • Key watchpoints: NVIDIA earnings, U.S. Treasury auctions, French politics, and EU–U.S. trade talks.

  • Month-end positioning likely to keep USD/JPY anchored in the 147s.

📊 FX Range Forecasts

Pair Range Key Drivers
USD/JPY 146.50 – 147.80 Month-end flows & Treasury auction demand. Likely anchored in low-147s.
EUR/USD 1.1600 – 1.1700 French political risk caps upside; lack of fresh drivers post-Ifo.
GBP/USD 1.3420 – 1.3520 Weak UK data a concern, but strong support below 1.34.
EUR/JPY 171.00 – 172.50 European uncertainty caps upside, but yen selling limits downside.
GBP/JPY 198.20 – 199.80 200 test stalls; consolidation between 198–199 in early week.
AUD/JPY 95.20 – 96.20 RBA cut speculation + China data dependency; upside sluggish.
CAD/JPY 106.20 – 107.20 CAD weakness post-CPI; uncertainty over U.S.–Canada trade talks.
ZAR/JPY 8.20 – 8.35 Supported by inflows, but 8.35 breakout difficult.

✅ Key Takeaways

  • USD/JPY: Anchored near 147; U.S. bond auctions and month-end flows could drive short-term volatility.

  • EUR: Political risk caps upside; 1.17 (EUR/USD) & 172.5 (EUR/JPY) remain tough.

  • GBP: Struggles below 200 in GBP/JPY; weak UK data a drag.

  • Commodity currencies (AUD, CAD): Heavily influenced by China and trade talks → rebounds limited.

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