The dollar remained under persistent pressure in Asia, dragged down by ongoing uncertainties around U.S. tariff policies, concerns over rising U.S. debt levels, and diminished appeal of USD-denominated assets. USD/JPY slid from 142.85 to a low of 142.11, reinforcing a clear bearish trend with solid resistance at hourly Ichimoku levels near 142.48-56. The yen's gains were bolstered by hawkish remarks from BOJ Governor Kazuo Ueda regarding vigilance on inflation, adding further pressure ahead of upcoming U.S.-Japan trade discussions.

Euro buoyant on trade optimism

EUR/USD remained resilient near recent highs, supported by optimism around potential U.S.-EU trade negotiations and Christine Lagarde’s comments suggesting the euro’s growing role as a dollar alternative. Technically bullish, EUR/USD faces resistance at April’s high (1.1425) and the 78.6% Fibonacci retracement at 1.1464, with downside supports around 1.1280 and 1.1131. EUR/JPY eased slightly amid general yen strength, dipping from 162.57 to 162.11 in quiet trading.

Sterling hits fresh highs on UK policy, inflation

GBP/USD reached fresh 2025 highs above 1.3580, driven by strong technical momentum and positive domestic developments, including a new GBP 3 billion government training program to reduce foreign labor reliance. Persistent UK food inflation and firm retail data reinforced expectations of continued high interest rates. Technical indicators remain bullish, with next major resistance at the 2022 high of 1.3749, while support is solid near 1.3510 and 1.3420.

Commodity currencies stable ahead of RBNZ decision

Commodity-linked currencies like AUD/USD maintained a positive outlook despite minor declines, benefiting from overall USD weakness. AUD/USD must hold above its critical 200-day moving average at 0.6447 to sustain recent bullish momentum. Attention shifts to the RBNZ, widely expected to cut rates by 25 bps to 3.25%, with market focus on forward guidance. Given broad USD pressure, downside risk for NZD/USD appears limited, potentially setting up a rally towards resistance at 0.6379 if the central bank signals less dovish intent.