FX BRIEF: DOLLAR EXTENDS GAINS AS YEN WEAKNESS PERSISTS, RISK FLOWS MIXED

Global FX Overview — Asian Session

The US dollar maintains its firm footing in Asian trading on 03 June 2026, with the greenback posting broad-based gains across major pairs as investors navigate persistent Japanese yen weakness and mixed risk sentiment. USD strength continues to dominate price action with the dollar index up 0.217 intraday, supported by elevated US Treasury yields and expectations that the Federal Reserve will maintain its hawkish stance longer than previously anticipated. The USD/JPY breakthrough toward the psychologically significant 160.00 level has reignited intervention speculation from Japanese authorities, though no concrete action has materialized. European currencies remain under modest pressure during Asian hours, while commodity currencies show divergent performance with the Australian dollar holding relatively firm and the New Zealand dollar suffering sharp losses. Market participants remain focused on upcoming US economic data releases and any potential monetary policy signals from major central banks.

Currency Strength Rankings

Strongest to weakest based on intraday performance: USD (+0.217 weighted), CHF (+0.34% vs USD), JPY (flat weighted average), CAD (+0.11% vs USD), EUR (-0.13% vs USD), GBP (-0.12% vs USD), AUD (-0.06% vs USD), NZD (-0.55% vs USD). Dollar buying flows dominate across Asian session with particular strength against E

uropean majors and the New Zealand dollar. Safe haven flows into Swiss franc notable amid geopolitical concerns. Japanese yen remains offered despite proximity to intervention levels.

FX Majors — Key Pairs Analysis

EUR/USD trades at 1.1620, down 0.13% intraday as the euro struggles to find traction amid soft European economic data and dollar resilience. The pair faces immediate support at 1.1600 with resistance emerging at 1.1650. Bias remains cautiously bearish near term with momentum indicators pointing to further consolidation or downside probing toward 1.1580.

GBP/USD at 1.3443 mirrors euro weakness, declining 0.12% intraday though cable has outperformed on a settlement basis with gains of 0.20%. Sterling finds support from resilient UK economic indicators but cannot escape broader dollar demand. Key support lies at 1.3400 with topside capped at 1.3480 near term.

USD/JPY continues its grind higher to 159.9270, up 0.18% intraday and pressing dangerously close to the 160.00 threshold that previously triggered Japanese Ministry of Finance intervention. Carry trade dynamics and negative real rates in Japan continue supporting upside, though intervention risk caps aggressive long positioning.

AUD/USD at 0.7160 shows relative resilience, down only 0.06% intraday following strong gains of 0.37% in the previous settlement. Chinese economic data and commodity price stability provide modest support, with 0.7200 representing near term resistance

and 0.7120 as support.

USD/CHF rallies sharply to 0.7888, up 0.34% intraday as safe haven flows paradoxically support both the dollar and franc, with the greenback proving stronger. The pair tests resistance at 0.7900 with momentum favoring further upside.

USD/CAD edges higher to 1.3855, up 0.11% intraday as oil price stabilization fails to provide sufficient support for the loonie against persistent dollar buying. Range trading continues between 1.3800 and 1.3900.

NZD/USD suffers the sharpest major currency decline at 0.5903, down 0.55% intraday as dovish Reserve Bank of New Zealand expectations and weaker dairy prices weigh heavily on the kiwi.

FX Crosses — Rotation Dynamics

GBP/JPY at 215.0050 shows constructive upside momentum, gaining 0.06% intraday and 0.44% on settlement as carry dynamics favor long sterling-yen positions. AUD/JPY at 114.4640 continues grinding higher, up 0.08% intraday and 0.57% on settlement, benefiting from China optimism and yen structural weakness. EUR/JPY at 185.7870 trades relatively flat intraday but maintains positive settlement momentum. NZD/JPY at 94.3740 experiences sharp selling pressure, down 0.38% intraday despite positive carry characteristics. EUR/GBP at 0.8641 edges lower by 0.04% as sterling marginally outperforms the common currency on relative growth differentials.

Flows and Positioning

Carry trade positioning remains heavily skewed toward long JPY crosses with particular concentration in GBP/JP

and 0.7120 as support.

USD/CHF rallies sharply to 0.7888, up 0.34% intraday as safe haven flows paradoxically support both the dollar and franc, with the greenback proving stronger. The pair tests resistance at 0.7900 with momentum favoring further upside.

USD/CAD edges higher to 1.3855, up 0.11%