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: 2025.06.18
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AUD/JPY rises above 94.00 despite increased risk aversion
World FX news
Breaking news
AUD/JPY rises above 94.00 despite increased risk aversion
New
2025.06.18 17:42
2025.06.18 17:42
2025.06.18 17:42
- AUD/JPY may lose ground as safe-haven demand rises amid escalating Middle East tensions.
- President Trump demanded Iran's "unconditional surrender."
- Japanese PM Ishiba stated that the cash handout is the quickest way to support low-income households.
AUD/JPY holds gains after registering nearly 0.50% losses in the previous session, trading around 94.20 during the European hours on Wednesday. However, the upside of the currency cross could be limited due to heightened safe-haven demand, driven by escalating Middle East tensions. This increased risk aversion puts downward pressure on the risk-sensitive Australian Dollar (AUD) while contributing support for the Japanese Yen (JPY).
US President Donald Trump posted on his social media platform on Tuesday, calling for Iran's "unconditional surrender." The US military is deploying more fighter aircraft to strengthen its presence, three officials told. Meanwhile, Israel may intensify its attacks on Iran, while the United States (US) is considering expanding its role in the conflict.
President Trump said that he wants a permanent end to Iran's route to nuclear weapons following his early departure from the G-7 meeting in Canada. However, Tehran has reportedly urged several countries, including Oman, Qatar, and Saudi Arabia, to urge US President Donald Trump to declare an immediate ceasefire.
Traders await Australia's upcoming labor data, including Employment Change and Unemployment Rate, scheduled to be released later this week. The jobs figures will likely offer fresh impetus to the domestic economy and shape expectations for the Reserve Bank of Australia's (RBA) policy outlook.
On Wednesday, Japanese Prime Minister Shigeru Ishiba said that the cash handout is the quickest and most effective way to help low-income households cope with high prices. Ishiba said that he had agreed with President Trump to continue ministerial-level tariff talks and will continue to work intensely to achieve a trade deal with the US.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms "risk-on" and "risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a "risk-on" market, investors are optimistic about the future and more willing to buy risky assets. In a "risk-off" market investors start to 'play it safe' because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of "risk-on", stock markets will rise, most commodities - except Gold - will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a "risk-off" market, Bonds go up - especially major government Bonds - Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are "risk-on". This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of "risk-off" are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world's reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them - even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
Last updated
: 2025.06.18
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US: Initial Jobless Claims dropped to 245K last week
US citizens filing new applications for unemployment insurance dropped to 245K for the week ending June 14, as reported by the US Department of Labor (DOL) on Thursday. This print matched initial estimates and came in below the previous week's revised tally of 250K (revised from 248K).
New
2025.06.18 21:37US Dollar drifts lower ahead of Fed decision as Middle East tensions persist
The US Dollar Index (DXY), which measures the value of the Greenback against a basket of six major currencies, is trading slightly lower on Wednesday after gaining about 0.7% the previous day.
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2025.06.18 21:35Gold turns cautious as Fed decision briefly overshadows Middle East tensions
Gold (XAU/USD) is holding steady near $3,385 on Wednesday, supported by persistent geopolitical tensions and investor caution ahead of the Federal Reserve's (Fed) policy decision.
New
2025.06.18 21:30WTI Oil price holds gains near $74.00, boosted by rising geopolitical risks
Verbal escalation between US President Donald Trump and Iranian officials has boosted fears of a wider regional war in the Middle East, with the involvement of the US, which is underpinning Crude Oil prices near four-month highs.
New
2025.06.18 20:51USD/INR holds near two-month high amid Middle East tensions and Fed caution
The Indian Rupee (INR) remains on the back foot against the US Dollar (USD) on Wednesday, marking its second consecutive day of weakness, despite a relatively subdued Greenback ahead of the key Federal Reserve's interest rate decision.
New
2025.06.18 20:45JPY is a relative outperformer on trade data surprise - Scotiabank
The Japanese Yen (JPY) is entering Wednesday's NA session with a 0.3% gain, outperforming nearly all of the G10 currencies in an environment of mild USD weakness, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
New
2025.06.18 20:41GBP outperforming most G10 currencies - Scotiabank
Pound Sterling (GBP) is a relative outperformer as we head into Wednesday's NA session, up nearly 0.3% vs. the US Dollar (USD) with a notable pop in response to the stronger than expected CPI release for the month of May.
New
2025.06.18 20:40ECB's Centeno: Very worried about growth in Europe
European Central Bank (ECB) Governing Council member Mario Centeno said on Wednesday that he is very worried about the European economy's growth prospects and argued that inflation will not be at 2% without growth.
New
2025.06.18 20:37EUR is a midperformer - Scotiabank
Euro (EUR) is up a modest 0.2% vs. the US Dollar (USD) and a relative performer among the G10 in an environment of mild USD weakness.
New
2025.06.18 20:33CAD little changed on the day - Scotiabank
The Canadian Dollar (CAD) is little changed on the session after reversing losses through the upper 1.36s in thin trade just ahead of the Asian open earlier, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
New
2025.06.18 20:30Disclaimer:
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