At the conclusion of its August 12 meeting, the Reserve Bank of Australia’s Monetary Policy Committee decided on Tuesday morning to cut interest rates by 25 basis points to a range of 3.60%, the lowest level since April 2023, in line with market expectations.

The Japanese yen fell in Asian trading on Tuesday against a basket of major and minor currencies, extending losses for a third consecutive day versus the US dollar and hitting its lowest level in two weeks. The decline comes amid weak expectations that the Bank of Japan will raise interest rates in September.

The US currency continued to trade in positive territory after the 90-day extension of the trade truce between the United States and China, ahead of key inflation data for July in the world’s largest economy.

The Price

• USD/JPY exchange rate today: The dollar rose 0.2% to ¥148.43 — the highest since August 1 — from an opening price of ¥148.14, with a session low of ¥147.99.

• The yen ended Monday’s session down 0.3% against the dollar, marking a second straight daily loss, pressured by a rise in US 10-year Treasury yields.

Japanese Interest Rates

• Minutes from the Bank of Japan’s June policy meeting showed some board members said the central bank would consider resuming rate hikes if trade tensions eased.

• Market pricing for a quarter-point rate increase at the September meeting is steady around 40%.

• Investors are awaiting further data on inflation, unemployment, and wages in Japan to reassess those expectations.

US Dollar

The US dollar index rose by less than 0.1% on Tuesday, holding gains for a third straight day, reflecting continued strength against a basket of global currencies.

US President Donald Trump extended the suspension of higher tariffs on Chinese goods and products for another 90 days, until early November, in a move aimed at easing trade tensions between Washington and Beijing. This helped reduce uncertainty and bolstered investor risk appetite in financial markets.

As the US and China work toward a new trade agreement, a US official told Reuters that chipmakers Nvidia and AMD have agreed to allocate 15% of their China sales revenue to the US government in order to secure export licenses for semiconductors.

According to CME Group’s FedWatch tool, markets are currently pricing an 85% chance of a 25-basis-point US interest rate cut in September and a 15% chance of no change.

Investors later today await the release of key US inflation data for July, which will indicate how much the recent tariff increases have affected prices and the extent of inflationary pressures facing Federal Reserve policymakers.

Yen Performance Outlook

At Economies.com, we expect the yen to remain in negative territory against the US dollar, especially if US inflation data comes in hotter than market expectations.

Oil prices were steady on Monday, recovering from earlier session losses, as investors awaited talks between the United States and Russia this week over the conflict between Moscow and Ukraine.

The US dollar index — which measures the currency against a basket of major peers — rose 0.35% to 98.54 at 10:23 p.m. Mecca time.

US President Donald Trump and Russian President Vladimir Putin are set to hold direct talks on Friday in the US state of Alaska to discuss ending the war in Ukraine.

A Reuters survey showed OPEC production rose to 27.38 million barrels per day last month, an increase of 270,000 bpd compared with June.

In trading, Brent crude futures for October delivery settled flat at $66.63 a barrel after falling to $65.81 earlier in the session.

US West Texas Intermediate (WTI) crude futures for September delivery gained 0.15%, or 8 cents, to close at $63.96 a barrel after hitting a session low of $63.02.

Gold prices fell on Monday as the US dollar strengthened against most major currencies and investors moved away from safe-haven assets following the announcement of an extension to the negotiation deadline between the US and China.

On Tuesday, the US is set to release consumer price index (CPI) inflation data, with expectations for the core CPI to rise by 0.3% month-over-month in July and by 3% year-over-year.

US President Donald Trump announced via his Truth Social platform that gold will not be subject to tariffs, overturning a decision by US Customs authorities to impose duties on imported bullion from Switzerland.

“Gold will not be subject to tariffs!” Trump wrote in a post on Truth Social.

The White House also revealed that President Trump signed an executive order extending the suspension of elevated US tariffs on Chinese goods for an additional 90 days, according to a White House official quoted by CNBC on Monday afternoon.

The order was signed just hours before midnight, when the temporary freeze on Trump’s tariffs had been set to expire.

Meanwhile, the US dollar index rose 0.4% to 98.5 points at 20:58 GMT, after hitting a high of 99.3 and a low of 98.03.

In metals trading, spot gold fell 2.6% — or $90.5 — to $3,401.1 an ounce at 20:59 GMT, marking its largest daily loss since May.