EUR/USD struggles to rise above 1.4000

After Nvidia reported its fiscal Q2 revenue, investors reacted to the softer guidance and the company’s decision to exclude China sales from its outlook. This cautious move weighed on its shares after-hours and had a ripple effect on US equity futures. Meanwhile, the Asian financial market had a mix of news and data with Japan taking the spotlight.

Japan’s tariff negotiator, Akazawa, made headlines when he canceled his US trip, citing the need for further discussions at home before making any international commitments. This move comes amidst uncertainty over US tariff policies, as highlighted by BOJ’s Nakagawa, who emphasized the importance of the Tankan survey as a key gauge of trade impacts.

In terms of economic data, Australian headline capex spending for Q2 2025 came in at +0.2% q/q, falling short of expectations. On the FX front, the PBOC set the USD/CNY central rate at 7.1063, surprising many who anticipated a different figure. In New Zealand, business confidence edged up to 49.7% in August, showing a positive trend.

Elsewhere, the Bank of Korea kept its base rate unchanged at 2.5%, aligning with market expectations. Amidst all this, Nvidia’s dip following their earnings report stood out, especially with CEO, NVDA Huang, referencing a $50 billion market opportunity in China for the company. The uncertainty surrounding China’s regulatory environment weighed on the company’s outlook, causing concern among investors.

Looking ahead, global trade tensions are heating up, with Mexico planning to increase tariffs on China. Despite the challenges, UBS predicts that the Swiss franc’s strength is likely to persist even if the SNB cuts rates back below zero.

As the day unfolded, USD/JPY maintained a narrow trading range, while major FX pairs drifted modestly lower against the dollar. In Asia-Pac stocks, the Nikkei 225 climbed by 0.7%, while the Hang Seng in Hong Kong recorded a decline of 0.6%. Overall, the region saw a mixed performance in equities.

In conclusion, Nvidia’s earnings report and subsequent market reactions were indicative of broader sentiments in the Asian financial markets. With geopolitical and macroeconomic risks looming large, investors are treading cautiously, keeping a close eye on developments both at home and abroad.