[MARKET ANALYSIS] USD a touch weaker awaiting US-Iran news; Kiwi leads after hotter than expected CPI

G10s are mixed against the Buck. Antipodeans lead after a hotter-than-expected NZ CPI; JPY underperforms after the Japanese cabinet excluded a sales tax decision from its fiscal plan.
DXY is a touch lower today, with oil prices softer but lacking direction as we await further geopolitical updates. Overnight, Axios reported that senior US and Israeli officials are claiming Trump’s options were to either promote a new 10-day ceasefire or launch a full-scale war on Iran. Elsewhere, Fox reported Trump will decide in the coming days whether to expand military operations against Iran. ING opines USD risks remain to the upside, given the aforementioned factors. Given the above, focus remains on incoming Gulf newsflow with a light calendar ahead of the Fed’s meeting next week. DXY remains below the 21DMA at 100.05, currently between 100.90 and 101.
GBP in focus today after UK PM Burnham appointed former Defence Minister Healey as Chancellor (see 09:50 analysis for more detail). Elsewhere, UK jobs saw the unemployment rate remain steady at 4.9%, whilst the Employment Change topped expectations, while the wages components were flat/very slightly firmer. Overall, a report which will have little impact on the BoE, ahead of CPI on Wednesday and Flash PMIs on Friday. GBP takes a breather just above 1.3420 in Cable, and a little weaker just above 0.85 in the EUR cross.
CAD lacks direction as it takes a breather after weakening yesterday following further tariffs from the US. To recap, the US is imposing additional 50% tariffs on certain products of Canada, including some USMCA products, to “counter Canadian bias against US commerce with respect to alcoholic beverages, dairy and motor vehicles”, while the additional duties take effect on 19th August 2026. Canadian PM Carney issued a statement regarding the US intention to impose tariffs, in which he stated that Canada is ready to engage intensively to address issues with the US and is ready to talk with the US about modernising the USMCA. Canada's Ontario Premier said Canada should impose retaliatory tariffs against the US. USD/CAD currently resides in a 1.4058-1.4086 range.
JPY is on a weaker footing despite the aforementioned subdued Dollar and softer oil prices. Overnight, Japan's Cabinet approved the economic framework policy document, including a fiscal plan, which cited BoJ autonomy but lacked a sales tax decision. Amid the uncertainty given the lack of a funding plan, USD/JPY resides towards the upper end of a 162.43-162.70 range.
Antipodeans hold on to the spoils of the prior day's outperformance, with Aussie propped up by firmer metals whilst the Kiwi is leading after firmer-than-expected New Zealand CPI data. AUD/NZD is a modest touch lower, Aussie and Kiwi both +0.4% against the Buck.