US FX WRAP: Dollar loses out to peers amid constructive US/Iran updates
Newsquawk Staff ·
USD: The DXY index fell after reports of a 60-day US-Iran ceasefire extension, reversing two sessions of gains driven by renewed hostilities. The Dollar was on the defensive even before the constructive Iran news, following softer-than-expected monthly headline and core PCE (though annual inflation continues to climb away from the Fed's target), as well as data which showed a downward revision to Q1 GDP. GBP, EUR, JPY didn't see too much deviation vs the USD.
CHF: The Swissy started out on the back foot as geopolitical tensions drove USD demand, however, moved into the green after the aforementioned geopolitical updates. SNB Chair Schlegel was also on the wires, and said the policy rate remains the central bank's main instrument, and reiterated that FX interventions were possible if necessary. Schlegel said the CHF's safe-haven status tends to drive appreciation during periods of high global uncertainty, while inflation is currently meeting the medium-term price stability objective.
CAD: USDCAD fell, despite softer oil prices, as the USD eased. Still, traders note that the CAD still faces headwinds; USTR Greer warned Canada is in a "different spot" to Mexico on tariffs, noting only Canada and China have retaliated against US tariffs. Greer is due to deliver recommendations to Congress on the 1st July sunset clause review by 1st June. SocGen's analyst say the bears will retain an upper hand on CAD as oil prices retreat.
XAU: Gold snapped a two-day losing streak; initially, the yellow metal fell overnight amid geopolitical escalations, though pared losses and moved into positive territory on reporting that the US and Iranian negotiators reached a deal covering a ceasefire extension and reopening of the Strait of Hormuz, pending leaders' final approval.
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