US FX WRAP: Price action subdued as US-Iran talks remain in final stages; deluge of central bank meetings ahead

The dollar was little changed on Friday, finishing the week ~0.3% lower on US-Iran talks reaching final stages. Today, updates continued to swing positive when looking at officials instead of the Iranian media. Iran's FM appears to be on the same page as Trump regarding talks: "The MoU has never been closer and is pending its finalisation". US yields moved higher despite oil prices settling lower, likely adding a floor for the USD in the risk-on environment. Currently, Trump has signalled a deal could be signed this weekend; however, the Iranians have declined to comment on the when and where of such an event. Separately, UoM was positive, all three indices beat, accompanied by declines in the inflation expectations as gasoline prices eased. The Space X IPO sparked little volatility within the markets, with the VIX currently lower on the session and US equities holding onto gains. Over the weekend, eyes are on the Middle East and whether a deal gets signed. Into next week, focus will split on the Fed, where the central bank is expected to hold rates. As it stands, new Fed Chair Warsh is anticipated to lean dovish; however, a hawkish press commentary would be seen as a surprise to markets, likely strengthening the USD. DXY now trades around 99.75 from the weekly open of 100.145

G10 FX price action was fairly contained. AUD, GBP, EUR, NZD, and CAD were flat, while the havens, CHF, and JPY saw modest losses as participants favoured higher-beta assets. Volatility is expected to pick up next week, given that the Fed, BoJ, RBA, BoE, and SNB all have rate announcements. Click here for the Newsquawk Week Ahead preview.