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Gold (XAU/USD) recovers slightly from a nearly two-week low, touched during the Asian session on Tuesday, and climbs back above the $4,000 psychological mark, though the upside potential seems limited. The US Dollar (USD) pauses following a strong two-day rally as bulls turn cautious ahead of the latest US consumer inflation figures and Federal Reserve (Fed) Chair Kevin Warsh’s testimony. This, in turn, is seen as a key factor offering some support to the bullion. However, escalating US-Iran tensions, along with firming Fed rate-hike expectations, back the case for a further near-term USD appreciation and should cap the yellow metal.The…
The rupee fell past the key psychological level of 96 per dollar on Tuesday, as oil prices climbed to a one-month high after the U.S. reimposed its naval blockade of Iran while the two countries stepped up attacks in the Strait of Hormuz.The rupee declined 0.56% to 96.16 per dollar, its weakest level since late May.The rupee had rallied to a month high of around 94.15 in June after policymakers unveiled measures – including incentives for foreign-currency deposits and tax exemptions on overseas investments in government debt – to attract dollar inflows.An interim ceasefire between Washington and Tehran had also…
The United Arab Emirates (UAE) Ministry of Defence said that two UAE national tankers, the Mombasa and Al Bahiyah, were targeted by two Iranian cruise missiles in the southern lane of the Strait of Hormuz, in Omani territorial waters, Reuters reported on Tuesday. The source added that one Indian crew member was killed and eight others were wounded.The UAE condemned what it called a “blatant attack” and said the country retained “its full right to respond to this escalation.” The ministry further stated that the UAE remained fully prepared to deal with any threats and was taking all necessary measures…
BNY’s Geoff Yu highlights that Emerging Markets (EM) equity positioning is heavily skewed toward South Korea and Taiwan, with the rest of EM seeing historically low allocations. China’s weakness and poor EM data have already driven valuations to price in disinflation and weak growth. Yu argues that adding EM exposure ahead of any recovery offers a more attractive risk‑reward profile than current positioning implies.EM positioning skewed to chip leaders”Rotation away from EM chip leaders is becoming a more powerful allocation theme. Semiconductor-related stocks in South Korea fell heavily again overnight, while Taiwanese peers also struggled to benefit from solid earnings.…
UOB’s Lee Sue Ann and Jester Koh note that the Reserve Bank of New Zealand raised the Official Cash Rate to 2.50% in July and adopted a more hawkish tone as inflation risks remain elevated. They keep their OCR forecast at 2.50% through 2Q27, but highlight that risks are skewed towards further tightening if inflation pressures prove more persistent or external shocks re-emerge.RBNZ hike keeps tightening bias alive”The Bank noted that headline inflation remains above target, economic activity is expected to strengthen after a temporary loss of momentum in the June quarter, and some further removal of monetary stimulus will…
Rupee slipped to its weakest level in more than a month on Monday, as oil prices rose after U.S. and Iran traded strikes, with Tehran saying it had closed the vital Strait of Hormuz.The rupee closed at 95.62 per dollar, down 0.3% from its previous session close, after touching an intraday low of 95.85.The currency’s losses would have been steeper had it not been for the likely central bank intervention, traders said.Brent crude rose 3% to $78 per barrel, keeping markets jittery over the impact of higher energy costs if the hostilities in the Gulf carry on.Steep increases in oil…
ING’s Chris Turner highlights that USD/JPY is grinding higher above 162 as higher energy prices pressure Asian currencies. He notes that Japanese authorities may follow a similar intervention pattern to last year, with potential action ahead of the Marine Day holiday. However, he argues intervention alone cannot reverse the bull trend without lower energy prices and a less hawkish Fed.Authorities eye repeat intervention pattern”USD/JPY is grinding higher again – as is USD/Asia in general – on the back of higher energy prices. Local authorities continue to try and defend against currency weakness – weakness which would add to the inflation…
USD/CHF gains ground for the second successive day, trading around 0.8100 during the Asian hours on Monday. The pair appreciates as the US Dollar rises on increased safe-haven demand amid heightened geopolitical tensions in the Middle East. According to Bloomberg, the US Central Command (CENTCOM) launched additional strikes on Sunday evening, aimed at weakening Iran’s capability to target civilian vessels navigating the waterway.Reuters reported that US forces have hit more than 300 Iranian targets over a three-night span, including 140 on Saturday alone, while Washington and Tehran issued conflicting declarations regarding whether the strait remains open to maritime traffic.Additionally, the…
The dollar jumped against most of its peers as a renewal of conflict in the Middle East fanned inflation fears and the prospect of rate hikes from central banks increased. Against the yen, the U.S. dollar was up 0.1% at 161.92 yen. The euro weakened 0.1% to $1.1403 while the British pound slipped 0.1% to $1.3383. The Australian dollar was down 0.1% at $0.6942, while its kiwi counterpart slid 0.1% to $0.5757.U.S. and Iranian forces exchanged heavy missile and drone assaults at the weekend, with Tehran targeting U.S. facilities in states across the Gulf on Sunday and saying it had…
The AUD/USD pair loses ground to near 0.6940 during the early Asian session on Monday. Renewed tensions in the Middle East weigh on the riskier assets such as the Australian Dollar (AUD) against the US Dollar (USD). Traders brace for the release of the US Consumer Price Index (CPI) inflation data, which is due later on Tuesday.Bloomberg reported that the US Central Command (CENTCOM) launched a new strikes against Iran on Sunday aimed at further weakening the Islamic Republic’s ability to strike civilian vessels transiting the Strait of Hormuz. The Islamic Revolutionary Guard Corps (IRGC) then launched retaliatory drone and…