Markets weigh potential dollar strength if US-Iran negotiations collapse, while China’s yuan fix disappoints traders expecting a stronger rate.
The dollar may rally sharply if US-Iran ceasefire talks fail, MUFG analysts warned, as geopolitical tensions keep traders on edge. The PBOC set the USD/CNY reference rate at 6.8176, weaker than the 6.7685 estimate, signaling potential yuan depreciation pressure.
Japan’s April retail sales and manufacturing output rose faster than expected, but Tokyo’s May core CPI missed forecasts, complicating the Bank of Japan’s June rate hike case. Meanwhile, the yen hovered near 160 against the dollar ahead of intervention data due Friday.
New Zealand’s RBNZ signaled faster and larger rate hikes than previously expected, citing near-term inflation pressures. US Vice President Vance stated Trump has not yet endorsed an Iran agreement, adding to market uncertainty.