LONDON, June 22 The dollar held firm on Monday as the first round of U.S.-Iran talks fuelled investor optimism for a deal, while the yen was stuck near 40-year lows and the pound slipped after UK Prime Minister Keir Starmer said he would resign.
Mediating nations Qatar and Pakistan said the U.S. and Iran agreed to a roadmap towards a final deal to end their conflict within 60 days, although investors fretted about threats from U.S
President Donald Trump to restart the war in the Middle East and Tehran’s announcement it had closed the vital Strait of Hormuz. Oil prices fell nearly 2%, leaving Brent crude futures at $79.1 a barrel. “The physical market remains tight and that should provide some support, but flows in FX and commodities will continue to be heavily influenced by developments in the energy complex,” said Chris Weston, head of research at Pepperstone. Sterling was down 0.1% at $1.322, not far off the lows for the day after Labour leader Starmer said he would resign, opening the way for rival Andy Burnham to possibly become the country’s seventh prime minister in the 10 years since the Brexit vote. “At the moment, Andy Burnham is the favourite and he’s tried to reassure the gilt market that he will stick to the fiscal rules, and there are reports that he’s working with respected economists,” said MUFG senior currency analyst Lee Hardman. “That has definitely provided some reassurance to investors and will limit the downside risks for the pound and gilts in the near term.” YEN NEAR 40-YEAR LOW Meanwhile, the Japanese yen struggled around 161.73 to the dollar, just shy of a two-year low reached last week.
A break beyond 161.96 would take the yen to its weakest level since 1986. Japanese Finance Minister Satsuki Katayama said on Monday that authorities were prepared to respond appropriately to currency moves at any time. “The MOF may be getting sore necks watching USD/JPY surge into the 2024 high,” said Matt Simpson, senior market analyst at…