FUNDAMENTAL OVERVIEW USD: The US dollar strengthened a bit yesterday as traders turned more cautious heading into the expected US-Iran talks in Islamabad and the ceasefire deadline.
FUNDAMENTAL OVERVIEW USD: The US dollar strengthened a bit yesterday as traders turned more cautious heading into the expected US-Iran talks in Islamabad and the ceasefire deadline. The markets got scared at some point as it looked like the Islamabad talks were dead on arrival with Iran refusing to participate until the US blockade in the Strait of Hormuz was lifted.
The sentiment improved though after Trump extended the ceasefire deadline (unsurprisingly) to allow more time for Tehran to put forward a proposal to end the war. There’s no deadline for this latest extension, so we might just get stuck in this new situation until the bombs start dropping again or they finally reach a deal. This morning, the sentiment is a bit more positive after Tasnim reported that Iran received ‘some sign’ the US is ready to break the blockade which is giving traders hope that the talks are going to happen soon.
The price action continues to be driven by US-Iran headlines, and this is unlikely to change until we get an official resolution. For now, the greenback will likely remain under pressure amid the optimistic expectations. JPY: On the JPY side, the currency has been mostly driven by US dollar strength and weakness as Japanese macro conditions continue to point towards a neutral policy.