Dollar Steadies on Low Volumes
The U.S. Dollar is up against the majority of its peers on muted flows as the summer lull begins to take hold of the market.
Crude oil rose sharply overnight following reports that a fully laden liquefied natural gas carrier operated by Qatari state-owned shipping firm Nakilat was struck by projectiles as it exited the Strait of Hormuz near the Omani coast. The Iranian Revolutionary Guard Corps also struck two commercial vessels as they attempted to transit the strait overnight. The strikes raise fresh concern amongst ship owners, with some carriers not willing to risk the crossing in such conditions, but some remain willing to take the risk as Japanese, Singaporean, and Chinese vessels continue to successfully transit the strait via a route close to the Iranian coast. These latest attacks threaten to unravel the fragile memorandum of understanding signed by the U.S. and Iran less than three weeks ago and reinforces the idea that we have not yet returned to normal, but the elevated oil prices are providing moderate support for the Buck in the meantime.
What to Watch This Week…
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JPY
The Japanese Yen is the G10s sole gainer against the Greenback this morning after Japanese Growth Strategy Minister Minoru Kiuchi stated that there was no truth to reports that the government was encouraging low interest rates as policy and that if there was any confusion, they would make greater efforts to promote understanding of their intentions. Data released overnight also showed that Japanese wages outpaced inflation for the month of May, and the 30-year Japanese Government Bond auction saw its strongest demand level since 2019.