Dollar Mixed on Continued Hostilities
The U.S. Dollar is trading in mixed ranges as the United States and Iran trade blows for the 10th consecutive day despite mediators Pakistan and Qatar attempting to restore a ceasefire.
The U.S. reportedly struck Iranian military command centers, launch sites, and air defenses, while Iran reportedly struck power and desalination plants in Kuwait and sites in Jordan and Bahrain. Additionally, the Kuwaiti tanker Kaifan was attacked in the Strait of Hormuz and the Iran-backed Houthis, based in Yemen, also threatened to impose a maritime blockade on Saudi Arabia, potentially restricting the flow of millions of barrels of oil through the Red Sea. Crude oil prices have regained much of their overnight losses.
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CAD
The Canadian Dollar is the G10’s worst performer this morning after the Trump administration announced 50% tariffs on nearly $20 billion of goods representing approximately 5.5% of Canada’s exports to the U.S. The move represents a marked escalation in trade negotiations as the U.S. continues to reassess the USMCA agreement. Yesterday also saw the release of Consumer Price Index (CPI) numbers for the month of June, with the print coming in softer than expected. This pulled the core CPI figure under the Bank of Canada’s benchmark of 2%, suggesting that a further pause could be on the table for policy.
NZD
The New Zealand Dollar is up against the Buck this morning after Consumer Price Index (CPI) numbers for the second quarter of the year were released overnight. Both the quarter-over-quarter and year-over-year figures came in hotter than expected, helping to fuel rate hike expectations. Traders are now pricing in a nearly 90% likelihood of a rate hike by the Reserve Bank of New Zealand in September, and a further hike by year end.