Dollar Mixed on End to Israel/Iran Strikes

The last few days were marked by renewed hostility with Iran firing volleys of ballistic missiles at Israel in retaliation for ‘aggressions and atrocities’ in Lebanon, which has become a lynchpin in negotiations, and Israel responding with their own strikes on military targets in western and central Iran. Conversely, President Donald Trump spent the weekend pleading with the two sides to end hostilities and agree to an immediate ceasefire. The announcement saw oil trim gains made in the last few days and sent the Buck to a session low.

Friday’s blowout jobs report has helped to solidify expectations among Traders that the Federal Reserve will hike interest rates, with 25bps priced in by the end of the year. Consumer Price Index (CPI) numbers are due to be released on Wednesday, and many Traders are expecting that they will show a significant surge, which would cement the case for a hike.

EUR

The Euro is down against the Buck this morning, trading near its lowest level in three months. The European Central Bank is determined to uphold its reputation of quashing inflation, and a significant number of Traders are expecting them to hike rates on Thursday in an effort to do so. That being said, some economists are concerned that such a move would be pre-mature, but feel that some kind of action must be taken to anchor inflation expectations.

JPY

The Japanese Yen is down against the Greenback this morning. According to Commodity Futures Trading Commission (CFTC) data for the week ending June 2nd, hedge funds are loading up on Yen shorts and are now the most bearish on the Japanese currency since July 2024. The Yen continues to trade near key intervention levels despite expectations that the Bank of Japan will hike rates as soon as next week