Dollar Mixed, on Track for One-Week Low
The U.S. Dollar is trading in mixed ranges as crude oil continues its retreat from this week’s highs and tensions in the Middle East simmer.
Despite two days of renewed conflict that threatened to upend an already fragile truce, technical discussions between the U.S. and Iran are continuing, and the U.S. is reportedly remaining committed to find a diplomatic resolution. This has eased concerns regarding a return to all-out war, and safe-haven demand for the Dollar has fallen as a result.
After this week’s very light data release schedule, next week will be relatively busy, with several major releases to serve as a catalyst for price action. A few worth highlighting include the release of Consumer Price Index (CPI) and Producer Price Index (PPI) numbers for the month of June to be released on Tuesday and Wednesday respectively, both of which are expected to show reductions in month-over-month inflation, and Retail Sales numbers for the month of June on Thursday.
What to Watch This Week…
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NZD
The New Zealand Dollar is the G10s top performer for the third day in a row, on track for a three-week high. The Kiwi is continuing to receive support from the Reserve Bank of New Zealand’s hawkish tilt earlier this week, as well as from strong manufacturing data that supports the case for additional rate hikes. Should two additional rate hikes materialize this year, as is currently expected by Traders, then the Kiwi would be cemented as one of the higher-yielding G10 currencies.
JPY
The Japanese Yen is up this morning, reaching its best level against the Buck since July 6th. The move follows a call from Japanese Finance Minister Satsuki Katayama for the nation’s households and pension funds, including the Government Pension Investment Fund (GPIF) with more than USD 1.8 Trillion in assets, to increase their investments in domestic Japanese assets. She further stated that the government would pursue policy in support of that objective. Traders are uncertain whether this support will hold without actual reallocation from pension funds.