USD: Support from geopolitical risk faltering – ING
|The White House said yesterday it will decide whether to order direct strikes on Iran within two weeks, ING's FX analyst Francesco Pesole notes.
Oil prices and the Middle East remain the main driver for FX markets
"This slightly trims the perceived chances of both a rapid de-escalation and a rapid escalation in the Middle East conflict, leaving Brent prices supported but perhaps without enough thrust to test 80$/bll for now. It’s also been reported that Iran is attempting to fill up oil tanks quickly to export as much crude as possible, given the incumbent risks of logistical disruptions."
"The FX market has taken the somewhat lower probability of the US intervening in Iran already this weekend as an opportunity to re-enter USD short positions, especially against European currencies. This confirms that a constant flow of oil-positive, risk-negative geopolitical news is needed to keep the dollar supported in an environment where markets retain a strong bias towards strategic USD shorts."
"In macro news, today we’ll see the Philadelphia Fed survey and Conference Board Leading Index (from June and May, respectively), which are both expected to have improved modestly. The FOMC communication blackout period ended last night, but there are no speakers scheduled until Monday. Oil prices and the Middle East conflict remain the number one driver for FX markets. At this level, we think DXY may find some stabilisation barring major developments."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.