Dollar down again on Fed rate cut expectations, safe-haven yen and chf rise on contribued Iran-U.S. tensions

Market Review - 24/06/2019  23:48GMT  

Dollar down again on Fed rate cut expectations, safe-haven yen and chf rise on contribued Iran-U.S. tensions

The greenback continued its recent losing streak and hit 6 month lows on Monday as investors sold the dollar on bearish expectation the Federal Reserve may lower its interest rates more than once this year and the next cut will come at its next meeting in July. Meanwhile, safe-haven yen and chf gained on escalating tension between Iran and United States.  
  
Versus the Japanese yen, dollar swung broadly sideways in lackluster Tue's session. Price initially recovered from 107.29 in New Zealand to 107.48 at European open before falling to an intra-day low at 107.25 in Europe on weakness in U.S. Treasury yields and then rose to session highs at 107.53 in New York but only to retreat back down to 107.26 on U.S. President Donald Trump's comments.  
  
Reuters reported U.S. President Donald Trump said on Monday the United States was imposing fresh sanctions on Iran, amid an escalation in tensions between the two countries.   Trump told reporters the sanctions, which will target Iranian Supreme Leader Ayatollah Ali Khamenei, were in response to Tehran's downing of a U.S. drone last week.   
  
The single currency extended its recent winning streak and rose from 1.1363 in New Zealand to 1.1389 at European open and despite retreating to 1.1373, renewed buying emerged and pushed euro to 1.1398 in Europe. The pair then edged up to a fresh 3-month high at 1.1403 in New York before moving broadly narrowly in quiet New York afternoon.  
On the data front, Reuters reported German business morale deteriorated for the third month in a row in June, a survey showed on Monday, compounding expectations that Europe's largest economy contracted in the second quarter.   
The Ifo institute said its business climate index fell to 97.4 from 97.9 in May. The June reading compared with a consensus forecast for 97.2.   
  
The British pound went through a roller-coaster ride. Although cable briefly rose to a 1-month high at 1.2766 at European open, price fell to 1.2724 before rebounding to 1.2760. However, renewed selling emerged and knocked the pair down to session lows at 1.2708 in New York morning as investors took profit from recent gains ahead of conclusion of the Conservative Party leadership contest. Later, price recovered to 1.2746.   
  
In other news, Reuters reported U.S. President Donald Trump again criticized the Federal Reserve on Monday for not cutting interest rates, keeping up his pressure on the central bank to change its policies.   
"Despite a Federal Reserve that doesn’t know what it is doing - raised rates far to fast (very low inflation, other parts of world slowing, lowering & easing) & did large scale tightening, $50 Billion/month, we are on course to have one of the best Months of June in U.S. history," he wrote on Twitter.   
  
Data to be released on Tuesday :  
  
New Zealand imports, trade balance, exports, France business climate, UK CBI distributive trades, Canada wholesale trade, and U.S. building permits, redbook, monthly home price, CS home price, consumer confidence, new home sales, Richmond Fed manufacturing index.