- Traders await fresh direction after recent USD-dominated market sentiment.
- Risk tone remains modestly flat amid the anti-greenback move.
- Political plays to grab the spotlight amid a lack of major data/events on the economic calendar.
Forex today remains quiet at the start of a fresh week amid fewer catalysts to follow. However, risk sentiment seems to have changed as the safe havens are stepping back from further upside while Antipodeans benefit from the US Dollar’s (USD) pullback. Also, the British Pound (GBP) enjoys receding political uncertainty at home whereas Crude also recovers amid likely extended supply cuts and the US-Iran tussle.
While negative headlines concerning the US trade relations with China and India extended earlier risk-off moves at the start of Monday’s trading, investors turned their back to the USD afterward.
As a result, the Antipodeans like Dollars of Australia and New Zealand benefited from the greenback’s decline and recovered some of their latest losses.
On the other hand, the Euro (EUR) recovered due to hawkish comments from the European Central Bank’s (ECB) Vice President Luis de Guindos whereas the British Pound (GBP) cheered Health Minister Matt Hancock’s exit from the PM’s race while supporting the frontrunner Boris Johnson.
Crude also registers gains as Saudi Arabia’s Energy Minister Khalid al-Falih indicated extension to the present supply cuts between the Organization of the Petroleum Exporting Countries (OPEC) and its allies when they meet in July.
Adding to the energy optimism could be statements from Iran’s semi-official newsletter that signaled further scaling back of nuclear commitments to retaliate against the US moves.
Global markets supported the US Dollar (USD) on Friday after upbeat retail sales and industrial production cooled down the expectations of the Fed’s rate cut. However, trade woes between the US and China, coupled with the US-Iran political tussle, continued questioning macro risk sentiment.
Macro risk barometer, the US 10-year treasury yield remains little changed to 2.08% by the press time.
Moving on, the NY Empire State manufacturing index and NAHB housing market index are the only details that can push traders to the economic calendar during the day. As a result, it becomes safe to say that political plays can keep dominating near-term market sentiment.
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