Forex Today: Dollar up as recession fears sound out loud

Valeria Bednarik FXStreet

What you need to take care of on Tuesday, June 7:

The market sentiment changed from optimism during Asian trading hours to pessimism during US ones. The early good mood was backed by hopes that the global economic situation would start improving after Beijing continued lifting coronavirus-related restrictions.

The sentiment turned south with Wall Street's open, as investors fear the US Federal Reserve will maintain its aggressive momentary policy, which will boost the chances of a recession in the country. The upbeat Nonfarm Payrolls report released last Friday underpinned such speculation.

US Treasury yields soared, with the yield on the 10-year note yielding as much as 3.04%.

The American dollar started the day on the back foot but strengthened in the second half of the day, ending the day with gains against all of its major rivals.

The EUR/USD pair is sub-1.0700, although action around it was limited by a holiday in Europe. GBP/USD trades around 1.2530 after UK Prime Minister Boris Johnson's confidence vote. 211 Conservatives voted in favor of Johnson, while 148 said they had lost confidence in the PM.

Commodity-linked currencies trimmed early gains and settled around their opening levels, with AUD/USD hovering around 0.7200 and USD/CAD trading around 1.2580.

Safe-haven assets were among the worst performers. Gold is down to trade around $1,841 a troy ounce, while USD/JPY reached a fresh multi-year high of 132.00, now a handful of pips below the level. The USD/CHF pair is up to 0.9705.

Crude oil prices edged lower, with WTI now trading at $118.20 a barrel.

The Reserve Bank of Australia takes centre stage as it will announce its monetary policy decision early on Tuesday.

Like this article? Help us with some feedback by answering this survey:

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD climbs to daily highs near 1.1820

EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.

GBP/USD trims losses, retests 1.3460

After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.

Gold flirts with four-week highs past $5,200

Gold extends its rebound, climbing for a third consecutive session and pushing back above the $5,200 mark per troy ounce on Friday. The move higher continues to draw support from lingering geopolitical tensions and the ongoing uncertainty surrounding US trade policy, both of which are keeping safe-haven demand firmly in play.

Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

Breaking: US and Israel attack Iran, risk aversion to sweep global markets

Early Saturday, United States (US) President Donald Trump announced that the US had begun “major combat operations” in Iran, following Israel’s pre-emptive missile attacks against Tehran.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

Starknet, the Ethereum Layer 2 network developed by StarkWare, today announced strkBTC, a wrapped Bitcoin asset that introduces optional shielding while preserving full DeFi composability.