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AUD/USD is back in the red, falling from 0.7050 in the Asian session on Friday, reversing the previous day's goodish rebound from a nearly two-month low amid a modest US Dollar uptick. Iran downplayed Trump's claim that a deal has been approved and said that key issues, including the Strait of Hormuz and frozen funds, remain unresolved. This keeps a lid on optimism, which, along with Fed rate-hike bets, revives USD demand and weighs on the pair.
USD/JPY recovers ground above 160.00 in the Asian session on Friday. Economic risks due to uncertainty in the Middle East undermine the Japanese Yen, while lifting the safe-haven US Dollar (USD) amid the US-Iran standoff. This acts as a tailwind for the pair, though fears of intervention could limit deeper JPY losses and cap the pair's rebound ahead of the BoJ meeting next week.
Gold is reversing the previous day's strong recovery from the YTD low and drops back below $4,200 in the Asian session on Friday. Despite Trump's claim that a peace deal with Iran has been approved, a standoff over the Strait of Hormuz and Tehran's frozen funds keep a lid on the latest optimism, injecting fresh life into the US Dollar bulls. The Greenback also draws support from hawkish Fed bets, following hot US inflation data.
Bitcoin steadies its recovery on Thursday, edging higher toward $63,000 despite incessant capital outflows. Meanwhile, altcoins, including Ethereum and Ripple, exhibit subtle rebound signs, trading above $1,650 and $1.12, respectively.
Warsh is starting his tenure at the Fed during a transition of sorts. Given the prior FOMC statement and the countless Fed speakers we’ve heard from since then, it seems Fed officials are in the midst of shifting toward a more neutral policy stance.
May's CPI put headline inflation at 4.2% on the year, up from 3.8% in April and the hottest reading since April 2023, while core prices rose just 0.2% on the month, undershooting the 0.3% consensus and halving April's pace.
