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FXStreet
Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.
The British Pound comes under extra selling pressure at the beginning of the week, dragging GBP/USD to fresh three-day troughs near 1.3350. Cable’s steady drop follows the improved tone in the Greenback as effervescence in the Middle East remains everything but abated.
The EUR/USD pair posts modest gains near 1.1385 during the Asian trading hours on Tuesday. Nonetheless, the potential upside for the major pair might be limited amid renewed US military strikes against Iran. Traders will take more cues from the US June Consumer Price Index inflation data, which will be released later on Tuesday.
Gold hits a nearly two-week low, around $3,982, during the Asian session on Tuesday and seems vulnerable as escalating US-Iran tensions continue to benefit the safe-haven US Dollar. Moreover, the closure of the Strait of Hormuz lifts Crude Oil prices higher, reigniting inflation fears and bolstering Fed hike bets. This further underpins the buck as traders look to the US CPI report and Fed Chair Kevin Warsh's testimony before placing fresh directional bets on the non-yielding bullion.
Bitcoin traded near $62,000 on Monday, holding onto recent gains as investors adopted little conviction ahead of key macroeconomic reports this week. In a report on Monday, QCP analysts highlighted that Tuesday's US Consumer Price Index data could be the first major catalyst to decide the market's direction.
Wall Street finally ran into the collision course it had spent weeks pretending would never happen. Oil surged, bonds sold off, the dollar caught a bid, and the most crowded corner of the equity market began to buckle under its own weight.
Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June FOMC meeting landed mid-round-trip, describing a world that had already stopped existing.
