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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.
EUR/USD builds on Friday’s pullback and revisits the 1.1380 region, or multi-day lows, in quite a negative start to the week. The pair’s extra losses come in response to the marked bounce in the US Dollar, supported at the same time by unabated tensions in the Middle East. In the meantime, investors continue to gear up for the upcoming US CPI data and the semiannual testimony by Chair Warsh.
Gold remains under marked downside pressure on Monday, breaking below the key $4,000 hurdle per troy ounce to trade closer to monthly troughs. The precious metal’s retracement comes in response to the extra recovery in the US Dollar and rising concerns surrounding the US-Iran conflict.
Bitcoin (BTC) and Gold (XAU) remain under pressure at the time of writing on Monday. The Crypto King has slipped below $63,000, while XAU approaches the psychologically important $4,000 support level. The drawdowns indicate that risk-averse sentiment is dominant as investors continue to assess the impact of renewed geopolitical tensions in the Middle East.
It’s a shaky start to the week for financial markets. The oil price has risen by nearly 4% and Brent crude is trading above $79 per barrel. This comes after more attacks between the US and Iran in the Gulf, and statements from the Iranian regime that it has closed the Strait of Hormuz.
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.
