The U.S. Dollar is trading mostly unchanged across the board following yesterday’s Fed meeting and press conference in which Chairman Jerome Powell admitted some concern over the conflict with Iran
The sentiment is echoed in by other central bankers throughout other trading sessions globally as oil prices have reached some scary levels.
Brent Crude is now trading above $115.00/barrel after intense attacks over energy facilities all over the Persian Gulf with Tehran retaliating against neighboring nations. Powell along with other financial authorities handled talking about it with caution, but it is worrisome for inflation for all. At the time of writing, things started souring for the Buck a bit.
A metals sell-off is also worth watching with Gold prices dropping by 6.0%. Additionally, copper’s 2026 gains have been erased. Following the Fed’s relatively “hawkish” showing, odds for an interest rate cut coming in 2026 have fallen dramatically with most traders saying it will be kicked until 2027. With a lack of any other major data releases, the FX needle will be at the mercy of headlines as the escalation of the war intensifies.
What to Watch This Week…
- USA Online is always open
JPY ⇑
The Japanese Yen is on the rise as the Bank of Japan’s meeting also resulted in keeping interest rates untouched while emphasizing that inflationary pressures are indeed mounting. Officials in the BOJ sounded relatively calm and confident as they explained their willingness to increase interest rates as long as the economic outlook remains steady. While intervention has been speculated upon because of Yen weakening, the recent spike has taken it away from its lowest value over the Buck since July 2024. BOJ Head Kazuo Ueda says it is imperative to watch the impact of Yen on rising prices.
MXN ⇓
The Mexican Peso has been jumping all over and is now down to its weakest point against USD since mid-January. With the prices of metals falling, the Peso and other Emerging-Market tender are also taking a hit with a flight toward the Buck in order to get oil. Over 80.0% of oil transactions are done in USD and along with a stable Fed it is making the Buck a safe haven. Inflation gauges as well as the central bank, Banxico, meeting will be crucial to MXN next week.
