The U.S. Dollar is trading in mixed ranges this morning as the U.S.-Iran ceasefire holds after fresh hostilities erupted yesterday.
At least two ships transited the Strait of Hormuz on Monday with U.S. assistance in defending from Iranian attacks, and the United Arab Emirates reported that it intercepted approximately 20 projectiles fired from Iran, but that an oil terminal in the port city of Fujairah was struck. Hundreds of vessels are gathering in the Persian Gulf near Dubai, which lies just outside the Iranian defined ‘control zone,’ as the shipping industry exercises immense caution amidst Iran’s attempts to keep the Strait on lockdown. Two U.S. warships have entered the Gulf to attempt to level the balance of power and increase capacity to guide ships through the Strait.
What to Watch This Week…
- Monex USA Online is always open
AUD ⇑
The Australian Dollar is up against the Greenback this morning after the Reserve Bank of Australia hiked interest rates by 25-bps in an 8-1 vote. This marks the third consecutive hike from the RBA and has officially reversed every cut made last year. The central bank feels that it is now well positioned to ‘sit and see what happens,’ according to Governor Michele Bullock, with policymakers watching to see if inflation expectations will stay anchored. The RBA’s next meeting will occur on June 16th.
JPY ⇓
The Japanese Yen is down against the Buck this morning following large interbank offers on the currency made early in the European trading session, likely in response to the as-yet-unconfirmed intervention performed by Japanese monetary authorities yesterday. The International Monetary Fund’s framework for intervention specifies that any action taken over three consecutive business days is counted as single intervention event, which would mean that yesterday’s action would be considered the same event as the confirmed intervention last Thursday. The framework also allows for three interventions in a six-month period. This is fueling speculation among Traders that Japanese authorities will take additional action to support the Yen in the near future.
