Gold Up Again On Rising Iran Tensions

USD Higher Despite Fed Easing Expectations

The US dollar has seen some net buying over the European morning on Tuesday following another weaker session yesterday. Despite some mild upside today, the main focus continues to be on expectations that the Fed will look to introduce fresh easing at some point over the coming months.

Indeed, the CME’s Fed-watch tool is now pricing a near 60% chance of a .25% cut in July and a roughly 40% chance of a .50% cut. USD index trades 95.54 last, with the price still hovering below the broken 95.72 level.

Looking ahead today on the data front US Consumer Confidence is the main focus while comments from Fed Chair Powell will also be watched by traders.

Euro Weakens on USD Strength

EUR/USD has softened today also, as a recovery in the US dollar takes the shine out of the recent rally. Outside of the support provided from recent dollar weakness, EUR has been under pressure given the expectations that the ECB will ease too. This is in line with Draghi’s projections over the last few weeks. EUR/USD trades 1.1383 last, with price having reversed from just shy of testing the 1.1424 level.

Pound Pushes Higher

GBP/USD has continued higher today as the recent rally back above the 1.2658 level support continues. The rally in GBP is likely being driven by speculation that Brexit could be pushed further back, or ultimately avoided altogether, given the current uncertainty within British politics. GBPUSD trades 1.2763 last, heading back up near the 1.28 level resistance.

Equities Traders Keep Focus On Fresh Easing

Risk assets have remained broadly neutral today following some softening yesterday as the market reacted to fresh US sanctions on Iran. While there is relief that military conflict has been avoided, for now, there is still concern over how Iran will deal with these sanctions. And the prospect of war remains very real. For now, SPX500 trades just atop the 2939.87 level, sitting just under the recent all-time highs seen in response to last week’s dovish FOMC.

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