From Marc Chandler at Bannockburn Global Forex:
The North American market understood yesterday’s Fed statement and the three dissents in favor of a neutral bias as a hawkish hold and rallied the dollar in response. Follow-through selling today has been minimal and the greenback is sporting a softer profile. The strongest currency today is the Japanese yen, which had fallen to its lowest level since July 2024, before heightened Japanese verbal intervention. The threats of material intervention were successful, and the dollar reversed lower from the JPY160.70 area to fray JPY159.00 in the European morning.
Meanwhile, reports suggesting that the US is considering new military strikes on Iran amid the stalled talks after President Trump reject Iran’s proposal. However, after the initial flurry that lifted oil futures to new highs, both the June WTI and July Brent contracts have reversed lower and ahead of the North American open, both are off around half-of-a-dollar. The outcome of the BOE and ECB meetings are awaited. Both are expected to attempt a hawkish hold. Lastly, on the back of strong capex, the US reports its first look at Q1 GDP today. The median forecast in Bloomberg’s survey is for a 2.3% annualized pace, while the Atlanta Fed’s tracker is almost half of it (1.2%)....
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