From Marc Chandler at Bannockburn Global Forex:
The US dollar recovered in late turnover ahead of the weekend and has extended its recovery today in holiday-thin trading. Japan, China, and UK markets are closed. The ceasefire in the US-Iran war looks fragile as Washington says it will begin escorting ships out of the Strait of Hormuz and Tehran threatens to attack the ships. June WTI is trading above the pre-weekend high and 10-year benchmark yields are jumping.
Washington announced two measures at the end of last week. It first announced tariffs on European vehicles would be raised to 25% from 15% and that at least 5k troops would be removed from Germany. The tariff increase was said to be in response to Europe’s failure to implement the trade agreement that requires it to purchase $750 bln of US energy. US troops in Germany were never sufficient to defend it against a Russian invasion but served as a tripwire that would trigger US military might. The removal of 5k troops unwinds the increase after Russia’s invasion of Ukraine in 2022. Yet, the context in which it was done gives the appearance of punishment for Chancellor Merz’s criticism of US war on Iran....
....MUCH MORE
