The US dollar is exhibiting a marginally stronger position against the majority of currencies today. Recent hostilities in the Middle East conflict have dampened expectations for a prolonged ceasefire; however, such clashes are typical in these contexts. On Polymarket, the probability that the Strait of Hormuz will open by the end of June has decreased to approximately 45%, down from a high of nearly 60% at the conclusion of the previous week. August Brent crude oil is recovering from yesterday’s significant decline of nearly 6.8%, yet it remains predominantly below the $97 per barrel threshold. July WTI is slightly under $92 following a settlement last week close to $96.60. Outside of the Middle East, the news flow is subdued, and the North American reaction to the geopolitical developments will establish the tone for the remainder of the session. Despite the offshore yuan remaining relatively stable, the PBOC established the dollar’s reference rate at a level not seen in three years. The Reserve Bank of New Zealand convenes tomorrow morning and is anticipated to maintain its target rate at 2.25%.

The euro experienced an uptick yesterday during early Asia Pacific trading, driven by optimism surrounding a potential agreement between the US and Iran. It concluded the previous week marginally above $1.1600 and did not experience trading below $1.1620 yesterday. In light of the ongoing reports regarding US-Iranian clashes, the euro exhibits a stable trading pattern today, maintaining its position above the low recorded yesterday. Last week’s high was slightly above $1.1660, while yesterday’s gains encountered resistance just before reaching $1.1655. It returned to session highs near 1.1645 in subdued European turnover today. Options for 2.2 billion euros at $1.1650 are set to expire today. A move above last week’s high encounters the next obstacle in the $1.1680-90 range. The dollar reached its zenith last week at approximately JPY159.35. It concluded the week just under JPY159.20 and saw minimal trading above JPY159 yesterday. It is trading firm today against the yen and reached almost JPY159.25. It has maintained its position above the low recorded yesterday (approximately JPY158.75). Initial support is observed in the range of JPY158.50-60, with a potential breach aiming for the JPY158 level.

Sterling ascended past $1.3500 yesterday, achieving a seven-session peak of approximately $1.3510. It breached the 20-day moving average but closed beneath it (~$1.3500 today). The 61.8% retracement of this month’s losses is slightly above $1.3520. A move above that level could potentially catalyse an additional half-cent increase in the near term. Sterling is currently consolidating within the range established yesterday, having identified initial support at approximately $1.3465. In the prevailing soft US dollar environment, the Canadian dollar, as is frequently observed, remains the laggard. It increased by less than 0.1% relative to the greenback, marking the smallest gain among the G10 currencies. The Norwegian krone, exhibiting a heightened sensitivity to fluctuations in oil prices, experienced an increase of more than double that of its counterparts.

The US dollar experienced a pause before the weekend, hovering around CAD1.3825, and maintained this level yesterday, with minimal selling pressure observed below CAD1.38. Today, it is trading quietly within a range of approximately CAD1.3800 to CAD1.3815. Options valued at approximately $425 million at a rate of CAD1.3785 are set to expire today. The market exhibited minimal response to the escalating trade tensions between the US and Canada, as Canada increased the requirement for streaming services to allocate 15% of their revenue to local programming, up from the previous 5%. The series of inside trading sessions, akin to a spring coiling, faced a challenge yesterday as the Australian dollar ascended to $0.7175, marking a three-session high. It has remained restricted to approximately one-fifth of a cent below the high recorded yesterday. Last week’s high was closer to 0.7185 and the 20-day moving average is slightly above that level.