USD & Trump's 'Economic D-Day' For Iran
Fresh Iran Sanctions
The US Dollar is starting the week on a tentative footing today as traders await an announcement from US Treasury Secretary Bessent later regarding new sanctions to be applied against Iran. Tensions between the US and Iran remain elevated following the expiry of the 60-day interim peace window last week. Neither side has showed any interest in renewing the ceasefire window. Instead, Trump is preparing to unleash a so-called ‘economic D-day’ with the new sanctions set to be announced later today.
Trade Flows on Watch
Traders will be looking to gauge the extent to which these new sanctions will threaten world trade. For example, China is the largest buyer of Iranian energy exports and any move from the US to try and restrict these purchases, threatens to further strain US/China relations. This comes on the back of US/Canada trade negotiations breaking down over the weekend leaving the US and Canada more divided once again. For the US Dollar, the outcome of all this expected to be a net negative with the greenback likely to drift lower this week on the back of today’s sanctions announcements. Looking ahead this week, we’ll also have the latest core PCE data as well as Kevin Warsh’s Jackson Hole speech on Friday, both of which could impact Fed rate-hike expectations and, consequently, USD direction.
Technical Views
DXY
The sell-off in the index has stalled for now ahead of the 98.24 level, though price remains below 99.15 for now. While that level holds above, focus is on a further drift lower. With 98.24 the next test. If we do recover higher, 100.18 will be the next big test for bulls.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.