Dollar Gains Broadly as US-Iran Clashes Deepen and DXY Nears 100
Updated
Updated · ING Think · Jun 4
Dollar Gains Broadly as US-Iran Clashes Deepen and DXY Nears 100
3 articles · Updated · ING Think · Jun 4
Summary
Broad dollar demand strengthened after fresh US-Iran military exchanges and firm US data left the greenback the only clear FX winner, with analysts saying it is hard to argue against further gains.
ADP payrolls, ISM services and the Fed’s Beige Book all pointed to a resilient US economy, reinforcing a risk-off move that has pushed key pairs toward break levels.
EUR/USD is testing 1.160 and could slide to 1.150 before next week’s ECB meeting, even if the ECB still delivers a 25bp hike with a hawkish tone.
USD/JPY is pressing 160.0, USD/CAD 1.390 and DXY 100, with those breaks seen as likely unless Middle East diplomacy quickly improves sentiment.
The stronger dollar is also pressuring emerging-market trades such as Brazil’s real, though ING expects BRL support to re-emerge near 5.14 given high yields and Brazil’s energy-exporter status.