USD: Another Reason to Smile

The USD remains strong due to widening rate spreads and hawkish Fed sentiment, despite tentative signs of a US-Iran ceasefire deal boosting risk appetite. Markets are focused on upcoming US PCE inflation data and RBA rate hike prospects.

Key Takeaways

• 1.The USD is currently driven by relative interest rate spreads and hawkish Fed expectations rather than solely safe-haven flows.
• 2.Optimism surrounding a potential US-Iran deal to reopen the Strait of Hormuz is fostering 'risk-on' sentiment in global markets.
• 3.AUD/USD is buoyed by risk appetite and high domestic inflation, but further RBA hikes may be delayed if cyclical data continues to weaken.

Table of Contents

• Asia overnight
• Deal or no deal?
• USD: another reason to smile
• AUD: helped by the hope of a deal
• Introducing RMA!
• FX Research advanced tools
• Red Mount Analytics
• Global Markets Research contact details

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