FX Daily: Re-Escalation and Data Make USD Sole Winner

The US dollar is strengthening as a safe-haven asset following US-Iran tensions and robust US economic data. This strength is pushing EUR/USD toward 1.150 and challenging emerging market currencies like the Brazilian real.

Key Takeaways

• 1.The US dollar is finding broad support due to US-Iran military re-escalation and resilient US economic data (ADP and ISM services).
• 2.EUR/USD is vulnerable to a drop to 1.150 as a lack of progress in Middle East negotiations outweighs hawkish ECB expectations.
• 3.The Brazilian real is facing headwinds from the strong dollar and US tariff threats, catching up with a hawkish shift in local interest rates.

Table of Contents

• USD: Stronger and stronger
• EUR: Looking down
• BRL: FX plays catch-up with rates
• CEE: Inflation may decide CNB June rate hike
• Author
• Disclaimer

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