Market wrap: dollar rises modestly, Iran in focus -

Analysts at Westpac offered a market wrap, noting that the US dollar rose modestly against most major currencies, but in thin trade given the London holiday. 

Key Quotes:

"Much of the focus in holiday-thinned northern hemisphere trade was on the US decision on the Iran nuclear deal.

UK foreign minister Johnson spoke on US TV networks in favour of keeping the deal while there were competing headlines about the chances that President Trump might change his mind. It seems highly unlikely that Trump will keep the US in the deal, which analysts expect will limit Iran’s oil export volumes. This has been a factor in driving oil prices to highs since late 2014. Brent crude has risen 18% since early March. Trump tweeted that the announcement will be at 2pm Tuesday NY time.

AUD/USD slipped under 0.7500 for a while then edged back to 0.7515/20, down 0.3% over the day. NZD/USD similarly dipped under 0.7000 but then recovered to be flat on the day, trimming AUD/NZD by 25 pips overall, to 1.0710 late NY.

EUR/USD fell from 1.1960 to 1.1898 (four-month low) before consolidating. Sterling and the Japanese yen outperformed, GBP/USD eking out a 0.2% gain while USD/JPY was net unchanged around 109.00. CAD was volatile at times, sensitive to the swings in oil prices on various headlines on Iran.

There was no major data but there was some Fedspeak. Bostic (voter, dove) said he is comfortable with an overshoot of the 2% inflation target, with little sign of wage pressure; Barkin echoed the wage comments. The US 10yr treasury yield was little changed around 2.95%, likewise 2yr yields around 2.50%. Fed fund futures yields continued to view a rate hike in June as almost a done deal, plus another by year end (matching Bostic’s baseline view)."