USD Mixed as North American Session Begins

The US dollar is experiencing mixed movements against the three major currency pairs: EUR/USD, USD/JPY, and GBP/USD, while the Australian and New Zealand dollars are gaining ground due to risk-on flows. This shift in sentiment is partly attributed to reports suggesting mediators have proposed a 10-day cessation of strikes between Iran and the United States, aimed at reviving negotiations on an interim agreement. A senior Iranian source cited by Reuters indicated that Iran remains open to negotiations that align with its national interests, although it continues to assert that its sovereignty over the Strait of Hormuz is non-negotiable.

These developments have alleviated concerns of an immediate escalation in the region, resulting in a sharp decline in oil prices, which are currently trading at $80.00, down $1.80 from earlier highs. The day's peak reached $84.60, marking the highest level since June 12, before retreating. The price has dipped below its 100-hour moving average of $80.23, with a low of $79.58. This moving average will serve as a critical indicator for market participants; a sustained drop below it could lead to further declines, with support anticipated at $77.84, near the lows observed earlier in the week.

In the UK, newly appointed Prime Minister Andy Burnham has outlined his government’s strategy, emphasizing the use of public procurement to reindustrialize the country while adhering to fiscal discipline. He is set to unveil new cost-of-living measures and has pledged to accelerate council housing construction. Burnham reaffirmed the UK’s commitment to support Ukraine and indicated that his first calls as prime minister will be to US President Trump and Ukrainian President Zelensky.

In the US, Treasury yields are rising at the start of the North American session: the 2-year yield is at 4.189% (+1.7 basis points), the 5-year yield at 4.294% (+2.15 basis points), the 10-year yield at 4.565% (+2.4 basis points), and the 30-year yield at 5.083% (+1.9 basis points). US futures indicate a higher open, with the NASDAQ up 201 points, the S&P 500 up 17 points, and the Dow Jones Industrial Average up 94 points.

Additionally, congratulations are in order for Spain on their World Cup victory.