Cautious Markets into Peace Talks – Dollar Hits Fresh High – DXY at 101.12
Global markets finished the week on a softer note as concerns over the Middle East returned after US and Iranian negotiators called off peace talks on Friday. With US markets largely closed, trading conditions were relatively quiet, although news over the weekend that discussions have resumed in Switzerland could help improve sentiment when markets reopen on Monday.
The US dollar edged 0.09% lower on Friday to close at 100.76, although the greenback remains near 13-month highs after recording its strongest weekly advance in a month. Expectations that the Federal Reserve will be looking at a minimum of one 15-basis point hike this year have helped support the dollar over the last few days
Energy markets moved higher as traders responded to the latest developments surrounding the US-Iran peace process. Brent crude rose 0.90% to settle at $80.57 per barrel, while WTI crude climbed 0.91% to $76.54. The renewed diplomatic efforts over the weekend will remain a key focus for oil markets in the days ahead.
Precious metals remained under pressure, with gold falling 1.15% to $4,160 an ounce and ending the week near its lowest levels of the year. The combination of a firm US dollar and higher US yields following the Fed meeting has continued to weigh on investor demand for the safe-haven metal.
Oil Traders Prepare for More Moves Ahead
Just when everything seemed to be moving in the right direction, updates on the Middle East peace talks over the weekend have got Oil traders back on full alert for more volatility in the days ahead. News that Iran have closed the Strait of Hormuz again and more aggressive statements from President Trump with regard to the Strait and the ongoing conflict between Israel and Hezbollah in Lebanon has seen oil prices rally over 2% this morning and markets are poised for more moves as the day progresses. The fact that the talks are proceeding has to be a positive sign, however updates seem to differ from either side which adds extra caution for now with support for both major contracts now sitting at last week’s lows which could come under threat if we do see more progress in talks, however resistance levels which are near last week’s opening prices now look more likely to be challenged given the aggressive rhetoric we are seeing on the newswires.
Geopolitics to Dominate on First Trading Day of the Week
Looking ahead, geopolitical developments are once again likely to dominate market sentiment. Traders will be closely monitoring updates from Switzerland as negotiations between the US and Iran resume, particularly after President Trump warned that military action could restart should Hezbollah continue attacks on Israel or if Iran closed the Strait of Hormuz again. The economic calendar is relatively quiet today, although there are couple of key events that could see moves in local markets. Attention during the Asian session will be on China’s Loan Prime Rate decision early in the day with the 1-year and 5- year expected to remain on hold at 3.00% and 3.50% respectively. There is little on the cards in the European session, although we do get our first (of many) major central bank speaker of the week midway through the day when ECB President Christine LaGarde speaks. While the North America session welcomes US markets back after a long weekend, the data focus will be north of the border for Canadian inflation data – with the key CPI numbers due out (exp +0.7% m/m, Median +2.1% y/y, Trimmed +2.0% y/y).
Explore all upcoming market events in the Economic Calendar.
The post General Market Analysis – 22/06/26 first appeared on IC Your Trading Edge | Official Blog.