The dollar index rose by 0.03% on Wednesday amid conflicting reports about a potential US-Iran agreement to reopen the Strait of Hormuz. Iranian media claimed to have a draft memorandum stating that the US would lift its naval blockade in exchange for Iran allowing commercial shipping. However, US officials dismissed this draft as a “complete fabrication.” The dollar’s recovery was further supported by the May Richmond Fed manufacturing survey, which increased to a 4.5-year high of 13, surpassing expectations of 4.
The euro fell by 0.01% after rising to a one-week high earlier in the day. This decline was influenced by the dollar’s rebound and a downgraded 2026 GDP forecast for Germany, now projected at 0.5% from the previous estimate of 0.9%. Additionally, swaps markets are indicating a 92% chance of a 25 basis point rate hike by the ECB at its next meeting on June 11.
In Japan, the yen reached a 3.5-week low against the dollar as April PPI service prices increased less than expected, and markets are pricing in a 73% chance of a rate hike by the BOJ on June 16. Meanwhile, crude oil prices dropped by over 5%, leading to lower inflation expectations and affecting the commodity markets, with gold falling to a 1.75-month low.
5 Stocks Our Experts Predict Could Double In the Next Year
By submitting your email, you'll also get a free pivot & flow membership. A free daily market overview. You can unsubscribe at any time.
