Hormuz tensions drive the dollar to safety as gold slides to $4,100

Geopolitical tensions drive safe-haven demand for the US Dollar, while traders brace for the RBNZ's rate decision amid a divided committee.

Geopolitical tensions & safe havens

• The US Dollar found strength, bolstered by escalating tensions in the Middle East and increased safe-haven demand. Press reports pointed to renewed friction after Washington moved to revoke Iran's crude oil exemption and to reported incidents around the Strait of Hormuz — headlines that fed risk-off flows regardless of how events ultimately unfold.
• Gold declined to nearly $4,100, impacted by the renewed US-Iran tensions.
• The Australian Dollar fell as the risk-off tone around the Strait of Hormuz headlines contributed to the US Dollar's rise.
• The Euro was the strongest major on an intraday basis per our proprietary metrics, even as FXStreet noted its "best arguments sink in the Strait of Hormuz" — the safe-haven bid for the Dollar capping its gains despite that relative strength.

Central bank watch & currency moves

• The Japanese Yen edged higher as "fears of intervention" resurfaced, following Japan's significant May current account surplus of 3.968 trillion yen.
• The New Zealand Dollar was the weakest currency on an intraday basis, ahead of a highly anticipated RBNZ rate decision. Headlines predict the RBNZ is set to raise rates after three pauses, facing a "deeply divided" committee, in a potential "déjà vu of the May decision."
• Our MRS stands at 59, reflecting a neutral stance, while the CTS is elevated at 81. The FSI indicates a neutral sentiment at 56.

Key events today

• NZD · Official Cash Rate, RBNZ Rate Statement, RBNZ Press Conference · Forecast OCR 2.50% vs. previous 2.25% (all SCHEDULED)
• CHF · SNB Chairman Schlegel Speaks · SCHEDULED
• USD · FOMC Meeting Minutes · SCHEDULED