Dollar sees mixed signals amid geopolitical tensions, key data awaited

The dollar faces conflicting forces of geopolitical risk and fading Fed hike bets, while the New Zealand dollar leads gains and Canadian tariff talks remain uncertain.

Dollar and geopolitical tensions

• Our intraday strength gauge still ranks the dollar as the weakest major currency today — the tail of the slide that took it to two-month lows yesterday. However, that is where the reversal shows: reports suggest the greenback is firming amid nervousness over Hormuz and Middle East tensions, with US President Trump reportedly stating no talks with Iran and a naval blockade remaining. On a broader market view, our FSI is at 68, indicating 'Greed,' while the MRS sits at 47 — down from 66 on Monday, a 19-point slide in two sessions that leaves readiness low for significant moves — and our CTS holds at 80, still favouring carry positioning.
• The euro strengthened above 1.1550 as Federal Reserve rate hike bets reportedly diminished, countering the dollar's safe-haven support. Traders await the FOMC Meeting Minutes later today.
• The Canadian dollar extended its losses amid uncertainty over potential new 50% tariffs on Canadian goods. US President Trump reportedly weighs a waiver before a midnight deadline.

Other major currencies and gold

• The New Zealand dollar leads gains today — a full turn from Monday, when it was the weakest major on our gauge — supported by an increase in its Producer Price Index for Q2 2026. Headlines also noted the kiwi was stable amid a firm US dollar.
• The pound sterling is back at the three-month high it could not hold yesterday, ahead of the UK CPI y/y data scheduled for release today.
• Crude oil extended its gains for a fourth straight session to around $84.80, closing on $85.00, as the same Hormuz standoff that is bidding the dollar keeps the market tight.
• Gold stabilized below $4,350, turned back again by the $4,400 ceiling it has been fighting for four sessions, as yields at two-decade highs reportedly offset reduced Fed rate hike expectations.

Key events today

• GBP · CPI y/y · Forecast 2.9% vs previous 2.6% (Scheduled)
• USD · FOMC Meeting Minutes · Scheduled