Dollar firms on sanctions; yen gains on every major but the dollar

The US dollar found strength on safe-haven demand amid Iran sanctions, while the Japanese yen led intraday gains, and gold rallied.

Market overview

• The US dollar firmed today on safe-haven demand after a nearly 1% weekly loss, as heavier Iran sanctions were announced. Scotiabank noted the US Dollar Index's cautious rebound was capped near 100.
• Our strength gauge ranked the Japanese yen the strongest major intraday, which fits the headlines once the counterparty is named: the yen fell against the US dollar as it firmed on Iran sanctions, but held its ground elsewhere — EUR/JPY struggled at 187 and GBP/JPY was capped near 217.00, both amid intervention fears following the reported record intervention three weeks prior.
• The Australian dollar fell as Iran sanctions soured risk appetite, with the RBA meeting minutes, released since, confirming the board stands ready to raise rates if upside risks materialise. In contrast, the Canadian dollar slipped amid trade tensions, continuing to face pressure from US-Canada trade threats.
• The British pound held just above 1.3600, marginally lower on the day inside a 35-pip range, after printing a five-month high short of 1.3700 late last week. The Swiss franc was the weakest major for a third straight session.
• WTI crude steadied around $84.70 after losing more than 2% the day before, holding the $84-85 band as the sanctions traders had spent the week pricing in finally landed — the Treasury's "Operation Economic Outcast" targeting Iran's financial links.
• Gold rallied to $4,681, a fresh three-month high and up nearly 1.5% on the day, as Iran sanctions stoked haven demand — extending the run that cleared the $4,400 ceiling five sessions ago and resuming its traditional safe-haven role.

Market sentiment and upcoming events

• Our market sentiment gauge, the FSI, stands at 72 (Greed), indicating strong bullish bias. The MRS is at 58, showing moderate market readiness, while our carry trade score (CTS) remains high at 80.
• Traders await today's US CB Consumer Confidence data, forecast at 90.3, slightly lower than the previous 90.8.