Tanker attacks lift oil near $90 as holidays thin the dollar's bounce

Iran and the US exchanged tanker attacks over the weekend, pushing WTI back towards $90.00, and both US and Canadian markets are closed for the holiday — so Friday's payrolls bounce is being tested on thin liquidity.

Major currency moves

• The dollar is softer in Asian hours, struggling to hold Friday's gains from a "big beat" in US non-farm payrolls that lifted September Fed rate-hike odds. FXStreet points at a Goldman Sachs note arguing this week's inflation data is the pivotal number.
• The yen is the clearest expression of that: USD/JPY kicks off the week on a softer note just below 156.00, consolidating near its August highs, a point above the 155.00 MUFG flags as support, as hawkish Bank of Japan and Fed bets clash before the BoJ meets on 18 September. Friday's story was the yen easing after its huge rally; Investing is now asking whether that rebound is real at all.
• The Australian dollar holds above 0.7200, near 0.7205, despite the strong US payrolls, with FXStreet pointing at China's finance ministry, which will inject $54 billion into its largest banks and insurers to shore up balance sheets, per a Bloomberg report on Sunday.
• Sterling edges higher near 1.3520 even as Fed hike odds rise, because the dollar is the one struggling. Separately, UK recruiters reported the first increase in permanent staff hiring since 2022.
• USD/CHF ended Friday near 0.8098, its NFP rally having stalled at 0.8100 after a 0.8126 high.
• The dollar index ended Friday around 99.00, up 0.17% on the payrolls beat but still under the 200-day average it lost on Thursday. That line was the tell we left open on Friday — and with US markets shut there is no close today to settle it.
• Our intraday strength gauge puts the New Zealand dollar top and the Canadian dollar bottom. That is a full crossing for the kiwi, which topped our 01:00 weakest-major reading on both Thursday and Friday; the loonie sits at the other end with Canada shut for the day, a −41.7K August jobs print behind it and its Section 338 retaliation on US goods due to start tomorrow.

Geopolitics and the week ahead

• Iran said it targeted three oil tankers using an unauthorised route through the Strait of Hormuz, along with a number of US-linked ships, in retaliation for US attacks on Iranian tankers over the weekend, and will declare a "prohibited zone". WTI has climbed back to around $90.00 from about $88.50 at Friday midday, minutes before payrolls; investingLive flagged oil, gold and equities as the ones to watch through the holiday. Gold has not printed since Friday's post-payrolls drop, so the $4,282-$4,500 range the week left marked goes into the holiday untested.
• OPEC+ agreed on Sunday to keep its output policy unchanged for October, needing new quotas before it decides its next step. The latest Commodity Futures Trading Commission (CFTC) report has an oil rebound offsetting a broader positioning retreat, with yen shorts showing the largest deterioration.
• Commerzbank reads China's August services PMI rebound as resilience in private-sector activity, but weak retail sales, soft inflation and higher unemployment still point to fragile domestic demand — which keeps the People's Bank of China (PBoC) cautious.
• Two dates frame the rest of the week: the ECB on Thursday, where the main refinancing rate is forecast to go from 2.40% to 2.65%, and US CPI on Friday, forecast at 0.4% month-on-month against 0.1% previously. The second is the one that decides September.
• Our proprietary metrics show the MRS at 63, the CTS at 80 and the FSI at 68, a "Greed" reading. These are our 01:00 UTC snapshot, taken in the Asian session before Europe opens.