DXY

Introduction: The Calm Before the Storm

Tuesday was a day of cautious optimism for the British pound EURGBP ... and the euro. Both currencies posted modest gains as markets paused to reassess the pace of the US dollar’s appreciation. Geopolitical tensions in the Persian Gulf continue to support demand for the American currency, but investors are reluctant to make sharp moves ahead of key US inflation data.

The pound sterling rose to $1.3375, gaining 0.20%. The euro strengthened to $1.1395, adding 0.13%. These are modest moves, but they reflect an important shift in market sentiment: the dollar, which has dominated the markets in recent weeks, is beginning to lose momentum.

However, pressure from the dollar remains the dominant force. The renewed blockade of the Strait of Hormuz pushed Brent crude oil to $84 per barrel, providing additional support for the US currency. In this article, we will examine all the factors affecting the pound and the euro, assess their prospects, and attempt to determine where these currencies may move in the coming days.

The Pound: Modest Growth Driven by Broader Dollar Dynamics

A 0.20% Increase

The pound sterling rose to $1.3375, gaining 0.20%. This was a relatively small increase, but it occurred against the backdrop of a broader weakening of the dollar ahead of the release of inflation data.

The pound’s advance was driven by general US dollar dynamics rather than any factors specific to the United Kingdom. British political and economic developments had almost no impact on Tuesday’s trading.

Lack of Domestic Drivers

No significant UK economic data were published on Tuesday, and there were no notable comments from Bank of England officials. The pound moved primarily in line with broader US dollar trends.

This means that any movements in the pound over the coming days will depend on external...

Introduction: A Quiet Morning on Asian Markets

Four o’clock in the morning GMT. Asian markets are waking up, traders in Tokyo, Shanghai, and Singapore are taking their seats in front of their screens, and the first sip of coffee coincides with the first glance at market quotes. Gold is rising. Not dramatically, not explosively, but steadily—up nearly 1% during the morning session. August gold futures have climbed to $4,340.17 per ounce, reaching new local highs and prompting investors around the world to ask: what is happening?

At first glance, the backdrop does not appear particularly favorable for gold. The U.S. dollar remains near two-month highs following hawkish signals from the new Federal Reserve chairman. Treasury yields are rising, making alternative assets less attractive. Under normal circumstances, both factors would put pressure on the yellow metal. Yet gold is not only holding its ground—it is advancing.

Silver, gold’s faithful companion, has surged 2.33% to $69.12 per ounce. Even copper, which suffered a sharp decline the previous day due to the Fed’s rhetoric, managed to gain 0.33% to $6.38 per pound on Thursday. It appears that Asian trading is being driven by a sentiment that cannot be explained by economic logic alone.

What is behind this rally? Why is gold ignoring a strong dollar and a hawkish Federal Reserve? And what should investors expect from the precious metal in the coming weeks? Let’s take a closer look.

Gold’s Paradox: Rising Against the Odds

A Hawkish Fed and a Strong Dollar—Gold’s Traditional Enemies

If you are even somewhat familiar with financial markets, you know the golden rule (pun intended): gold and the U.S. dollar typically move in opposite directions. When the dollar strengthens, gold tends to decline. When the dollar weakens, gold usually rises. It is a correlation that has held...

Wednesday — a day when oil doesn’t know where to go

You wake up on Wednesday, open your terminal, and see that WTI crude is trading at $75.82 per barrel. That’s a 0.30% drop over a few hours. The session low is $75.52. Resistance is at $87.23, but it now feels so far away it might as well belong to another world.

Oil is down nearly 14% from its early June highs. It has broken below the $80 support level and is now hovering around $75–76. Brent is also declining — down to $78.78, -0.23%. The spread between the two benchmarks has widened to $2.96, suggesting that Brent still carries a geopolitical premium, albeit a small one.

What’s happening? Two main factors. First — a peace agreement between the US and Iran, which continues to pressure prices. Second — anticipation of today’s Federal Reserve meeting.

Oil is trapped. Peace with Iran is bearish for prices because Iranian crude returns to the market and the Strait of Hormuz reopens. But the Fed is a source of uncertainty. If Kevin Warsh turns out to be “hawkish,” the dollar will strengthen and oil will fall further. If he is “dovish,” the dollar will weaken and oil could find support.

For now — it’s a decline. A third straight session (after Monday and Tuesday). Oil is getting cheaper, and no one knows where the bottom is.

Let’s break down what’s driving this and where oil might go next.

Peace with Iran: the main driver of the decline

On Monday, oil plunged on news of a preliminary peace agreement between the US and Iran. On Tuesday and Wednesday, the decline continued, although at a slower pace.

Details of the agreement are becoming clearer. Iran is being granted the right to immediately resume oil exports. That...

Tuesday: The Day Oil Held Its Breath

You wake up on Tuesday, open your trading terminal, and see WTI crude trading at $80.72 per barrel. Down just 0.04% over the past few hours. Four hundredths of a percent. That's not a move—it's a frozen snapshot. Oil isn't falling, but it isn't rising either. It's simply standing still.

The session low was $79.70, while the recent high stands at $93.64—a peak from which oil has already retreated nearly 14%. Now it is hovering somewhere in the middle, closer to the lower boundary. And no one knows where it goes next.

Brent crude also slipped, falling 0.22% to $82.99 per barrel. The spread between the two benchmarks stands at $2.27, slightly narrower than yesterday but still reflecting the market's concern over Middle Eastern risks. Brent remains more sensitive to geopolitical developments and commands a premium because it reflects global, rather than purely U.S., supply and demand balances.

But the key story is the pause.

Oil has frozen in place. Why?

Because peace in the Middle East is not yet signed, and the Federal Reserve has not yet spoken.

Let's take a closer look at what's behind this calm.

Peace with Iran: The Euphoria Has Faded, Caution Remains

On Monday, oil prices plunged. WTI dropped 4.6%, while Brent fell 4.1%. The catalyst was news of a preliminary peace agreement between the United States and Iran. The prospect of reopening the Strait of Hormuz, bringing Iranian oil back to global markets, and reducing insurance premiums all pushed prices lower.

By Tuesday, however, the initial excitement had faded.

Traders realized that peace is not a signed document yet—it is merely a framework agreement. The official signing ceremony is scheduled for Friday in Switzerland. Until then, anything can...

Monday: The Day Everyone Was Waiting For

When Asian markets opened on Monday morning after the weekend, traders saw something that made them rub their eyes in disbelief. Gold, which had been hovering near 11-week lows around $4,000 just a week ago, suddenly surged higher.

Within a few hours, gold jumped 2.3%. Spot prices climbed to $4,317 per ounce, while futures rose to $4,338.

What happened? Isn't gold supposed to fall on news of peace?

After all, gold is traditionally considered a safe-haven asset. When peace breaks out and risks decline, investors usually sell gold and move into riskier assets. That's how it has worked during wars and crises for the past 50 years.

But this conflict was different.

Throughout months of fighting in the Middle East, gold behaved paradoxically. It didn't rise when missiles were flying—it fell. Markets weren't focused on the war itself, but on its consequences for inflation and interest rates.

Expensive oil = higher inflation = higher Federal Reserve rates = weaker gold.

A simple, albeit twisted, logic.

Now that the United States and Iran have reportedly reached a temporary peace agreement, that logic has reversed:

Peace = cheaper oil = lower inflation = lower interest rates = stronger gold.

Gold is finally pricing in what it failed to reflect during months of conflict.

A Framework Peace Agreement Changes the Narrative

On Sunday, U.S. and Iranian officials reportedly announced that they had reached a framework peace agreement.

Not a complete settlement. Not a permanent solution. Not a comprehensive accord.

But enough to halt military operations.

The agreement reportedly includes:

• A ceasefire

• The lifting of the U.S. blockade on Iran

• Most importantly, the reopening of the Strait of Hormuz to commercial shipping

Pakistani Prime Minister Shehbaz Sharif, apparently involved as a mediator or close observer, stated that...

Friday: A Day of Diplomatic Optimism

Throughout Thursday and Friday, currency markets remained in a state of nervous anticipation. Not the sticky fear that accompanies missile strikes, but rather a cautious hope — what if? What if the seemingly endless Middle Eastern crisis, which has flared up intermittently for months, is finally approaching its conclusion? What if Trump, known for making bold statements, is telling the truth this time? What if a peace agreement with Iran is actually signed this weekend?

Investors decided that the mere possibility was enough to act. The U.S. dollar, which had strengthened in recent weeks amid geopolitical uncertainty and expectations of further Federal Reserve tightening, gave up some of its gains on Friday. The U.S. Dollar Index (DXY) fell 0.1% during London trading, stabilizing after touching its lowest level of the week. For the week as a whole, the index is down 0.3%. Not a dramatic move, but a symbolic one: the trend has shifted.

The euro, by contrast, regained momentum. EUR/USD hovered near its highest levels of the week and appeared set to post its strongest weekly performance in more than a month. The rally was supported not only by easing geopolitical tensions but also by the European Central Bank’s first interest-rate hike in nearly three years. While the Federal Reserve remains on pause, the ECB has finally taken a step it had been discussing for months.

So what happened? Three key factors are driving the story: Donald Trump’s peace overtures toward Iran, the sharp decline in oil prices triggered by those remarks, and U.S. inflation data that turned out to be less alarming than many had feared.

Trump Hints at an Iran Deal — and Markets Believe Him

The primary catalyst came on Thursday, when Donald Trump suggested that a peace agreement between...

Thursday: The Silence That Hurts Your Wallet

You wake up on Thursday, open your trading terminal, and can hardly believe your eyes. WTI crude oil, which was trading near $94 just yesterday, is now changing hands at $91.88. A drop of 2.05% in just a few hours. The $88 support level that held earlier this week failed to provide a floor. Oil broke lower and continues to slide.

What happened? Did the war in the Middle East suddenly end? No. Iran and Israel exchanged strikes. The United States launched new attacks on Iranian targets. Iran threatened to block the Strait of Hormuz. All of this happened within the last 24 hours. Oil should have been rising, yet it is falling.

A paradox? Only at first glance.

The oil market today is not a mirror of geopolitics. It is a mirror of expectations. And expectations change faster than missile trajectories.

Let's take a closer look.

On Thursday morning, WTI found support at $85.95, the low of today's session. Resistance stands at $95.47. That's an unusually wide range of nearly $10, signaling extreme volatility.

Brent crude is also declining, though slightly less sharply—down 1.75% to $94.73 per barrel. The spread between the two benchmarks is $2.85 in favor of Brent. That's a fairly normal level for a market that is not expecting immediate disruptions to Persian Gulf supply.

The U.S. dollar, which typically strengthens during periods of panic, weakened slightly today. The DXY Dollar Index slipped 0.03% to 99.96. A symbolic move, perhaps, but an important one: the dollar is no longer acting as an unquestioned safe haven. Or rather, investors are no longer convinced that the conflict will escalate into a catastrophe.

But let's dig deeper.

Why Is Oil Falling?

There are three main reasons, and all of them point to...

Thursday Morning: Calm Before the Storm or Quiet After the Shock?

When you wake up in Singapore, Tokyo, or Shanghai on Thursday and open the charts, you see something unusual. Asian currencies are neither falling nor rising. They are standing still — like rabbits frozen in the headlights.

The South Korean won gained just 0.2%, a move barely beyond statistical noise. The Indian rupee also rose 0.2%. The Singapore dollar, Australian dollar, and Chinese yuan were virtually unchanged. The Japanese yen remained stuck at 160.52 per U.S. dollar.

The U.S. Dollar Index (DXY) is holding near 100. It is not falling, despite inflation data released yesterday that ING analysts described as “softer than expected.” It is not rising either, even after overnight reports of new U.S. military strikes against Iranian targets. It is simply standing still — as if the entire world is holding its breath.

And that is what makes this calm so unsettling. Beneath the surface are forces capable of tearing markets apart at any moment: new U.S. strikes on Iran, the threat of a blockade of the Strait of Hormuz, oil prices that have surged but have not yet been fully reflected in currency markets, U.S. inflation accelerating to a three-year high, and the possibility of a Bank of Japan rate hike next week while its governor is reportedly hospitalized.

Traders do not know what to do. They are neither buying nor selling. They are waiting for clarity.

And there is none.

Let’s examine what happened over the last 24 hours and where Asian currencies could head next.

New U.S. Strikes on Iran: Is the Strait of Hormuz Closed?

Wednesday night brought fresh concerns. U.S. forces reportedly carried out additional strikes against Iranian targets. The Pentagon described them as a “proportional response” to earlier Iranian actions, including...

The Dream of Devaluation: How Traders Profited from a Weak Dollar

There was a wonderful moment, about a year ago, when it seemed the U.S. dollar was doomed. Not in a catastrophic sense—not like the Zimbabwean dollar or the Argentine peso. Rather, in a calm, predictable, almost comfortable way: the dollar would gradually lose value. Inflation would steadily erode its purchasing power, like a mouse nibbling away at a piece of cheese. The Federal Reserve, which newly elected President Donald Trump appeared determined to pressure, would keep interest rates low to please the White House. And investors, tired of American financial dominance, would shift their billions into euros, yuan, gold—anything but greenbacks.

The strategy had a sophisticated name: the “debasement trade.” It sounded almost scientific. In reality, it was a simple bet: the dollar would weaken because America no longer wanted a strong dollar. A weaker dollar helps exporters. Trump had long complained about the currency’s strength. Surely he would get his way. Surely the Fed would bend.

The traders who made that bet a year ago earned billions. The U.S. Dollar Index (DXY) fell to its lowest level in eight years. The euro surged to 1.20. The pound climbed to 1.35. American travelers were delighted—their dollars bought more abroad than they had in years. U.S. importers were pleased as well. Exporters complained, but few were listening.

Then something went wrong.

Inflation, which many had written off, came roaring back—not as a visitor, but as the owner of the house. Oil prices soared amid conflict in the Middle East. The U.S. economy, instead of slowing, kept growing: 172,000 jobs were added in May, while unemployment stood at 4.3%. And the Federal Reserve, which Trump had hoped to tame, showed its teeth.

Markets now price in more than a 70% probability...

A Wednesday That Brought Nothing Good

When you wake up in Taipei and open your brokerage app, you expect to see green numbers. Or at least yellow ones. But not red. On the morning of June 10, 2026, everything was red. Not just red—blood red. Taiwan’s benchmark stock index, the Taiwan Weighted Index, the island’s main economic barometer, plunged 3.48% in a single day. Without any obvious domestic trigger. Simply because the world around it seemed to be falling apart.

This was not just a decline. It was a stampede for the exits. Investors sold everything they could. Technology stocks—especially semiconductor companies—were hit first. Glass manufacturers were dumped as well. Energy companies were not spared. Three sectors that form the backbone of Taiwan’s economy came under pressure simultaneously.

Who was to blame? External factors, as is often the case. The conflict in the Middle East, driving up oil prices and fueling panic. Expectations of prolonged high interest rates from the Federal Reserve, which continue to suppress demand for risk assets. An overheating artificial intelligence sector that, after months of relentless gains, has finally entered a correction. And, of course, the ever-present geopolitical tensions surrounding Taiwan itself.

But let’s take it step by step.

Technology Sector: The Main Casualty

Taiwan is semiconductors. Semiconductors are Taiwan. The island produces more than 60% of the world’s chips and over 90% of the most advanced ones. TSMC, UMC, MediaTek, ASE Group—names familiar to every investor on the planet. And when those names fall, the entire market follows.

On Wednesday, Taiwan’s technology sector suffered the steepest losses. Shares of WT Microelectronics, one of Asia’s largest distributors of electronic components, plunged 11.03%. A loss of NT$31 per share in a single session is enormous. Investors fled a company widely viewed as a barometer of electronics demand...