Dollar Rebounds, Trump's Threat of Retaliation Against Iran Sparks Risk-Off
The US dollar erased losses on Tuesday (June 9) and briefly touched a session high around midday in New York after President Donald Trump stated that the US "must respond" to Iran's downing of a US military helicopter. The shift in headlines shifted the market mood to a more defensive one, prompting market participants to seek safe-haven assets again, although overall movement remained limited.
The dollar's rise coincided with a reduction in Treasury yields and oil prices. The 10-year US yield fell slightly by around 2 basis points to 4.53%, while WTI and Brent briefly fell below US$90/barrel before paring losses. US stocks were also under pressure, with the S&P 500 dropping more than 2% at its worst point in the session.
In the foreign exchange market, G-10 currencies saw mixed movements. The euro and pound were relatively stronger compared to their peers, while the Norwegian and Swedish kroner weakened the most as oil prices declined. USD/CAD extended its fifth day of gains and touched session highs, while USD/JPY regained ground and remained firmly above 160—keeping the risk of intervention alive.
The next market focus remains on Wednesday's US inflation (CPI) data. However, low overnight volatility suggests the market is reluctant to place large positions for a breakout before the data is released. With liquidity still thinner than average, geopolitical headlines such as Trump's comments tend to have a more immediate impact on the dollar, yields, and risk sentiment. (arl)
Source: Newsmaker.id
