Forex market Update - US Dollar

The US dollar was generally stronger across the board but particularly against AUD and NZD. The UN-brokered ceasefire between Israel and Hizbollah looks to have held so far and contributed to lower oil prices, with benchmark Nymex crude futures down by around $1 to US$73.33/bbl.

However, geopolitical tensions will likely persist until after Aug. 22, which is when Iran has agreed to respond to international pressure regarding its uranium enrichment program.

US 2 and 10-year yields are higher by 3-4 bp while equity market are slightly firmer, with the S&P500 up by 0.1%.

There was little in the way of economic data overnight and instead the market will look ahead to PPI released today and CPI released tomorrow. In light of the strong retail sales last week, any upside surprises on inflation or activity data this week could put further pressure on USD shorts.

IMM positioning data released on Friday showed a rise in speculative short-USD positions in the week to last Tuesday, with long EUR positions rising to a record 121.8k, up from 97.9k in the previous week.

Looking ahead for today we have PPI at 1230 GMT, the TIC report for June is due at 1300 GMT.