Safe Haven Currencies Broadly Higher Awaiting Trump's Decision on Iran Deal

Market Reviews

The Japanese yen and Swiss franc strengthen broadly, while commodity currencies are trading lower. That argues that forex traders are preparing for some risk aversion ahead of US President Donald Trump’s decision on Iran deal. European indices are trading slightly lower, with DAX down 0.6% and CAC down 0.4% US futures also point to slightly lower open today. It is expected, that Donald Trump will announce US exit from the agreement on the Iranian nuclear program, signed in 2015 by the United States, Russia, China, Britain, France and Iran.

The US dollar strengthens against the euro and the pound, while it is stable against the yen and franc safe haven currencies. The American currency received support thanks to the hawkish comments of Fed Chairman Powell on the issue of the regulator's determination to effect a smooth rate hike.

During his speech in Zurich, the chairman of the Fed said that the central bank will speak about the prospects of monetary policy as clearly and clearly as possible in order to avoid unrest in the markets that could affect the economies of other countries. Powell also added that the normalization of the Fed's policy should be implemented in such a way that emerging markets are able to cope with it.

The euro fell to new lows in 2018 despite positive data from the largest economy of the Eurozone. Today's data showed that industrial production in Germany increased by 1.0% in March, while economists forecast an increase of 0.8%. On an annual basis, Germany's industrial output increased by 3.2%.

China recorded a trade surplus of $28.8B in April, beating consensus of $27.5B. China reported a deficit of $5B in March due to seasonal factor. Compared with the same period last year, trade surplus narrowed by -23.1%. Exports grew by 12.9% yoy in March, while imports jumped by a 21.5%.