Dollar, Oil Prices And Bond Yields Rose After US Withdrawal From Nuclear Deal with Iran

Market Reviews

The British pound remains the strongest one ahead of BoE rate decision. Canadian Dollar, despite today’s recovery, is the third weakest, after the Australian dollar and euro. WTI crude oil is back above 70 hand, trading at 70.6. Growth in oil price also lifted 10 year yield which is back at 2.99, comparing to last week’s low at 2.91.

The US dollar rose to a six-day high against the Japanese yen, when crude oil prices rose and US Treasury yields increased after US President Donald Trump withdrew from an international nuclear deal with Iran. The dollar also rose against the euro, as concern over political turmoil in Italy damaged the single currency. The US currency gained support, as the long-term yield of US Treasury bonds rose to two-week highs, while crude oil prices increased by more than 2%, to their highest level since November 2014

Donald Trump on Tuesday withdrew the United States from an international nuclear deal with Iran, increasing the risk of conflict in the Middle East, violating the plans of the European allies and risking global oil supplies.

The euro fell to the lowest level since December 22. The single currency stays under pressure from weak economic indicators and widening interest rate differentials in the euro area, and also suffers from political events in Italy. Italy may hold a repeat election in July after the anti-establishment parties failed to reach an agreement after the inconclusive vote in March.

UK BRC retail sales monitor fell by 4.2% yoy in April. Japan labor cash earnings increased by 2.1% yoy in March. US will publish PPI inflation data today.