Dollar Gains Slightly as U.S.-Iran Tensions Keep Forex Markets on Edge 
U.S. Launches New Strikes on Iran as Trump Signals Peace Deal Uncertainty 
Asian Markets Slide as New U.S. Strikes on Iran Spark Investor Caution 
U.S. Sanctions Iran’s Strait of Hormuz Authority as Global Oil Markets Face Turmoil 
Oil Prices Set for Sharp Weekly Losses as U.S.-Iran Ceasefire Hopes Ease Supply Concerns 
Oil Prices Fall as Markets Await U.S.-Iran Peace Deal Decision 
Iran-U.S. Nuclear Talks Remain Unresolved as Strait of Hormuz Risks Keep Markets on Edge 
European Stocks Rise as AI Optimism Offsets U.S.-Iran Tensions 
European EV Sales Surge in April 2026 as Tesla and Chinese Automakers Gain Ground 
US Dollar Slips as Markets Weigh Potential US-Iran Peace Deal and Oil Price Outlook 
Tokyo Inflation Cools in May, Supporting BOJ’s Cautious Rate Hike Path 
Dow Hits Record High as Healthcare and Consumer Stocks Lead Wall Street Rally 
South Korea Central Bank Holds Interest Rates Steady Amid Inflation Concerns 
US Imposes Fresh Iran Oil Sanctions Despite Progress on Ceasefire Talks 
New World Screwworm Found Near U.S. Border Raises Threat to Cattle Industry and Beef Prices 
UK Grocery Inflation Slows to 3.1% as Supermarket Price Pressures Ease in May 2026 
Canada and Germany Advance Major LNG Supply Partnership 
The U.S. dollar held onto its recent gains on Monday as global investors assessed what monetary policy could look like under a Federal Reserve chaired by Kevin Warsh, a figure widely seen as favoring a smaller Fed balance sheet. Expectations around tighter balance sheet management have supported the dollar, even as markets anticipate potential interest rate cuts later this year.
The greenback remained strong in early Asian trading, with the euro trading at $1.1848, well below the $1.20 level. Sterling slipped 0.05% to $1.3680, while the dollar index stabilized at 97.22 after a sharp 1% rally at the end of last week. Commodity-linked currencies also weakened, with the Australian dollar falling 0.54% to $0.69255 and the New Zealand dollar down 0.3% at $0.6001.
Market volatility increased on Friday following U.S. President Donald Trump’s announcement naming Warsh as his pick for the next Fed Chair. The news triggered a sell-off in risk assets and sent precious metals lower, while the dollar rebounded from earlier losses. Investors generally expect Warsh to support rate cuts but believe he will simultaneously rein in the Fed’s balance sheet, a move that typically strengthens the U.S. dollar by reducing excess liquidity.
Richard Clarida, global economic advisor at PIMCO and former Fed Vice Chair, said Warsh is likely to navigate a divided Federal Open Market Committee but could still deliver two rate cuts this year, with the possibility of a third. However, Clarida noted that future easing would depend heavily on inflation trends and that Warsh may rely less on forward guidance compared to previous Fed leadership.
Meanwhile, the Japanese yen weakened to 155.39 per dollar, pressured by dollar strength and comments from Japanese Prime Minister Sanae Takaichi, who spoke positively about a weaker yen during a campaign speech. Her stance contrasts with Japan’s finance ministry, which has sought to slow the currency’s decline. With a February 8 snap election approaching and polls pointing to a potential landslide victory for her party, investors are selling the yen and Japanese government bonds amid expectations of expansionary fiscal policy.
Despite the yen’s struggles, traders remain alert to the possibility of coordinated U.S.-Japan currency intervention, which has helped prevent further sharp declines in recent weeks.
