ECB's Kocher Says No Inflation Spillover Yet From Iran Conflict, Warns Risks Remain 
Oil Prices Surge as U.S.-Iran Conflict Escalates and Strait of Hormuz Risks Grow 
South Korea Central Bank Set to Raise Interest Rates as Inflation Stays Elevated 
Japanese Yen Holds Steady as Intervention Hopes Grow Ahead of U.S. CPI Data 
European Stocks Slip as Middle East Tensions and Hormuz Threat Rattle Markets 
US Stock Futures Hold Steady as Soft Inflation Data Eases Fed Rate Hike Fears 
Dollar Holds Steady Ahead of U.S. CPI as Oil Surge, Middle East Tensions Keep Markets on Edge 
Australia Consumer Sentiment Rises in July as Fuel Price Relief Lifts Confidence 
Asian Currencies Hold Steady as Middle East Tensions Offset Weaker US Dollar 
South Korea’s KOSPI Enters Bear Market Despite Remaining 2026’s Best-Performing Major Stock Index 
Asian Currencies Stay Rangebound as Middle East Tensions, Weak China GDP Weigh on Sentiment 
Goldman Sees Foreign Investors Driving India Stock Market Recovery 
China Home Prices Fall Again in June Despite Slower Pace of Decline 
Singapore GDP Grows 5.7% in Q2 2026 as AI-Driven Manufacturing Boosts Economy 
Asian Stocks Rise as Softer U.S. Inflation Boosts Sentiment Despite Middle East Tensions 
Oil Prices Climb as Trump Escalates Iran Pressure, Strait of Hormuz Risks Grow 
Oil Prices Rise as U.S. Strikes on Iran Raise Strait of Hormuz Supply Fears 
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.
