Gold Price Rises as Investors Weigh U.S.-Iran Talks and Fed Policy Outlook 
Canada Imposes 10% Tariff on Canned Vegetable Imports to Protect Domestic Industry 
Asian Stocks Surge as Oil Prices Fall and Strong US Dollar Weighs on Markets 
Europe EV Demand Surges as Fuel Prices Rise Amid Iran Conflict 
Italy’s Economy Outpaces Eurozone Peers as Investment Spending Fuels Growth 
Japan Signals Readiness to Intervene as USD/JPY Nears 161 Amid Yen Weakness 
Oil Prices Steady as U.S.-Iran Truce Uncertainty and Middle East Tensions Keep Markets on Edge 
US Stock Futures Slip After Wall Street Rally Fueled by US-Iran Deal and Chipmaker Surge 
BOJ Signals More Rate Hikes as Inflation Risks Rise Amid Energy Price Pressures 
Oil Prices Slide as U.S.-Iran Deal and Hormuz Reopening Ease Supply Concerns 
France Faces Long Road to Economic Rebalancing as Weak Demand and High Rates Weigh, Says Citi 
US Stock Futures Recover as Iran Signals Progress in Peace Talks 
Japan Inflation Stays Below BOJ Target Despite Rate Hike and Rising Energy Cost Risks 
China Keeps Loan Prime Rates Unchanged for 13th Straight Month as Policymakers Prioritize Credit Demand Recovery 
Fed Chair Kevin Warsh Signals Policy Overhaul as Hawkish Rate Outlook Rattles Markets 
German Industry Employment Falls to Lowest Level in a Decade 
Russia Stocks End Flat as MOEX Index Hits New 52-Week Low; Gold Falls and Oil Mixed 
The recent weakness in the U.S. dollar is expected to be unwarranted, considering the gap that has opened up with relative interest rates. The U.S. dollar’s long positioning has moderated significantly and now stands at just +1 on our +/- 50 BNP Paribas Positioning scale, the lowest level since the US election, reported BNP Paribas in its research note.
Moreover, upbeat United States economic data and upside inflation expectations hinted that markets are under-pricing the Federal Reserve interest rate hikes for 2017 and 2018.
“We, therefore, think this is an opportune time to reload USD long exposure. We keep USD longs via options, against the JPY, EUR & CAD,” suggested BNP Paribas in its note.
The BNP Paribas Bank in its research note mentioned that the risk to the bullish U.S. dollar view likely surrounds the unpredictability of the new US President. It may take time for Trump and Congressional Republicans to agree on tax plans. Furthermore, consumers and businesses may be more optimistic, but are choosing to wait to see how policy plays out before committing actual money.
Lastly, the BNP Paribas Bank concluded that it believe these risks are balanced by the light USD positioning, strong economic fundamentals and near-term USD undervaluation.
