USD/JPY is rising for a second consecutive session as renewed geopolitical tensions support the US dollar. According to reports from Investing.com India, the dollar is strengthening after President Trump questioned the durability of the US-Iran ceasefire following his rejection of Tehran's latest peace proposal. The developments have triggered renewed safe-haven flows into the dollar, while US equity futures traded modestly lower. Meanwhile, the yen remains under pressure from rising oil prices despite ongoing coordination between Washington and Tokyo on currency policy. Recent reports indicate that Trump has grown impatient with the continued closure of the Strait of Hormuz and is now more seriously considering a resumption of major combat operations, sparking fears of fresh escalation in the conflict.
Oil prices rallied to $105 per barrel as talks appeared to stall on ending the Middle East war and re-opening the Strait of Hormuz to tanker and cargo ship traffic. According to Investing.com India, Iran's chief negotiator said Tuesday that Washington must accept Tehran's latest peace plan or face failure, after US President Donald Trump warned a truce was on the brink of collapse. Rising crude futures were also pushing up government bond rates, including in Britain, where political uncertainty soared as Prime Minister Keir Starmer clings to power. As reported by XTB trading group, oil prices are rising again and global bond markets are pricing in inflation risks, with the UK yields facing a double whammy of an energy price spike and a political crisis.
The latest consumer price index (CPI) data in the United States confirmed that high energy prices are stoking inflation, with the index recording the largest annual gain in nearly three years in April. According to the US Bureau of Labor Statistics, CPI rose 3.8 percent year-on-year, up from March's 3.3 percent figure. Even after stripping out volatile food and energy costs, core CPI still topped expectations at 2.8 percent, reinforcing the idea that inflation remains stubborn beneath the surface, as noted by eToro investment analyst Bret Kenwell. The inflation concerns are helping to keep Crude Oil prices elevated and reinforcing expectations that major central banks – including the Federal Reserve – may need to maintain or adopt a more hawkish stance.
Gold (XAU/USD) is extending its intraday decline from a three-week high reached in Asian trading, slipping back toward the $4,700 level as investors await the latest US Consumer Price Index report. According to Investing.com India, the metal is contending with a stronger US Dollar, supported by renewed geopolitical risk and expectations for tighter monetary policy. Fresh negative developments around the Middle East conflict have reduced hopes for a US-Iran peace agreement and bolstered demand for the US Dollar as a reserve asset. The diplomatic setback is also helping to keep Crude Oil prices elevated, reinforcing concerns about inflation and expectations that major central banks – including the Federal Reserve – may need to maintain or adopt a more hawkish stance.
USD/JPY continues to trade above its longer-term rising trendline after consolidating between 157.90 and 160.50. As reported by Investing.com India, the pair broke lower before finding support at the rising trendline dating back to April last year. The rebound from that support has stalled near 157.90 — a key level buyers need to reclaim to strengthen the near-term outlook and expose the 50-day SMA at 158.75. Above that level, 160 comes back into focus, while initial support is seen at 156 near the rising trendline, followed by 155, the May low. Gold technical analysis shows resilience with the Relative Strength Index near 58 indicating moderate bullish momentum, while the Moving Average Convergence Divergence histogram is hovering just under the zero line.
