The US-Iran peace talks have achieved a significant breakthrough as the conflict nears its fourth month. The United States, Iran, and key mediator Pakistan have all announced that an agreement has been reached and will be formally signed in Switzerland this Friday. Both US President Donald Trump and Pakistani Prime Minister Nawaz Sharif declared that the US and Iran have reached a deal. Iran has officially confirmed the signing of a US-Iran ceasefire memorandum of understanding.
According to comprehensive media reports, on the 14th local time, US President Trump stated that the agreement with Iran is now complete, fully opening the Strait of Hormuz and authorizing the immediate lifting of the US naval blockade. Shortly after, Trump posted again, saying this great agreement will bring peace and security to the entire region. With the signing of the US-Iran agreement on the 19th, the Strait of Hormuz will be reopened to facilitate mine-clearing operations.
Additionally, Australia is expected to keep its key interest rate unchanged for the first time this year. As the economy shows signs of weakness, market bets on further rate hikes are receding. Economists anticipate the Reserve Bank of Australia (RBA) will maintain the cash rate at 4.35%, ending a streak of three consecutive hikes in meetings before 2026. Market focus is on whether Governor Michele Bullock will express comfort with the current rate level or leave room for potential future hikes to address persistent price pressures. Josh Williamson of Citigroup expects the RBA to pause this month but believes the decision may carry a "hawkish bias" due to inflation uncertainty, maintaining a forecast for a 25-basis-point hike in August. He stated: "While recent data provides scope for a temporary pause, risks from the domestic wage-price spiral and second-round inflation effects from the Middle East conflict suggest current policy is not sufficiently tight."
Key data to watch today includes the US June New York Fed Manufacturing Index, Canada's April Manufacturing Sales month-on-month, and the US May Industrial Production month-on-month.
Gold/US Dollar
Gold consolidated with slight gains on Friday. Signs of easing Middle East tensions, which dampened safe-haven demand for the US dollar, were the main factor supporting gold's rebound. However, rising expectations for Federal Reserve rate hikes and positive US economic data released during the session limited gold's upside. In early Asian trading, gold surged significantly influenced by the US-Iran agreement, with the current spot price trading around 4320. Today, watch for resistance near 4400 and support near 4250.
Australian Dollar/US Dollar
The Australian dollar consolidated with minor losses on Friday. Profit-taking exerted some downward pressure, and the US dollar index's rise, supported by strong economic data and heightened Fed rate hike expectations, was also a key factor weighing on the Aussie. In early Asian trading, the Australian dollar edged higher, supported by improved market risk sentiment following the US-Iran peace deal, with the current spot price trading around 0.7080. Today, watch for resistance near 0.7150 and support near 0.7000.
US Dollar/Japanese Yen
The US dollar/Japanese yen moved higher on Friday, closing with modest gains, with the current spot price trading around 160.00. Short covering provided some support, and the rise in the US dollar index backed by solid economic data and stronger Fed rate hike expectations also contributed to the pair's gain. However, signs of easing Middle East tensions and expectations for Bank of Japan rate hikes limited the pair's advance. Today, watch for resistance near 161.00 and support near 159.00.
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