Dollar/Yen Rangebound as Iran Tensions Counter Weakened Rate Hike Bets
The dollar/yen pair is trading in a lower 159 range on Monday, August 17th, as expectations for a Federal Reserve rate hike this year have gradually receded. Despite a month-over-month decline in July retail sales, which triggered some dollar selling, the currency was bought back amid heightened geopolitical risks surrounding Iran.
Tsutomu Nakamura, a currency analyst at Gaitame.com Research Institute, forecasts the dollar/yen to trade between 158.600 and 160.000. He notes that the pair closed last week down approximately 0.1% on a closing basis.
The Iran situation continues to underpin safe-haven demand for the dollar, with the country's Foreign Ministry stating that 'the Strait of Hormuz will remain closed until the United States admits defeat.' A prolonged blockade of the Strait could have broad implications for the global economy through surging energy prices.