Global Markets Breathe Sigh of Relief Amid US-Iran Conflict Pause
Over the weekend, a brief pause in US-Iran military action allowed for some relief to global markets. The escalation of tensions had driven up oil prices, but the lull led to a decline in Brent crude from $100 back down to around $97 per barrel.
The news also sparked a recovery in the New Zealand dollar (NZD), which rose modestly against key crosses including the AUD and USD. The NZD/AUD exchange rate recovered to 0.8290, while the NZD/USD traded near 0.5790.
Despite this brief respite, markets remain on high alert due to ongoing tensions in the Middle East. President Trump's threats to impose more tariffs on the EU and his 'locked and loaded' stance towards Iran have kept investors cautious.
The dollar's strength continued, driven by its safe-haven appeal as a result of global uncertainty. The CFTC data revealed an aggregate dollar long position of $43 billion, the largest in nearly 11 years.