Market Volatility Spikes Amid Middle East Tensions
The global financial markets are experiencing jitters due to escalating tensions in the Middle East. The US dollar is hovering near multi-month lows against major currencies, including the euro and sterling.
The euro has traded at $1.1581 during early Asian trading, close to Monday's two-month high of $1.1614. Sterling maintained its previous session's three-month peak at $1.3548.
Last week's US retail sales data fell for the first time in nine months, following unexpected job losses and mild inflation. This prompted investors to reduce expectations of a rate hike by the Federal Reserve.
Traders predicted a 35% chance of a Fed rate increase in September, down from 52.2% last week, using the CME FedWatch tool. However, analysts remain cautious about inflation trends, especially with the Strait of Hormuz effectively shut and US-Iran negotiations stalled.