Oil shock and Fed patience reset the risk tone
Renewed US strikes on Iran pushed crude sharply higher and forced a reassessment of the inflation path just as central banks signal patience.
Crude led the move. WTI rallied 6.13% and Brent 7.09% after US forces began further strikes against Iran, aimed at degrading its capacity to threaten navigation through the Strait of Hormuz. Hours earlier at the NATO summit in Turkey, Trump declared the ceasefire over.
Equities absorbed the geopolitical hit unevenly. The Nasdaq closed 0.27% higher on reports that Alibaba, ByteDance and DeepSeek may be permitted to purchase a limited volume of Nvidia H200 chips. Nvidia gained 3.7%. The S&P 500 slipped 0.28% and the Russell fell 0.88%.
Europe fared worse — Stoxx Europe -1.7%, DAX -2.3%, CAC -2.3%, FTSE 100 -1.6%. UK two-year yields jumped 15bp to 4.33%, the highest since 11 June.
Asia was heavy. The Kospi fell 5.4%, now 23% below its June peak. The Nikkei lost 2.1%. Hong Kong bucked the trend, with the Hang Seng up 3.0%.
AUD/USD was flat and NZD/USD was 0.4% higher.
In Asia, both USD/CNH and USD/SGD were little changed.
Fed minutes reveal inflation concerns linger
The minutes from the Fed’s 16–17 June meeting showed unanimous support for leaving interest rates unchanged, even as policymakers remained concerned about inflation risks. Officials generally viewed risks to price stability as elevated, while concerns about the job market eased somewhat. Although a few policymakers saw a case for a rate increase, they ultimately backed keeping policy unchanged.
The discussion revealed a firmer stance on inflation. Most officials highlighted scenarios that could keep price pressures elevated, including stronger AI-driven demand, ongoing conflict in the Middle East and tariff-related effects. In these situations, almost all of those officials indicated that further policy tightening could become necessary. Fed staff also raised their inflation forecasts for 2026 and 2027 compared with April projections, citing the impact of the Middle East conflict and AI-related investment, while slightly lowering their GDP growth outlook.
In Asia, USD/SGD is trading around 3% above its 28 January low of 1.2586. Support is located near the 21-day EMA at 1.2911, while the 50-day EMA at 1.2863 provides additional support.
RBNZ rate hike gives NZD a lift
The RBNZ raised rates by 25bp, largely in line with market expectations.
While investors had already anticipated the move, guidance pointing to further tightening provided additional support for NZD.
After the initial reaction to the policy decision, NZD/USD is likely to take direction from broader US dollar moves.
The 21-day EMA at 0.5723 remains the first upside hurdle for NZD/USD, with the 50-day EMA at 0.5780 acting as the next ceiling. On the downside, 0.5700 is the next key support level.
Meanwhile, NZD/JPY is at a two-week high.
Dollar index near 101 handle
Table: Currency trends, trading ranges & technical indicators
Key global risk events
Calendar: 6 – 10 July
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
