FX Daily: Fading geopolitical risk, focus on rate differentials

AI Summary

Markets have taken an optimistic view as US-Iran tensions fade, despite recent US strikes on Iranian bridges and near-zero traffic in the Strait of Hormuz. Investors focus on interest rate differentials while geopolitical risk appears subdued in the short term.

USD: Stuck as markets fade geopolitical risk Markets are taking a decisively optimistic stance on fresh US-Iran tensions. Multiple reports indicate traffic in Hormuz has dropped to almost zero in the past couple of days, and we have seen effectively no intent of de-escalation from either party. The US is reportedly striking Iranian bridges for ...