The dollar traded mixed against its major peers on Tuesday as a slide in U.S. tech stocks ahead of Wednesday’s CPI report and SpaceX’s market debut on Friday pressured both commodity prices and risk-sensitive currencies.
Annualized CPI is forecast to have accelerated to 4.2% in May, posing a potential challenge for a new Fed chair viewed as dovish. The risk-off bias also preceded an expected rate hike by the European Central Bank on Thursday. Oil also declined after U.S. Energy Secretary Chris Wright said Gulf shipping and Strait of Hormuz exports are rising despite stalled U.S.-Iran talks. This comes even as stockpiles in major economies near their lowest levels since at least 2003, with Middle East tensions simmering. President Donald Trump said Iran had shot down a U.S. Apache helicopter patrolling the Strait of Hormuz overnight and vowed a response. U.N. Secretary-General Antonio Guterres said he was “deeply alarmed” by the renewed escalation in the Middle East. Britain, Canada, France and Norway imposed coordinated sanctions on Israeli West Bank violence networks. China-related pressures include potential tighter Taiwan curbs on AI chip exports, new outbound investment rules hitting foreign banks, and U.S. claims that Chinese tech firms are aiding the military.
The dollar index remains under pressure after a failed break above 100 last week, though risk reversals suggest upside potential if volatility rises. USD/JPY is holding firm above 160 with a mild upside bias toward the 160.72 peak, though overbought signals and intervention risks suggest gains may be limited and choppy. AUD/USD slipped amid sliding metal prices and risk-off flows, keeping a bearish bias as technicals point to downside momentum. EUR/USD rebounded from its lower Bollinger near 1.1530 as U.S. shares trimmed losses, but a bearish longer-term head-and-shoulders pattern keep downside risks in focus despite near-term RSI support. GBP/USD held a modest upside bias near 1.3390, supported by cross flows and softer oil, but gains remain capped by Middle East tensions and a firmer U.S. policy outlook ahead of CPI.
Treasury yields were down 1 to 3 basis points as the curve steepened. The 2s-10s curve was marginally higher at +40.1bp.
The S&P 500 slid 0.59% as sinking tech shares weighed.
WTI oil fell 3.3%.
Gold dropped 1.5% and silver tumbled 4.0% though copper was little changed.
Heading toward the close: EUR/USD +0.13%, USD/JPY +0.11%, GBP/USD +0.39%, AUD/USD -0.21%, DXY -0.13%, EUR/JPY +0.23%, GBP/JPY +0.47%, AUD/JPY -0.12%.(Editing by Burton Frierson Reporting by Robert Fullem)
