The USD has not been moved by new reports from Axios that the Trump administration is discussing plans for a new attack on Iran.
The FX market has a certain degree of scepticism that this is just an attempt to act tough with Iran without launching a new phase of the Iran war. Indeed, we still feel that Trump could claim a breakthrough in peace talks just before the November mid term elections. This is all an attempt to deflect blame and get a temporary dip in oil prices. On oil prices, the new Houthi attacks this week have kept oil prices high, but the increased flows through the Straits of Hormuz have helped cap oil prices and could be more important multi week.