Asia Summary and Highlights 28 May
The US has sanctioned Iran's Persian Gulf Strait Authority
Iran launched missiles and drones against Kuwait and claimed responsibility for striking a US air base
Asia Session
The risk sentiment turned sour on Thursday as more explosions are heard near Bandar Abbas, Strait of Hormuz. U.S. said such action is defensive while Iran accused an American tanker tried to pass. Such incident is giving market participants second thoughts on whether a deal is near. U.S. major equity indexes and most regional equities are lower. AUD/USD is trading 0.5% lower at 0.7106 as precious metal also treads lower. NZD/USD is also 0.54% lower while USD/CAD rises 0.16% with both Brent and WTI higher.
The haven bids for USD are revived on more bombings in the Middle East. The ceasefire is officially done with both sides exchanging fire. It is hard to tell whether background negotiations are still going and both sides are just showing their leverage. USD/JPY is trading 0.05% higher at 159.58. Else, EUR/USD is down 0.3% and GBP/USD is down 0.36%.
North American session
The USD saw an early dip after Iran claimed a memorandum of understanding had been reached with the US over opening the Start of Hormuz, though this was later reversed and more as the White Hose described the report as a complete fabrication, leaving the USD slightly higher. After dipping to near 159.30 USD/JPY advanced above 159.50. EUR/USD fell to 1.1630 after bouncing above 1.1650. EUR/JPY and EUR/GBP were little changed but EUR/CHF was firm at .9150. USD/CAD and AUD/USD saw little movement.