Forex Briefing (WN24 2026): Geopolitical Storms and Central Bank Pivots
It’s the Strait of Hormuz that continues to capture global markets attention. The closure’s dragging on, and military exchanges between the US and Iran are re-escalating. Oil prices jumped near 96 U
WHAT HAS HAPPENED: It’s the Strait of Hormuz that continues to capture global markets attention. The closure’s dragging on, and military exchanges between the US and Iran are re-escalating.
Oil prices jumped near 96 USD per barrel from the disruption while inventories are falling fast, causing energy inflation.
Meanwhile, nonfarm payrolls came in far beyond expectations, and with consumer prices rising the Fed’s hand is increasingly being forced hawkish.
Tech sold off, and with that massive SpaceX IPO coming up, equity rotations have turned volatile.
WHAT COULD HAPPEN NEXT: Currency markets are looking at a busy stretch ahead. The June inflation data and those major rate decisions in the US, Europe, and UK will set the direction.
Kevin Warsh takes over as Fed Chair and any hawkish shift in the projections or direct talk of rate hikes should strengthen the US Dollar and push yield spreads wider against the other G10 currencies.
Geopolitics matter too. Keep tabs on the US-led naval escort in Project Freedom and the Strait of Hormuz blockade. A lasting bottleneck keeps energy inflation risks high, which could force the ECB and BoE to stay restrictive and choke off growth in those regions.
The Canadian Dollar stays sensitive to commodity swings. Weakness in crude would hurt the Loonie’s export revenues, even though domestic retail has shown surprising resilience.
The New Zealand Dollar’s move depends on triggering a short-covering squeeze against that large speculative net-short position. The RBNZ meeting on July 8 could spark it if the bank holds its hawkish stance.
Don’t overlook the Bank of Japan’s June meeting. A surprise rate hike to normalize policy might unwind the crowded Yen carry trade quickly and create volatile capital flows through G10 crosses.
Forex traders need to handle the turbulence with discipline. Stick to strict risk management, align trades with key technical levels, and stay flat around high-impact releases.
Gavin Pearson has been studying the currency markets as a retail trader for twenty years.
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