US Stock Futures Steady as US-Iran Tensions and Fed Inflation Concerns Weigh on Markets 
Gold Prices Slip as Stronger Dollar, Fed Rate Outlook Weigh on Bullion 
Oil Prices Slip but Stay on Track for Weekly Gains as U.S.-Iran Conflict Persists 
Asian Stocks Rise as AI Chip Rally Offsets Middle East Tensions 
Asian Currencies Slip as Stronger US Dollar, Iran Tensions Pressure Regional FX 
Oil Prices Rise as U.S.-Iran Conflict Fuels Strait of Hormuz Supply Fears 
Japan Regional Bank Stocks Drop After Zentoshin Bankruptcy Sparks Credit Risk Concerns 
Asian Stocks Slip as Iran Tensions, Samsung Weakness and Fed Caution Weigh on Markets 
Japan Producer Inflation Hits 7.1% in June, Fueling BOJ Rate Hike Expectations 
Cuba Power Outage Sparks Havana Protests as Fuel Crisis Deepens 
Germany Seen Gaining as U.S. China-Built Ship Fees Reshape Trade 
Iran Targets U.S. Bases in Bahrain, Kuwait as Hormuz Conflict Escalates and Oil Prices Jump 
US Launches New Iran Strikes as Strait of Hormuz Conflict Escalates, Oil Prices Rise 
Dollar Slips as Oil Prices Ease, Fed Rate Outlook Remains Uncertain 
Gold Price Climbs Over 1% as Dollar Weakens, Fed Rate Debate and Iran Tensions Remain in Focus 
Japanese Yen Rises as Pension Fund Plan and BOJ Rate Hike Bets Weigh on Dollar 
Japan Wholesale Inflation Jumps as Energy Shock Drives Import Costs Higher 
The recent weakness in the U.S. dollar is expected to be unwarranted, considering the gap that has opened up with relative interest rates. The U.S. dollar’s long positioning has moderated significantly and now stands at just +1 on our +/- 50 BNP Paribas Positioning scale, the lowest level since the US election, reported BNP Paribas in its research note.
Moreover, upbeat United States economic data and upside inflation expectations hinted that markets are under-pricing the Federal Reserve interest rate hikes for 2017 and 2018.
“We, therefore, think this is an opportune time to reload USD long exposure. We keep USD longs via options, against the JPY, EUR & CAD,” suggested BNP Paribas in its note.
The BNP Paribas Bank in its research note mentioned that the risk to the bullish U.S. dollar view likely surrounds the unpredictability of the new US President. It may take time for Trump and Congressional Republicans to agree on tax plans. Furthermore, consumers and businesses may be more optimistic, but are choosing to wait to see how policy plays out before committing actual money.
Lastly, the BNP Paribas Bank concluded that it believe these risks are balanced by the light USD positioning, strong economic fundamentals and near-term USD undervaluation.
