Return to Iran and currency rates. "Positive inflation surprises needed"
Donald Trump once again withdrew from announcing new attacks on Iran.
According to Bloomberg, the U.S. president’s change of stance came shortly after threats addressed to Tehran, including the possibility of taking over Iranian energy infrastructure.
After a series of strikes, Trump announced the revival of the negotiation process, which, as he stated in a press conference in the Oval Office, could end with the signing of a peace agreement this weekend.
Despite assurances of Iran’s readiness to make peace, these details have not yet been officially confirmed.
The semi-official Iranian news agency Fars, citing an anonymous source, said that Iranian authorities have not yet approved the content of any agreement with the United States.
Analysts from Crédit Agricole, like many market participants, point out that events in the Middle East remain a key factor shaping currency quotes.
The shift in political narrative, including conflicting signals from the White House, involving announcements of actions and then their modification or withdrawal, increasingly recedes to macroeconomic factors that provide more reliable information about the direction of the U.S. economy.
"In this situation, currency investors wonder whether inflation data can again make the relative prospects of central bank policy a market-driving factor. We believe that is the case, given that geopolitical risk, through its impact on investor sentiment, and U.S. inflation data, through its effect on U.S. interest rates, are integral elements of the dollar’s smile, which remains a key pattern for G10 currency markets," we read in the statement.
The latest data show the consumer inflation index CPI at 4,2% year‑on‑year in May.
Trump, reacting to the new data, dismissed Americans’ financial struggles, claiming he “loves” inflation.
The Federal Reserve will announce the decision on interest rates in June next Wednesday, June 17.
Source: Trading Economics.
"U.S. interest rate markets almost fully price in a Fed rate hike of 25 basis points by year‑end. This is a slightly hawkish stance compared to ours, which assumes unchanged FOMC rates in 2026," they said.
Experts emphasized that many "positive" Fed monetary policy factors are already reflected in the U.S. dollar’s exchange rate.
"We therefore believe that for this currency to regain further value due to increasing attractiveness of rates across all sectors, today’s positive inflation surprises would be needed," they said.
"Regarding the geopolitical situation, we believe that a comprehensive U.S.–Iran agreement remains a distant prospect for now. Consequently, we must still exercise caution regarding the prospects of sustained investor sentiment revival. This, in turn, could limit potential losses for the U.S. dollar as a safe‑haven currency," they added.
Source: Trading Economics.
Read also: The dollar’s path to 4 PLN? Expert issues forecasts for USD/PLN and EUR/USD. "The dollar could gain"
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Dollar and euro rates on Friday, June 12
The dollar to zloty rate on Friday, June 12 is at 3,67 PLN.
Chart. Dollar to zloty rate (USD/PLN)
Source: Trading Economics.
The euro to dollar rate reaches 1,15 USD.
Chart. Euro to dollar rate (EUR/USD)
Source: Trading Economics.
Read also: Dollar before the chance to break out? Expert: "Capital will flow back to USD"
See also: Dollar before a "nervous and dynamic" move, euro waiting for a drop? Expert issues forecast for USD/PLN and EUR/USD
Source: Bloomberg.
