Forex Today: Fading hopes of a US-Iran deal weighs on market mood
Here is what you need to know on Tuesday, August 11:
On Tuesday, August 11, the forex market faced uncertainty as the possibility of a US-Iran deal waned, impacting the overall market mood. Oil prices experienced a surge on Monday, reigniting inflation concerns due to ongoing tensions in the Middle East. The US economic calendar for the day included data releases such as the NFIB Business Optimism Index and Existing Home Sales for July.
The US Dollar (USD) proved to be the strongest currency against a list of major currencies. The USD Index, which had suffered significant losses in the previous week, showed a slight recovery on Monday and remained below the 100.00 mark at the start of Tuesday.
Iran announced on Monday that even if they reached an agreement with Oman to manage the Strait of Hormuz, the waterway would not fully reopen without additional conditions from the US. In response to Iran's demand for Washington to compensate for damages, US President Donald Trump indicated that the US would also seek retribution from Iran for any casualties.
Crude Oil prices, including West Texas Intermediate (WTI), saw a substantial increase of nearly 7%, reaching near $82.50 and gaining around 1.3% during the day. Analysts at Commerzbank attributed the recent rise in crude prices to persistent tensions surrounding the Strait of Hormuz, with satellite imagery revealing that Iran's main oil export terminal at Kharg Island remained largely inactive throughout the month.
The Reserve Bank of Australia (RBA) maintained its Official Cash Rate (OCR) at 4.35% following the August policy meeting, stating that inflation was still too high and they would remain vigilant in ensuring it did not become entrenched in the economy. The RBA Governor, Michele Bullock, mentioned in the post-meeting press conference that they would raise rates if necessary.
The Australian Dollar (AUD) remained largely unaffected by the RBA announcement and traded virtually unchanged against the US Dollar, holding steady near 0.7050. Commerzbank analysts noted that the RBA's communication did not display particularly hawkish signals, with revised forecasts showing a higher expected unemployment rate and lower short-term inflation forecasts.
In their medium-term outlook, Commerzbank reiterated their expectation of a future interest rate cut by the RBA, suggesting that the AUD would likely remain under pressure in the upcoming months.
Other currency pairs also experienced mixed results. EUR/USD traded marginally lower and fell below 1.1550, while GBP/USD retreated from its near two-month high of 1.3530, trading around 1.3500 in the European morning. Gold (XAU/USD) continued its upward trend, reaching its strongest level since early June above $4,400 before reversing its course and trading below $4,370, losing about 0.5% during the day.
The USD/JPY pair held steady above 159.00 early Tuesday, following a 1% rise on Monday. OCBC analysts maintained their end-2026 USDJPY forecast of 163, but indicated that their stance on the Japanese Yen might shift if domestic policy dynamics improved. They noted that a September rate hike by the Bank of Japan, coupled with domestic investors reallocating capital back into Japanese assets, could lead to a more sustained Yen recovery and provide longer-lasting relief for long-term Japanese government bonds (JGB) yields.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
