A decidedly dull session on the FOREX market, where moves rarely exceed 0.1% per currency pair. In a highly emblematic sign, the ‘$-Index’ ends the week flat at 100.77, perfectly unchanged from the prior day, and down 0.2% over the past week. The standout currency this Friday is the Swiss franc, up 0.2% against the euro and 0.15% against the greenback. Sterling is, symmetrically, the most shunned currency as Andy Burnham, the new UK Labour prime minister, promises to usher in a new ‘era of hope’.
Sterling gives up -0.2% against the dollar and 0.12% versus the euro, and -0.3% against the Swiss franc.
Also notable is the unusual weakness of the Chinese yuan, down 0.08% against the $ and -0.2% versus the euro.
Precious metals continue to slide (a very negative week), but after a difficult morning (and a new annual low at $55), silver rebounds a bit this evening, toward $56, while gold moves back above $4,000/Oz.
Metals and the dollar, 2 safe-haven assets, appear completely disconnected from the geopolitical newsflow: the military escalation continues in the Persian Gulf, with strikes expanding to non-military targets: Iran has seen bridges and road or power infrastructure destroyed, and Tehran has just retaliated by targeting a power plant in Kuwait.
Without electricity, there is no seawater desalination, or only at a reduced pace, forcing trade-offs relative to other industries.
Tehran also targeted the Syrian military base at Al-Tanf, as the new authorities in Damascus have begun a fight against Hezbollah (weapons seized at the border this Friday).
Tehran is also threatening to call on its Houthi allies to block the Bab El Mandeb strait, which conditions access to the Suez Canal or the Indian Ocean: if it is closed, container ships coming from Asia will have to sail around Africa.
Finally, there is the threat of cutting the 17 high-speed undersea cables (fiber optic) linking the Gulf monarchies to the rest of the world and to the planet’s main financial centers.
FX traders breezily ignored the day’s ‘macro’ data: US import prices rose 0.3% in June 2026 from the prior month, according to the Labor Department, wrong-footing economists, who had been looking for a 0.7% decline.
Meanwhile, US consumer sentiment improved sharply this month, according to the confidence index calculated by the University of Michigan (UMich), which came in at 54.4 in a preliminary estimate for July, versus 49.5 the prior month.
Finally, after a 0.1% increase in May versus the prior month (a figure confirmed versus the initial estimate), US industrial production again rose by just 0.1% in June, compared with a 0.2% gain expected by the consensus.
