Forex Today: German flash CPI and… the end of the US-Iran war?

The Greenback resumed its decline on Thursday, coming under sudden selling pressure in the wake of news citing the US and Iran have clinched a deal that could eventually end the conflict in the Middle East.

Here is what you need to know on Friday, May 29:

The USD Index (DXY) came under renewed downside pressure on Thursday, putting the 99.00 contention zone to the test in the wake of news regarding a US-Iran deal. The preliminary Trade Balance results are due seconded by the Chicago PMI and Wholesale Inventories data. Around the Fed, members Bowman and Paulson are also due to speak.

EUR/USD regained composure on Thursday, retesting the 1.1660 zone on the back of the strong retracement in the Greenback post-US-Iran news. All the attention will be on Germany’s flash Inflation Rate and the labour market report.

The better tone in the risk complex lent legs to GBP/USD, sending it back to the 1.3450 region after two daily drops in a row. The Nationwide Housing Prices are expected ahead of the speech by the BoE’s Bailey.

After reaching four-week tops near 159.70, USD/JPY sparked a correction to the vicinity of 159.00 on the back of heavy pressure hurting the US Dollar. A busy calendar in Japan will see the Unemployment Rate, Retail Sales, Industrial Production and the Tokyo CPI.

AUD/USD bounced off the 0.7100 region and ended the day with modest gains, reversing two consecutive daily declines. Housing Credit figures and Private Sector Credit data will wrap up the weekly docket in Oz.

WTI remained on the back foot, approaching the $87.00 region per barrel as traders kept parsing a potential end to the Middle East conflict and the reopening of the Strait of Hormuz in the relatively near term.

Gold regained some poise and bounced off multi-week troughs near $4,360 per troy ounce. The marked downside in the US Dollar following the US-Iran deal news underpinned the precious metal’s recovery. However, the idea of a tighter-for-longer Fed is expected to keep bullion well under scrutiny.