Dollar gains as US-Iran war gauged; sterling eases as Burnham steps in
The dollar rose on Monday as investors weighed conflicting signals in the US-Iran conflict, including Houthi threats of a naval blockade on Saudi Arabia and renewed diplomatic overtures. Crude oil prices initially spiked but eased as both sides signaled willingness to resume talks. The pound fell from earlier highs after Andy Burnham became Britain's seventh Prime Minister in a decade, replacing Keir Starmer. Sterling pared losses after Burnham appointed John Healey as finance minister, a move seen as cautious optimism by markets. The dollar index climbed 0.18% to 100.92, while the euro fell 0.19%. The economic calendar was light, with Fed officials in a blackout period ahead of next week's meeting. Markets priced in a 16.6% chance of a Fed rate hike next week, down from over 40% a week ago, while ECB rate hike expectations remained low at 13.1% for this week's meeting.
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