Forex Today: Markets await FOMC Minutes while tensions in Middle East escalate

Here is what you need to know on Wednesday, July 8:

The market sentiment sours on Wednesday as investors assess the latest headlines surrounding the Middle East conflict. Later in the American session, the Federal Reserve (Fed) will publish the minutes of the June Federal Open Market Committee (FOMC) meeting. In the meantime, investors will keep a close eye on geopolitics.

US Dollar Price This week The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Japanese Yen. USD EUR GBP JPY CAD AUD NZD CHF USD 0.10% -0.12% 0.55% -0.23% -0.07% -0.15% 0.42% EUR -0.10% -0.24% 0.46% -0.35% -0.13% -0.28% 0.27% GBP 0.12% 0.24% 0.59% -0.09% 0.11% -0.04% 0.51% JPY -0.55% -0.46% -0.59% -0.80% -0.50% -0.66% -0.16% CAD 0.23% 0.35% 0.09% 0.80% 0.28% 0.13% 0.62% AUD 0.07% 0.13% -0.11% 0.50% -0.28% -0.16% 0.39% NZD 0.15% 0.28% 0.04% 0.66% -0.13% 0.16% 0.55% CHF -0.42% -0.27% -0.51% 0.16% -0.62% -0.39% -0.55% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Crude Oil prices rose sharply on Tuesday as Iran reportedly fired at three commercial vessels attempting to cross the Strait of Hormuz. In response, the US military launched retaliatory strikes against Iranian air defences and drone launch sites. Furthermore, the United States revoked the license that permitted Iran to sell crude Oil until August 21 and reimposed sanctions. After rising nearly 5% on Tuesday, the barrel of West Texas Intermediate (WTI) continues to push higher and was last seen trading at around $72.60, rising about 0.8% on a daily basis.

The US Dollar (USD) Index stays in a consolidation phase near 101.00 after rising about 0.3% on Tuesday, and US stock index futures lose about 0.2% in the European morning on Wednesday.

During the Asian trading hours, the Reserve Bank of New Zealand (RBNZ) announced that it raised the Official Cash Rate (OCR) by 25 basis points to 2.50% in a unanimous decision. This marked its first rate hike in over three years, since April 2023. "With inflation still above target and economic activity expected to strengthen, some further reduction in monetary stimulus is likely to be required to return inflation to the 2 percent target mid-point," the RBNZ noted in its press release. In the post-meeting press conference, RBNZ Governor Anna Breman noted that they are gradually shifting toward the neutral rate, which seen in the range of 2.5%-3.5%. NZD/USD gathers bullish momentum midweek and trades above 0.5700, rising more than 0.5% on the day.

EUR/USD holds steady above 1.1400 in the European morning on Wednesday after losing about 0.3% on Tuesday.

GBP/USD lost more than 0.2% on Tuesday and snapped a nine-day winning streak. The pair struggles to gather recovery momentum but manages to hold above 1.3350 early Wednesday.

USD/JPY failed to make a decisive move in either direction on Tuesday and closed the day flat. The pair extends its sideways grind above 162.00 to start the European session on Wednesday.

Gold stabilizes above $4,100 on Wednesday after closing in negative territory for two straight days.