The dollar index (DXY00) is up +0.42% on safe-haven demand after Iran said it halted ceasefire talks with the US, which could prompt a new large-scale US military attack on Iran. That report prompted a rally of more than +7% in crude oil prices, which in turn prompted a +7 bp rise in the 10-year T-note yield and supported the dollar’s interest rate differentials.
The dollar is also seeing support after the May US manufacturing PMI rose +1.3 points to 54.0, stronger than expectations for a +0.3 point rise to 53.0. However, S&P’s final-May manufacturing PMI was revised -0.2 points lower to 55.1 from the preliminary report of 55.3, versus expectations for an unrevised report. On a positive inflation note, the May ISM prices-paid index fell by -2.5 points to 82.1 from 84.6, weaker than expectations for a +0.4 point rise to 85.0.
