Iran Strikes, Fed Holds Steady: Americas FX Wrap July 15

The session was anything but quiet. The US military launched fresh strikes against Iran, and Trump went on Fox Business to say Tehran wants to talk — but warned more military operations are on the table anyway. That kind of mixed signal is a trader's nightmare, and oil felt it immediately, settling at $79.60, up a modest $0.26 or 0.33%. The White House is also reportedly weighing extensions on Jones Act waivers, a direct acknowledgment that renewed conflict could spike domestic energy prices fast.

On the data front, you got some genuine surprises. US June PPI came in at 5.5% versus a 6.2% estimate — that's a meaningful undershoot and a bullish signal for anyone betting the Fed has room to move. Empire Manufacturing for July also crushed expectations, printing 15.6 against an 8.80 consensus. Canada posted a beat too, with May manufacturing sales rising 1.3% against a 1.1% forecast, and the Bank of Canada held rates at 2.25% as expected while calling Q2 "pretty solid."

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The Fed wasn't exactly sitting on its hands either. New Fed Chair Warsh testified before the Senate Banking Committee, while Governor Cook said it's "prudent to wait a bit longer" for inflation to slow — though the Fed is prepared to act. Williams doubled down, stressing the 2% inflation target is non-negotiable. The Beige Book confirmed growth is continuing but uncertainty is still the dominant theme. Read that as: rate cuts aren't dead, but they're not imminent either.

For FX, the dollar was little changed against majors heading into the session despite all the noise. That's telling — markets are in a wait-and-see mode, digesting geopolitical risk against softer inflation data. If PPI keeps printing below expectations and Iran tensions escalate oil further, something has to give on the dollar side. Watch the next CPI print closely.

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