Monday open indicative forex prices, 11 May 2026. USD bids.
The desk interprets the recent geopolitical tensions surrounding Iran's demands and President Trump's firm rejection as a catalyst for a modest uptick in the USD. Per the full note from Eamonn Sheridan, the USD is showing slight strength in early trading, coinciding with a slight rise in weekend oil prices. This backdrop suggests a market increasingly sensitive to geopolitical risks, which could influence currency flows and positioning. With the USD currently trading higher, traders should remain vigilant for further developments in the Iran situation and their potential impact on oil prices and the broader FX landscape.
What the desk is arguing
The desk frames this as a critical moment for the USD, bolstered by geopolitical tensions that traditionally favor safe-haven flows. The rejection of Iran's proposals by President Trump, described as 'TOTALLY UNACCEPTABLE', signals a potential escalation in conflict, which could further support the USD as traders seek refuge in safer assets.
Supporting this view, the USD has seen a slight increase in early trading, reflecting a market that is pricing in these heightened risks. The recent uptick in oil prices, which often correlate with USD movements due to the dollar's role in global oil trade, adds another layer of complexity to the current market dynamics.
Where it sits in our coverage
Our consensus target for the USD is 1.075, with a range between 1.04 and 1.12. Notable firm targets include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
This view aligns with jpmorgan, which sees the USD strengthening amid geopolitical tensions, while bofa presents a more cautious outlook, suggesting a lower target. The desk's call sits at the upper bound of the consensus range, indicating a more bullish stance on the USD compared to the broader market.
How other firms see it
Firms like jpmorgan and citi are aligned with the desk's bullish outlook on the USD, citing similar geopolitical concerns and their impact on safe-haven demand. Conversely, bofa and goldman express a more bearish sentiment, focusing on potential economic recovery and its implications for the USD.
Traders should also monitor the EUR/USD trajectory, as it often reflects broader market sentiment towards the USD, particularly in light of the ECB's monetary policy stance and potential shifts in economic data.
What the calendar says
With no significant economic events scheduled in the immediate term, traders should remain focused on geopolitical developments, particularly regarding Iran, as these could serve as catalysts for volatility in the USD and related currency pairs.
Sources & References
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