{"id":44154,"date":"2026-04-06T16:16:49","date_gmt":"2026-04-06T16:16:49","guid":{"rendered":"https:\/\/www.vtmarketsglobal.com\/en\/uncategorized\/44154\/"},"modified":"2026-04-06T16:16:49","modified_gmt":"2026-04-06T16:16:49","slug":"mufgs-lloyd-chan-says-iran-tensions-higher-us-yields-and-strong-jobs-data-bolster-dollar-carry-appeal","status":"publish","type":"post","link":"https:\/\/www.vtmarketsglobal.com\/en\/live-updates\/44154\/","title":{"rendered":"MUFG\u2019s Lloyd Chan says Iran tensions, higher US yields and strong jobs data bolster Dollar carry appeal"},"content":{"rendered":"Geopolitical tensions linked to Iran are supporting the US dollar, alongside higher US yields, firm US labour data and reduced expectations for Federal Reserve rate cuts. The dollar is also benefiting in risk-off market conditions.\n\nUS 2-year yields are above 3.8% and sit above the effective federal funds rate. Markets are no longer pricing any rate cuts this year, which supports the dollar\u2019s carry advantage.\n\n<h3>Energy Flow Risk Through Strait Of Hormuz<\/h3>\nPotential disruption to energy flows through the Strait of Hormuz is a key risk, with greater exposure for Asian economies. Oil prices are expected to stay elevated, with risks tilted towards further gains.\n\nThe article states it was produced using an AI tool and reviewed by an editor.\n\nGiven the ongoing geopolitical risks and supportive US economic data, the environment continues to favor a stronger US dollar. Last week\u2019s incident involving a tanker near the Strait of Hormuz has kept markets on edge, pushing investors toward safety. We see this trend persisting, making long dollar positions the primary strategy for the coming weeks.\n\nThe Federal Reserve\u2019s position solidifies this view, as last Friday\u2019s March Non-Farm Payrolls report showed a robust addition of 245,000 jobs. This strong labor market, combined with the 2-year Treasury yield holding firm above 3.85%, gives the Fed no reason to consider cutting rates. Consequently, the dollar\u2019s appeal from a yield perspective, known as carry, remains very high.\n\n<h3>Higher For Longer Supports Dollar Carry<\/h3>\nWe recall how markets in late 2024 and through 2025 consistently tried to price in Fed rate cuts, only to be proven wrong by stubborn inflation and a resilient economy. This experience should guide our current thinking, reinforcing the credibility of the &#8220;higher-for-longer&#8221; rate narrative. Derivative strategies betting on a sudden dovish pivot from the Fed carry significant risk.\n\nThe tensions are also keeping energy prices elevated, with WTI crude futures now pushing past $92 per barrel. This acts as a drag on major energy-importing regions like Europe and Asia, placing further downward pressure on their currencies relative to the dollar. We should consider options that benefit from continued high oil prices, such as call spreads on major energy ETFs.\n\nFor direct currency exposure, buying call options on the US Dollar Index (DXY) offers a broad approach to this strong dollar theme. More targeted trades include purchasing puts on the Japanese Yen, which is especially vulnerable to widening interest rate differentials with the US. The path of least resistance for the USD\/JPY pair appears to be upward in this environment.\n\n<b><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\">Create your live VT Markets account<\/a>\u00a0and\u00a0<a href=\"https:\/\/myaccount.vtmarkets.com\/login\">start trading<\/a>\u00a0now. <\/b>\n<p>\r\n\r\n<p><strong>Start trading now &#8211; Click <a href=\"https:\/\/www.vtmarketsglobal.com\/en\/trade-now\/\">here<\/a> to create your real VT Markets account <\/strong> <\/p>\r\n<!-- \/wp:post-content -->","protected":false},"excerpt":{"rendered":"<p>Iran-linked tensions and higher US yields boost dollar; Fed cuts repriced, oil risks via Hormuz persist.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-44154","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/44154","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=44154"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/44154\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=44154"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=44154"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=44154"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}