FX Daily: Re-escalation and data make USD sole winner in Daily Currencies Ratings 04/06/2026 USD: Stronger and stronger It’s hard to argue against dollar strength at this juncture. Data continues to paint a picture of resilience for the US economy – ADP payrolls and ISM services were both firm yesterday – and fresh US-Iran military exchanges have driven a risk-off shift in global markets. Yesterday’s House resolution to end the war is meaningful, but it doesn’t block new military operations. It highlights domestic pressure for a peace deal, but markets already understand this, and it has not yet translated into tangible progress in negotiations. The US data calendar is quieter today before tomorrow’s jobs report. Some focus will be on Challenger job cuts data for May or weekly jobless claims only if they show a meaningful acceleration. The Fed’s Beige Book released yesterday signalled a steady outlook for employment despite inflationary pressures. A few dollar crosses are attempting to make decisive breaks away from key psychological levels. EUR/USD at 1.160, USD/JPY at 160.0, USD/CAD at 1.390. We think those breaks will come unless the next few days bring renewed optimism from the Middle East. The 100 mark in DXY looks within reach in the current environment. Francesco Pesole EUR: Looking down Our macro team has published an updated preview of next week’s ECB meeting. The call is unchanged and fully aligned with consensus and pricing: a 25bp hike. Our view is that the ECB will err on the hawkish side to keep at least one additional hike priced in and to safeguard inflation expectations. Still, a week is a long time in the current environment. By the time the ECB delivers, a lack of progress in the Gulf may already have dragged EUR/USD back to 1.150. Yesterday’s upward revision in the eurozone’s composite PMIs offered little reassurance to EUR bulls, which remain vulnerable to a deteriorating domestic outlook and softer global risk sentiment whenever hopes for a pea