Forex Today: Markets shrug off escalating tensions in Middle East

Here is what you need to know on Monday, June 1:

Major currency pairs struggle to pull away from the previous week's closing levels as investors largley brush off news pointing to a fresh escalation of tensions in the Middle East. In the second half of the day, the US economic calendar will feature the Institute for Supply Management's (ISM) Manufacturing Purchasing Managers' Index (PMI) data for May.

On Friday, United States (US) President Donald Trump said in a Truth Social post that they will lift the blockade and allow ships caught in the Strait of Hormuz to start the process of "heading home." Trump further noted that he will be having a meeting to make a final determination on a possible deal with Iran. In response, Iran's Fars News agency reported that Iran has rejected Trump's claims.

Late Sunday, the BBC reported that Trump is seeking changes related to the Strait of Hormuz and the removal of enriched uranium in the Memorandum of Understanding (MOU). Meanwhile, the US military said over the weekend that it attacked Iranian radar and drone sites in the city of Goruk and the island of Qehm. Iran's Islamic Revolutionary Guard Corps said on Monday it had targeted a US air base in response to the latest attack.

The US Dollar (USD) Index holds steady at around 99.00 in the European morning, while US stock index futures trade marginally higher on the day.

Gold corrects lower and declines toward $4,500 after posting gains for two consecutive trading days.

EUR/USD registered small gains on Friday and closed the week marginally higher. The pair struggles to find direction early Monday and fluctuates at around 1.1650.

GBP/USD moves sideways above 1.3450 after ending the previous week virtually unchanged.

USD/JPY edges slightly higher to start the new week and trades at around 159.50.

NZD/USD registered gains for three consecutive days and reached its highest level since late February near 0.6000 on Friday. The pair corrects lower on Monday and trades at around 0.5970.

AUD/USD moves sideways in a narrow band below 0.7200 in the European session on Monday.