Dollar Under Pressure Despite Blockade, Focus on Islamabad
The US dollar fell slightly on Tuesday (April 14th) and headed for its seventh straight daily decline, as market participants hoped for a diplomatic breakthrough in the Middle East despite the US military's imposition of a blockade of Iranian ports. The dollar index (DXY) fell 0.09% to 98.25, near its weakest level since early March.
Market expectations rest on the possibility of US and Iranian negotiating teams returning to Islamabad later this week, after the highest-level talks in decades ended inconclusively over the weekend. President Donald Trump said Iran has contacted the US and wants to reach a deal, but he stressed it would not accept an agreement that would allow Tehran to acquire nuclear weapons.
On the risk side, the blockade of Iranian ports adds uncertainty to the restoration of the Strait of Hormuz and prolongs disruptions to global energy routes. The closure of the narrow waterway previously boosted dollar-denominated oil prices and served as a support for the greenback, but now the market is more focused on the potential for de-escalation and the unwinding of safe-haven positions.
In the G-10, the euro rose 0.17% to US$1.1776, and the pound sterling strengthened 0.17% to US$1.3527. The dollar also weakened nearly 0.2% against the yen to 159.16, although the yen remains vulnerable due to the risk of a worsening Japanese trade balance if oil prices remain high. Market attention remains on the 160 per dollar area, which is seen as a sensitive level that could again raise the risk of intervention by Japanese authorities.*
Source: Newsmaker.id
