Dollar Strengthens Slightly, Markets Await Clarity on Iran Talks
The US dollar continued to strengthen against nearly all G-10 currencies on Monday (April 21). This strengthening was in line with market participants awaiting confirmation on whether Iran would join talks that could potentially extend the ceasefire in the Middle East. The Bloomberg Dollar Spot Index rose 0.2% after falling 0.1% on Monday.
In the bond market, the 10-year US Treasury yield remained relatively stable at 4.25%, ahead of Kevin Warsh's testimony before the Senate Banking Committee on the Federal Reserve chairman's agenda. Options activity also tended to be quiet, with volume around 70% of the recent average, while implied volatility remained near cyclical lows across major currencies.
Meanwhile, USD/JPY rose 0.3% to 159.26, with short-term yen volatility erasing Monday's losses and beginning to incorporate risk ahead of next week's Bank of Japan meeting. Technically, Bollinger Band constriction was at its tightest level since September, a condition that historically often precedes sharper directional moves.
For European currencies, EUR/USD fell 0.3% to 1.1757 after German investor optimism plummeted to its lowest level in more than three years amid the impact of the Iran war on economic recovery prospects. GBP/USD pared early losses and remained trading above 1.3500, as domestic political developments in the UK returned to market attention. (gn)
Source: Newsmaker.id
