Risk-Off Rebounds: Dollar Hits Weekly High
The dollar index strengthened on Tuesday (April 21) alongside rising oil prices ahead of the US-Iran ceasefire deadline, as markets reassessed the scenario of a re-escalation amid uncertainty over the continuation of talks. The Bloomberg Dollar Spot Index rose 0.5% to its highest in more than a week, amid reports that JD Vance's trip to Islamabad was delayed due to Iran's failure to respond to US conditions. In major markets, USD/JPY rose 0.4% to 159.50, while EUR/USD fell 0.4% to 1.1741 and GBP/USD weakened 0.3% to 1.3498.
The dollar's strength was also supported by solid US data. Retail sales in March jumped 1.7% (the largest in a year) after a revised 0.7% increase in February, while the preliminary ADP/Stanford estimate showed private payrolls increased by an average of 54,750 per week in the four weeks to April 4. This combination of data reinforces the narrative of US economic resilience and provides a cushion for the dollar as geopolitical risks rise again.
Outside the US, monetary policy signals are adding to the FX dynamics. The Bank of Japan is said to be leaning towards holding interest rates next week due to uncertainty surrounding the Iran war, while in New Zealand inflation remains above the RBNZ target, and markets are raising bets for a July rate hike ahead of the ongoing impact of the fuel price surge. In Europe, German investor sentiment fell to a more than three-year low, pressuring the euro, while domestic political issues in the UK are again weighing on sterling. (Arl)*
Source: Newsmaker.id
