Dollar Weakens After Iran Ceasefire Extension!
The US dollar weakened against all G-10 currencies after President Donald Trump announced he would extend the ceasefire with Iran, dampening demand for the greenback as a safe-haven asset. The Bloomberg Dollar Index fell 0.3%, while the US Dollar Index was down 0.06% on Wednesday (April 22nd) at 98.004.
Market sentiment was also influenced by easing geopolitical concerns in the Middle East, reflected in Brent's 0.7% decline amid speculation that easing tensions could help maintain the flow of supplies through the Strait of Hormuz. However, Trump emphasized that the US would maintain a naval blockade of the waterway, after Pakistan, which is mediating between the two sides, urged the US to refrain from further attacks.
In the foreign exchange market, most currency pairs tended to show limited movement but consistently strengthened against the dollar. EUR/USD rose 0.1% to 1.1752, GBP/USD strengthened 0.1% to 1.3519, and AUD/USD rose 0.3% to 0.7173. Meanwhile, USD/JPY fell 0.1% to 159.19, in line with the broad dollar's weakness.
Market participants remain vigilant about the potential for increased volatility as both sides are expected to strengthen their bargaining positions ahead of negotiations, although the risk of a major escalation is considered limited for now. Data-wise, UK inflation was recorded at 3.3% year-on-year last month, as expected, while the 10-year US Treasury yield remained relatively stable at 4.29%, indicating that market adjustments are driven more by changes in risk sentiment than shifts in interest rate expectations. (asd)
Source: Newsmaker.id
