Dollar Steady, Focus Shifts to Jobless Claims and PMI
The US dollar index (DXY) moved steadily during the US session on Wednesday (April 22), holding around a one-week high as markets viewed the extension of the US-Iran ceasefire as more of a "temporary pause" than a breakthrough, thus preventing the risk of war from truly abating. The DXY remained virtually unchanged at around 98.40 after briefly touching an intraday low of 98.21.
Trump extended the ceasefire just hours before it was due to expire, but Iran has not officially accepted the extension due to the ongoing US naval blockade—which Tehran has called a major obstacle to negotiations. Iranian Foreign Ministry spokesman Esmail Baghaei called the move "aggressive." Risk-on sentiment improved briefly following the extension announcement, but tensions in the Strait of Hormuz continued to support the dollar, especially as high oil prices remain high and inflation concerns persist.
Rising energy prices have diminished market expectations for an imminent Fed rate cut. A Reuters survey showed that 56 of 103 economists expect the Fed's benchmark interest rate to remain in the 3.50%–3.75% range until the end of September, a reversal from late March when nearly 70% still expected at least one cut. However, 71 economists still see the possibility of at least one cut by the end of the year.
Wednesday's US data calendar is relatively quiet, so the FX market remains headline-driven. The focus next shifts to Jobless Claims and the preliminary S&P Global PMI on Thursday, which could provide additional catalysts for the DXY's direction amid geopolitical dynamics and oil movements. (Arl)*
Source: Newsmaker.id
