Dollar Softens Slightly as Fragile U.S.–Iran Ceasefire Holds
The Bloomberg Dollar Spot Index slipped 0.1% on Tuesday as oil prices eased and Washington played down the risk of a return to full-scale war with Iran, following a day of clashes involving ships in the Strait of Hormuz and missile strikes targeting the United Arab Emirates. Within the G10 complex, the Japanese yen was the laggard, underscoring how markets remain cautious amid persistent geopolitical uncertainty.
On the data front, the U.S. services sector continued to expand but at a slower pace. The ISM services index fell to 53.6 in April—its lowest in five months—from 54 previously, as order growth moderated while input costs stayed sharply elevated. In FX, USD/JPY rose 0.4% to 157.86, marking a third straight day of gains. AUD/USD climbed 0.3% to 0.7188, staying near the 0.7228 level reached on May 1—its highest since 2022—after Australia’s central bank delivered a third consecutive rate hike. Governor Michele Bullock signaled policymakers will now pause to assess the next steps.
Sterling edged up 0.1% to 1.3550, even as UK long-term borrowing costs jumped to a 28-year high amid heightened concerns around local government elections and the economic impact of elevated energy prices. Standard Chartered recommended a short GBP/USD trade with a 1.3130 target and a 1.3720 stop-loss, arguing UK political risk premia may be underpriced, while high oil prices, weaker equities abroad and early signs of a firmer U.S. labor backdrop support the dollar. EUR/USD ticked 0.1% higher to 1.1700. USD/CHF fell 0.2% to 0.7827 after Swiss inflation accelerated to a 16-month high in April, driven by rising energy costs linked to the Middle East conflict.
Source : Newsmaker.id
