Dollar Strengthens After Hot April CPI, Markets Monitor Iran Ceasefire
The US dollar strengthened for a second session on Tuesday after US inflation data showed price pressures were rising again, while uncertainty over the durability of the ceasefire in the Iran war also boosted safe-haven demand. The dollar index (DXY) rose 0.37% to 98.33, with the euro down 0.38% to US$1.1737.
April CPI rose 0.6% (as estimated) after 0.9% in March. Annually, CPI rose 3.8%, the highest since May 2023 and slightly above the 3.7% forecast, compared to 3.3% in March. Interest rate repricing intensified: markets increasingly discounted the chance of a Fed cut this year, while the probability of a hike of at least 25 bps at the December meeting rose to 31.3% from 23.6% (CME FedWatch).
On the monetary policy front, the Fed leadership succession process also gained attention after Kevin Warsh—President Donald Trump's pick—passed a key procedural stage in the Senate, nearing confirmation and transition from Jerome Powell, whose term as chairman ends Friday. Beyond data, geopolitical risks again boosted the energy risk premium after Trump called the Iran deal "on life support" and dismissed Tehran's demands as "garbage," fueling supply concerns. WTI rose 3.32% to around US$101.33 per barrel and Brent rose 3.27% to around US$107.62.
Elsewhere in the currency market, the dollar strengthened 0.28% against the yen to 157.59 after the yen's initial surge sparked speculation of a "rate check," often associated with early signs of potential intervention. US Treasury Secretary Scott Bessent stated that the US and Japan agree that excessive volatility is undesirable, comments seen as providing support for Tokyo's move to stabilize the yen.
The pound weakened 0.65% to US$1.3521 amid the UK political turmoil, while the dollar remained relatively stable against the offshore yuan at 6.792 ahead of the Trump-Xi meeting in Beijing, which is also expected to cover the issue of Taiwan and bilateral relations.
Sumber: newsmaker.id
