Dollar Steady, Fed in Focus After US-Iran Deal
The US dollar held steady around 99.7 on Tuesday after weakening in the previous session. Markets began shifting focus from news of a US-Iran peace deal to this week's Federal Reserve policy decision.
On Monday, the dollar was under pressure after President Donald Trump announced that the US had reached a peace agreement with Iran. The agreement is expected to reopen access through the Strait of Hormuz and is scheduled to be signed in Switzerland on Friday. This sentiment reduced demand for the dollar as a safe-haven asset.
However, the dollar's decline did not continue sharply as investors awaited clarity from the Fed. The US central bank is expected to maintain interest rates at its first meeting under new Chairman Kevin Warsh. However, inflationary pressures remain a concern after the Iran conflict pushed energy prices higher.
Fundamentally, the dollar is currently caught between two forces. The US-Iran deal could reduce energy risks and ease inflationary pressures, but hotter inflation data keeps the market cautious about the possibility of a tighter Fed stance. If the Fed signals a hawkish stance, the dollar could potentially regain support.
This week's market focus also includes decisions by other central banks, including Japan, Australia, the UK, and several major economies. The dollar's next direction will depend on the Fed's tone, developments in the final US-Iran deal, oil prices, and market expectations regarding global interest rates. (asd)
Source: Newsmaker.id
