Dollar Under Pressure, Iran Peace Signal
The US Dollar Index weakened again on Friday (July 10th), hitting a three-week low. The DXY, which measures the dollar's strength against six major currencies, fell around 0.3% to near 100.60 during the Asian session.
This weakening occurred as the market saw signs of de-escalation in the conflict between the United States and Iran. A report from the Times of Israel stated that a US official signaled that Washington remains committed to the memorandum of understanding (MoU) with Iran, even though US President Donald Trump previously stated that the deal was over.
The signal that technical talks are still ongoing has diminished the dollar's appeal as a safe haven. When the risk of war decreases, investors typically begin to move out of safe assets like the US dollar and return to riskier assets. This condition has caused the greenback to continue its weakening for the third consecutive trading day.
However, the dollar's decline is potentially limited because oil prices remain high due to concerns about energy supply disruptions. If oil prices continue to rise, inflationary pressures could increase again. This situation could make the Federal Reserve more cautious about lowering interest rates, even maintaining a tight policy stance for longer.
Regarding monetary policy, Fed Chairman Kevin Warsh also announced the members of five task forces previously promised at the June policy meeting. These task forces will focus on communication, balance sheet policy, economic data quality, productivity and employment, and developing an inflation framework. The market will now be watching to see whether this step signals a change in the Fed's future policy direction. (asd)*
Source: Newsmaker.id
