The dollar and other safe haven currencies regain tranquility in a turbulent global context

The dollar and other safe haven currencies regain tranquility in a turbulent global context

The moderation of the Iranian response to the Israeli attack brought some calm to operators, and the currencies seen as refuge gave up some of Thursday’s rise.

Photo: Vecteezy

The currency markets they returned to certain stability after a series of international news that generate sudden movements in prices: on the one hand, the possibility that the United States Federal Reserve (Fed) finally do not make any cuts in reference interest rates this year; and, on the other, the attack of Israel to Iran and a possible increase in conflict in Middle East. In Uruguay, meanwhile, the dollar He fell back.

Tranquility returned to be part of the markets after some currencies such as the Swiss franc and the japanese yen skyrocketed—more than 1% and more than 0.6%, respectively—after learning of the Israeli attack on the city of Isfahan, Iran, increasing the chances of an escalation of the conflict at the regional level. The movements in the markets responded to a massive liquidation of risk assets that drove up the prices of the Petroleum and the gold and caused a rise in Treasury bond and currencies seen as refuge.

Given the increase in risk perception, along with comments from Fed officials suggesting that the first interest rate cuts will hopefully come towards the end of the year, the global dollar It rose 0.2% at the close of trading on Thursday, to 106.15 units, close to the five-and-a-half-month high reached on Tuesday.

On Friday, meanwhile, dollar index also opened higher, although it later dropped to 106.11 units, accompanying the greater tranquility in the markets, based on what appears to be a moderate response by Iran to the Israeli attack.

Currencies bounced throughout the European morning session, with the euro initially falling but later rising to $1.0648. The British pound was stable at $1.2434.

The dollar continues to fall in Uruguay

In Uruguay, Meanwhile, the effect of international uncertainty was not felt and the dollar fell for the second consecutive day, marking another important decline: according to data from the Central Bank (BCU)the US currency closed at 38.378 pesos after falling 0.85%.

In this way, in the last two exchange sessions, the greenback lost 2.2% of its value and fell back to values ​​from two weeks ago, cutting the monthly improvement to 2.20%. Meanwhile, if compared with the end of 2023, the accumulated depreciation of the dollar So far this year it has reached 1.65%, deepening criticism for exchange delay.

Source: Ambito

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