He global dollar rose on Tuesday after the attack Iran to Israel which escalated tensions in Middle East and after the president of the United States Federal Reserve (Fed), Jerome Powellrejected bets on more large interest rate cuts.
He dollar index rose 0.45% to 101.20, marking a one-week high, after having posted a third consecutive monthly drop on Monday, with a drop of almost 1% in September, reported Reuters, while the oil It also rose due to the attack on Israeli soil.
The dollar rose 0.1% to 143.57 yen, having ranged from a high of 146.495 yen on Friday to a low of 141.65 yen on Monday.
He euromeanwhile, was trading at $1.1085, near one-week lows after a drop in German inflation to the lowest level since early 2021, fueling speculation about another rate cut this month by the European Central Bank (ECB).
Investors play it safe after Israel’s attack on Iran
Haven currencies strengthened after Iran launched missiles towards Israel, to which, in the case of dollar, was also strengthened by data showing a labor market tough American.
“The market has largely ignored the conflict of Middle East over the last month, but a direct confrontation between Iran and Israel always runs the risk of escalating,” he said. Adam Button chief currency analyst at ForexLive in Toronto.
He japanese yen fell 0.04% against the dollar and stood at 143.7 per dollar. The dollar had reached 144.53 yen before news of Israel’s missile launch broke.
In front of swiss franc, The dollar strengthened 0.2% to 0.847. The Swiss currency rallied following the missile news, before reversing gains and trading close to where it had been before the news.
An unhurried Fed seeks to contain the market
In the United States, Powell adopted a more aggressive tone in his speech at a conference in Tennesseesaying the world’s largest central bank will likely stick with interest rate cuts of a quarter of a percentage point from now on. “This is not a committee that is in a rush to cut rates quickly,” he said.
Operators remain confident that the Fed will cut rates again at the next monetary policy meeting in November, but they reduced the possibility of the reduction being 50 bp from 53.3% to 35.4%, according to the tool FedWatch from CME Group.
“The door hasn’t been closed on a 50 basis point cut, because if the economic data falls, then it’s justified. But Powell clearly thinks markets are overenthusiastic,” said Matt Simpson, senior market analyst at City Index.
The speech of the president of the Fed It came ahead of a busy week of US data, including the Institute for Supply Management’s manufacturing index this Tuesday and the non-manufacturing report on Thursday, followed by potentially crucial monthly jobs numbers on Friday.
Source: Ambito
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