Pound and Euro Weaken, Yen in Market Focus
The US dollar moved steadily in European trading on Monday (June 22nd), as investor optimism grew regarding the initial talks between the United States and Iran. The dollar index, which measures the greenback's strength against six major currencies, hovered around 101, near its highest level in the past year. Market sentiment improved slightly after Qatar and Pakistan, acting as mediators, stated that the US and Iran had agreed on a roadmap toward a final agreement to end the conflict within 60 days.
However, the market has not yet fully calmed down. The peace talks are still overshadowed by US President Donald Trump's threat to resume attacks if Iran does not curb Hezbollah's influence in Lebanon. Meanwhile, Iran's decision to close the Strait of Hormuz further heightened investor concerns, as this route is a vital route for global energy trade. This situation has maintained support for the dollar as a safe haven asset, although diplomatic optimism has begun to limit further gains.
In major currency markets, the pound sterling weakened around 0.3% to US$1.32 amid growing political uncertainty in the UK. Prime Minister Keir Starmer is reportedly considering his political future following his rival Andy Burnham's landslide victory in the parliamentary by-elections. Meanwhile, the euro also weakened 0.27% to US$1.1443 as investors remained cautious amid a combination of geopolitical risks and expectations of tighter monetary policy from the Fed.
The market's biggest focus is currently on the Japanese yen, which has weakened to around 161.66 per US dollar, just below the 161.96 level, which, if broken, would bring the yen to its weakest level since 1986. Japanese Finance Minister Satsuki Katayama stated that authorities are ready to respond appropriately to currency movements at any time, raising market participants' vigilance over potential intervention from Tokyo. Pressure on the yen is intensifying as expectations of a Fed rate hike encourage investors to expand their long dollar positions, with CFTC data showing speculators holding the largest bullish dollar position in 16 months, worth nearly US$30 billion. (arl)
Source: Newsmaker.id
