Dollar Weakens, Focus Shifts to Negotiations and the Fed
The US dollar weakened against the euro on Monday (April 20), amid optimism that a ceasefire agreement in the Iran war is still possible, despite rising tensions between Washington and Tehran over the weekend. The dollar index fell 0.39% to 98.07, while the euro rose 0.16% to US$1.1781. The yen weakened 0.1% to 158.81 per dollar, and the pound strengthened 0.16% to US$1.3535.
Dollar sentiment was also influenced by diplomatic developments. A senior Iranian official said Tehran was considering attending peace talks with the US in Pakistan, after Islamabad moved to end the US blockade of Iranian ports—a major obstacle to Iran's return to negotiations. However, the risk of escalation remains high after the US seized an Iranian-flagged cargo ship it said was attempting to breach the blockade, while Iran vowed to retaliate.
The war, now in its eighth week, continues to pose a major energy supply shock, with the Strait of Hormuz—the route for about a fifth of global oil shipments—repeatedly disrupted by the US blockade of Iranian ports and Iran's policy of easing and then reimposing shipping restrictions. Oil prices rose more than 5% on Monday, maintaining inflationary pressures and volatility across assets.
On the market agenda, market participants also await Kevin Warsh's confirmation hearing on Tuesday as Federal Reserve Chair, after his statement stated he was committed to maintaining monetary policy independence. This week's focus will include the certainty of the schedule and outcome of the Pakistan talks, the status of the Iranian port blockade and the Hormuz flow, and market reactions to oil and Fed policy signals. (Arl)*
Source: Newsmaker.id
