Dollar Falls Slightly, Markets Hold Positions Ahead of Araqchi's Visit to Islamabad
The US dollar weakened slightly on Friday (April 24th), but remained on track for weekly gains as market participants continued to assess the chances of a resolution to the US-Israel war against Iran. Movements were limited as optimism for a short-term deal alternated with concerns about a prolonged war that could trigger longer-term energy disruptions, discouraging many traders from adding large positions.
The dollar index (DXY) fell 0.11% to 98.71, but was still on track for a weekly gain of around 0.50%. The euro rose 0.14% to US$1.1699 but was on track for a weekly decline of 0.53%. The yen edged up 0.05% to 159.62 per dollar, while the pound gained 0.16% to US$1.3488. The diplomatic spotlight was on the arrival of Iranian Foreign Minister Abbas Araqchi in Islamabad on Friday, which rekindled hopes that talks could resume after this week's failed attempts.
Market focus has also shifted to next week's central bank agenda. Fed funds traders peg the chance of a Fed rate cut this year at just 23%, reflecting concerns that inflation could rebound. The ECB is expected to hold its deposit rate on hold on April 30, but more than half of economists surveyed by Reuters expect a hike in June to cushion the impact of the energy shock. The Bank of England meets on Thursday; markets are pricing in a rate hike before the end of the year, although next week's rate is expected to remain unchanged. In Japan, core inflation slowed below its 2% target for a second month in March, but the Bank of Japan is expected to keep rates on hold while reiterating its readiness to tighten if price pressures increase due to fuel costs.
In Japan, Finance Minister Satsuki Katayama again issued a verbal warning about intervention, asserting that authorities are ready to act "firmly" against speculative movements. In crypto, bitcoin rose 0.30% to US$78,186. The market is now awaiting concrete signals from Iran's diplomatic path as well as the direction of major central bank decisions, which will shape dollar sentiment and cross-asset volatility. (Arl)*
Source: Newsmaker.id
