Dollar Weakens, Hopes for US-Iran Talks and Fed Issues Pressure Greenback
The US dollar fell on Friday (April 24th) after signs emerged that the US and Iran were moving toward talks after several days of deadlock, fueling hopes for a diplomatic path to de-escalate the war. Pressure on the dollar increased after the Department of Justice (DOJ) announced it was ending its investigation into the Federal Reserve, which was seen as paving the way for President Donald Trump's preferred candidate, Kevin Warsh, to run for Fed Chair and potentially pushing for a more dovish policy stance.
The Bloomberg Dollar Spot Index fell 0.2%, trimming this week's gain to around 0.3% after three weeks of declines. CFTC data showed non-commercial investors trimmed their long dollar positions for the second straight week: bullish bets fell to around US$11.6 billion from US$14.6 billion the previous week. However, market participants remained skeptical; Rabobank assessed that the gap in US-Iran negotiations remains wide, leaving room for disappointment.
In FX, NZD/USD jumped 0.5% to 0.5881 and GBP/USD rose 0.5% to 1.3530, while EUR/USD strengthened 0.3% to 1.1716. USD/JPY fell 0.2% to 159.42 after Japanese Finance Minister Satsuki Katayama reiterated his readiness to take firm action against speculative movements. Next week, the market will also face policy meetings by major central banks—the Bank of Japan, the Fed, the Bank of China, the ECB, and the Bank of England—which have the potential to increase currency volatility. (Arl)*
Source: Newsmaker.id
