Dollar Edges Higher, Paring Losses After Iran Attack Report
The Bloomberg Dollar Index edged higher ahead of Tuesday's (May 26) session, as investors weighed the impact of the US attack on Iranian vessels amid talks to extend the Middle East ceasefire. Under these conditions, the market tends to prioritize geopolitical risk as the primary short-term driver.
The Bloomberg Dollar Spot Index rose 0.1%, with the dollar strengthening against all G10 currencies. This strengthening was in line with the resurgence of safe-haven demand following the attack headlines, even though negotiations were reportedly still ongoing.
The attack occurred hours after US President Donald Trump stated that negotiations with Tehran on an interim agreement were showing progress. The combination of diplomatic signals and escalation on the ground made the market more reactive to headlines than data.
In the bond market, US 10-year Treasuries pared initial gains following the attack reports. The yield briefly fell as much as 7 basis points to 4.49% in a catch-up move after the US public holiday on Monday, before recovering to around 4.5%.
Market participants are also awaiting the release of the Conference Board's US consumer confidence figures, with economists' consensus forecasting 92 for May, compared to 92.80 in the previous month. However, some analysts believe the economic data is at risk of being overshadowed by near-term geopolitical developments.
In the forex market, USD/JPY consolidated at 158.96 after Bank of Japan (BOJ) Deputy Governor Ryozo Himino emphasized the importance of maintaining market confidence in controlling inflation by adjusting the degree of easing. NZD/USD fell 0.3% to 0.5852, while EUR/USD fell 0.1% to 1.1635, and GBP/USD weakened 0.1% to 1.3489. (asd)
Source: Newsmaker.id
