Dollar Remains Under Pressure, Markets Monitor Chances of US-Iran Peace
The US dollar index edged up to around 99.8 on Friday (June 12th), but held onto most of the previous session's losses. Pressure on the dollar arose as demand for safe-haven assets began to wane after US President Donald Trump said a peace deal with Iran could be signed as early as this weekend in Europe.
This statement immediately impacted global market sentiment. Oil prices fell sharply as investors began to ease concerns about energy supply disruptions from the Middle East. The decline in oil prices also eased concerns that inflation would persist due to soaring energy costs.
However, in terms of economic data, inflationary pressures in the US have not completely dissipated. US Producer Price Index (PPI) data showed that producer prices rose 6.5% annually in May, higher than market expectations of 6.4%. This figure was the highest level since November 2022 and indicated that the impact of the Middle East energy shock was beginning to be felt on production costs.
This situation has put the market in a cautious position. On the one hand, the possibility of a US-Iran peace deal has reduced demand for the dollar as a safe asset. However, on the other hand, persistently hot inflation data could strengthen expectations that the Federal Reserve could raise interest rates again later this year. This means that the dollar's future direction will still depend heavily on geopolitical developments and the Fed's stance. (asd)
Source: Newsmaker.id
