The U.S. dollar opened weaker on Tuesday as investors gauged developments in the Middle East and braced for a slew of central bank officials’ speeches this week, with Fed Chair Jerome Powell gauging the outlook for monetary policy.
The yen has been pegged at a key level of 150 yen to the dollar, and traders remain on the lookout for signs of intervention by Japanese authorities. The yen was recently valued at 149.62 yen to the dollar, and on October 3 it fell to a one-year low of 150.17 yen, but the temporary rise was a relief.
Masato Kanda, Japan’s top financial diplomat, said that despite the recent yen weakness, the yen is still seen as a safe-haven asset, along with the dollar and Swiss franc, and is benefiting from demand from the Middle East conflict. Stated. The Israeli shekel on Monday broke above the key level of 4 shekels to the dollar for the first time since 2015, due to unrest over the war between Israel and the Palestinian militant group Hamas. The dollar was last down 1% at $4.0199 in early Asian time.
“Geopolitics will continue to dominate markets over the coming week, as investors continue to weigh the risks of escalation from US authorities’ approach to preventing the conflict from spreading to other parts of the region,” Charu Chanana said. “It will be a major driving force.” Market Strategist at Saxo in Singapore. The dollar index, which measures the value of the U.S. currency against six rival currencies, fell 0.038% to 106.20, after falling 0.36% on Monday.
Investor attention will be firmly on Federal Reserve Chairman Jerome Powell, who is scheduled to speak on Thursday, in a week full of speeches from regional bank leaders. Fed officials plan to enter a blackout period on Oct. 21 ahead of the Oct. 31-November Fed period. 1 meeting. Philadelphia Fed President Patrick Harker said Monday that the central bank should not create new pressure on the economy by increasing borrowing costs.
“We shouldn’t be thinking about raising the Fed’s interest rate target at this point,” Harker said. Christopher Wong, currency strategist at OCBC, said the dollar is likely to remain range bound for now.
“A long-term rise (in interest rates), the relative resilience of US growth, and concerns about escalating conflict are some of the factors that could support support for the dollar,” Wong said. “However, the Fed’s less hawkish comments suggest it may be preparing for an extended pause, which could ease dollar upside.”
Among other currencies, the euro fell 0.01% on the day to $1.0557, while the pound sterling fell 0.02% on the day to close at $1.2214. The Australian dollar rose 0.27% to $0.636. The Reserve Bank of Australia considered raising interest rates at its most recent policy meeting, but decided there was not enough new information to justify the action, according to minutes from the Reserve Bank of Australia’s October 3 policy meeting.
Figures on Tuesday showed the country’s consumer inflation rate hit a two-year low in the second quarter, reducing expectations that the central bank would raise the cash rate further in November. The New Zealand dollar fell 0.30% to $0.591.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
