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Dollar, yen fall as safe-haven demand, U.S. interest rate cuts speculate weigh on markets
(MENAFN) On Tuesday, both the dollar and the yen experienced declines, reversing some of their earlier gains as investors sought safe-haven assets amid escalating tensions between Israel and Lebanon's Hezbollah. The exchange of fire between the two parties heightened concerns about a broader conflict, leading to increased demand for safe-haven currencies. This geopolitical uncertainty, combined with speculation about an imminent U.S. interest rate cut, contributed to the pressure on the dollar. However, currency movements remained relatively stable during the Asian trading session due to a lack of significant news affecting forex markets.
The yen was last seen down 0.1 percent at 144.65 per dollar, after having risen to a three-week high of 143.45 per dollar earlier in the week due to its safe-haven appeal. Conversely, the euro and the pound both saw modest increases, with the euro up about 0.1 percent to USD1.1172 and the pound rising 0.1 percent to USD1.3201, staying close to multi-month highs. The Canadian dollar also saw a slight rise to 1.34875 against the greenback, benefiting from higher oil prices, which had pushed it to a five-month high on Monday.
The broader trend indicates that most currencies are holding near record highs, with the dollar lingering close to its lowest level in over a year. This is largely attributed to the anticipated U.S. interest rate cut in September, as signaled by Federal Reserve Chairman Jerome Powell's recent speech in Jackson Hole. The dollar index, which tracks the greenback's performance against a basket of six major currencies, fell 0.03 percent to 100.82, remaining near a 13-month low of 100.53 reached earlier. The past two years have seen the dollar's strength largely driven by the Federal Reserve's rate hike cycle and expectations for future increases, which have exerted considerable pressure on other currencies, particularly the Japanese yen.
The yen was last seen down 0.1 percent at 144.65 per dollar, after having risen to a three-week high of 143.45 per dollar earlier in the week due to its safe-haven appeal. Conversely, the euro and the pound both saw modest increases, with the euro up about 0.1 percent to USD1.1172 and the pound rising 0.1 percent to USD1.3201, staying close to multi-month highs. The Canadian dollar also saw a slight rise to 1.34875 against the greenback, benefiting from higher oil prices, which had pushed it to a five-month high on Monday.
The broader trend indicates that most currencies are holding near record highs, with the dollar lingering close to its lowest level in over a year. This is largely attributed to the anticipated U.S. interest rate cut in September, as signaled by Federal Reserve Chairman Jerome Powell's recent speech in Jackson Hole. The dollar index, which tracks the greenback's performance against a basket of six major currencies, fell 0.03 percent to 100.82, remaining near a 13-month low of 100.53 reached earlier. The past two years have seen the dollar's strength largely driven by the Federal Reserve's rate hike cycle and expectations for future increases, which have exerted considerable pressure on other currencies, particularly the Japanese yen.
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