The Dollar held firm on Wednesday during Asian trading and briefly reached a one-week high, as doubts over US President Donald Trump’s claim of an open-ended ceasefire with Iran increased demand for the safe-haven currency.
It was further supported by remarks from Federal Reserve nominee Kevin Warsh during his Senate confirmation hearing, which were seen as somewhat hawkish, along with robust retail sales figures that painted a positive picture of the US economy’s strength.
The US Dollar index, which tracks the greenback against a basket of six currencies, slipped to 98.367 after earlier climbing to its highest level since 13th April, Reuters reports.
Trump indefinitely pushed back the ceasefire deadline while maintaining the blockade on Iranian ports, leaving the timeline for restoring normal energy exports through the Strait of Hormuz uncertain.
Most other currencies showed little movement following the ceasefire extension. The Euro held steady at $1.1742, while the British Pound remained unchanged at $1.3511. The Australian Dollar edged up 0.1% to $0.7157, and the New Zealand Dollar gained 0.2% to $0.5907.
In addition, against the Yen, the US Dollar was flat at 159.35, after earlier data indicated Japan’s exports increased for a seventh consecutive month, suggesting limited impact from disruptions linked to the Gulf conflict.
Furthermore, US retail sales rose 1.7% in March, surpassing expectations of a 1.4% increase, as the conflict with Iran pushed up gasoline prices and drove a record jump in service station receipts, while tax refunds supported spending in other areas.
In Washington, Warsh said on Tuesday that he had made no commitments to Trump regarding lowering interest rates, seeking to reassure US senators considering his nomination to head the central bank that he would operate independently of the White House while advancing broader reforms.
Traders are scaling back expectations for when the Federal Reserve might begin easing monetary policy, with little confidence that rate cuts will come before well into 2027.
Fed funds futures indicate a 59.7% probability that the central bank will keep rates unchanged until its meeting ending 28th April next year, up from a 56.7% chance of a cut the day before, according to CME Group’s FedWatch tool.