Image Credit: Reuters

Dollar Steady as Powell Highlights Inflation Threats

The US dollar held firm on Wednesday, buoyed by comments from Federal Reserve Chair Jerome Powell, who reiterated the central bank’s commitment to curbing inflation. His remarks, delivered in prepared testimony before Congress, emphasized that inflation remains uncomfortably high—keeping hopes for near-term interest rate cuts in check.

The dollar index, which measures the greenback against a basket of major currencies, hovered near 105.20, reflecting investor caution and support for safe-haven assets. Powell’s tone was measured but firm, noting that while inflation has eased from its peak, it has not cooled sufficiently to warrant a shift in monetary policy.The Economic Times

Cautious Markets as Middle East Risks Intensify

Meanwhile, global financial markets were on edge as geopolitical tensions flared in the Middle East. Oil prices fell as traders assessed the potential for US intervention in the Israel-Iran conflict, which could complicate regional dynamics and impact global supply chains.

Brent crude slipped 2.4% to trade near $72.50 per barrel, while West Texas Intermediate (WTI) declined 2.5%, settling around $69.00. Despite the potential for disruption in one of the world’s key oil-producing regions, markets are grappling with mixed signals—balancing fears of conflict with broader macroeconomic concerns. Reuters

Fed Stance Reinforces Dollar's Strength

The Fed’s cautious approach is reinforcing the dollar’s relative strength, especially as other central banks, such as the European Central Bank, begin signaling potential rate cuts. Investors now expect the Fed to keep interest rates elevated for longer, which continues to lend support to the US currency and weigh on risk sentiment globally. US News

While markets had been eyeing a possible rate cut later this year, Powell’s testimony suggests policymakers remain wary of premature easing. The path to the Fed’s 2% inflation target is still seen as uneven, further justifying a wait-and-see approach.

Outlook: Safe Havens in Focus

With rising geopolitical tensions and lingering inflationary pressures, investors are increasingly turning to safe-haven assets such as the dollar and US Treasuries. This sentiment may persist in the near term, especially if Middle East instability escalates or inflation surprises to the upside.

In the coming days, markets will closely monitor further Fed communications and developments in the Middle East for cues on monetary policy, oil supply, and risk appetite. The Business Times

 

To learn more news , be sure to check out here:  Dupoin

 

 

Disclaimer

Derivative investments involve significant risks that may result in the loss of your invested capital. You are advised to carefully read and study the legality of the company, products, and trading rules before deciding to invest your money. Be responsible and accountable in your trading.

RISK WARNING IN TRADING

Transactions via margin involve leverage mechanisms, have high risks, and may not be suitable for all investors. THERE IS NO GUARANTEE OF PROFIT on your investment, so be cautious of those who promise profits in trading. It's recommended not to use funds if you're not ready to incur losses. Before deciding to trade, make sure you understand the risks involved and also consider your experience.