Washington (awp/afp) – The dollar showed no clear direction on Monday, with uncertainty in the Middle East following the failure of negotiations between Washington and Tehran leading to cautiousness among currency traders before several central bank meetings.
“Over the weekend, the chaotic geopolitical situation in the Middle East has hardly changed,” despite investor hopes, as noted by Monex USA.
During a visit to Russia, Iranian Foreign Minister Abbas Araghchi accused Washington on Monday of causing the peace talks to fail.
American President Donald Trump is set to hold a crisis meeting on Iran on Monday, according to local media reports.
According to Axios, Iran has presented the United States with a new proposal to reopen the Strait of Hormuz and end the war, and only negotiate on the nuclear issue at a later date.
This news, initially welcomed with optimism by the market, initially caused the dollar to weaken at the start of the day.
However, this momentum slowed, and by 18:15 GMT, the U.S. currency had stabilized against the euro (-0.01% at 1.1723 dollars) and the British pound (-0.04% at 1.3538 dollars).
“Military and central banks news”
“This week is full of significant news for the markets, starting with a wave of major central bank meetings,” said Kevin Ford of Convera.
The speeches and projections of these institutions will be more closely monitored than rate decisions: the Bank of Japan (BoJ), the U.S. Federal Reserve (Fed), the European Central Bank (ECB), and the Bank of England (BoE) are all expected to maintain monetary status quo.
This may also be the last meeting of its kind with Jerome Powell at the helm of the Fed.
Donald Trump’s chosen successor, Kevin Warsh, is expected to have his nomination quickly confirmed thanks to the support of a Republican senator who had previously blocked the process due to a judicial inquiry, which was dropped on Friday.
Inflation indicators in the U.S. and the eurozone, to be published later this week, will also shed light on the impact of the Middle East conflict on prices.
“Currency exchange rates”
– EUR/USD: 1.1723 (Monday 18:15 GMT) / 1.1722 (Friday 22:00 GMT) – EUR/JPY: 186.89 / 186.86 – EUR/CHF: 0.9209 / 0.9200 – EUR/GBP: 0.8659 / 0.8661 – USD/JPY: 159.42 / 159.38 – USD/CHF: 0.7855 / 0.7850 – GBP/USD: 1.3538 / 1.3532
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