The dollar closed the day above $3,900, showing strength during quotes and approaching prices seen yesterday. On Wednesday, the currency closed at $3,901.61, below the TRM of $3,938.11. A maximum of $3,927.95 and a minimum of $3,863 were recorded, with 3,085 transactions totaling $1,871 million. This comes amidst Fed officials, including Chairman Jerome Powell, refraining from providing guidance on rate cuts, stating that monetary policy should remain restrictive.
Powell mentioned that recent inflation data did not give authorities enough confidence to ease monetary policy soon. Investors are reducing bets on future rate cuts as the US economy’s path is different than anticipated by the Fed. Additionally, the risk of conflict in the Middle East increases the dollar’s attractiveness as a safe haven asset. Investors are cautious with US interest rates likely to stay high for longer, boosting the dollar and driving yields to five-month highs.
Crude oil prices have fallen this week due to geopolitical tensions, with markets awaiting Israel’s response to the Iranian attack over the weekend. Brent fell 0.6% to $89.51 a barrel, while WTI dropped 0.5% to $84.95. US crude oil inventories increased by 1.4 million barrels last week, and weak economic data in China, along with lower prospects for interest rate cuts, raise concerns about global demand.