Dollar Holds Near Weekly Highs as Safe-Haven Demand Strengthens
The U.S. dollar remained close to one-week highs during Asian trading on Wednesday, supported by increased safe-haven demand. Investor skepticism surrounding U.S. President Donald Trump’s decision to indefinitely extend the ceasefire with Iran helped strengthen the greenback.
Fed Signals and Strong Data Boost Dollar Sentiment
Additional support for the dollar came from comments by Federal Reserve Chair nominee Kevin Warsh during his Senate confirmation hearing. His remarks were interpreted as slightly hawkish, reinforcing expectations of a cautious monetary policy stance.
At the same time, stronger-than-expected U.S. retail sales data provided further optimism about the resilience of the American economy, adding to the dollar’s upward momentum.
Dollar Index Eases After Recent Gains
The U.S. dollar index, which tracks the currency against a basket of six major peers, edged down to 98.367 after earlier approaching its highest level since April 13.
Analysts noted that while the ceasefire was extended, ongoing measures such as the U.S. blockade on Iranian ports continue to create uncertainty. This leaves the timeline for normalizing energy exports through the Strait of Hormuz unclear, maintaining volatility in global markets.
Major Currencies Trade in Narrow Ranges
Most major currencies showed limited movement following the ceasefire extension. The euro held steady at $1.1742, while the British pound remained unchanged at $1.3511.
The Australian dollar rose slightly by 0.1% to $0.7157, and the New Zealand dollar gained 0.2% to $0.5907. Against the Japanese yen, the dollar traded flat at 159.35 yen, despite data showing Japan’s exports continued to grow for a seventh consecutive month.
Iran Uncertainty Remains a Key Market Risk
Market participants remain cautious due to internal divisions within Iran, particularly between hardline factions and more moderate political groups. Analysts suggest this internal struggle could delay any meaningful progress toward a lasting agreement.
Ongoing uncertainty around the geopolitical situation continues to influence global risk sentiment and currency markets.
Strong Retail Sales Add to Economic Optimism
U.S. retail sales rose by 1.7% in March, exceeding expectations of a 1.4% increase. Higher gasoline prices driven by the Iran conflict contributed to a surge in service station receipts, while tax refunds supported broader consumer spending.
Federal Reserve Outlook Remains in Focus
Warsh emphasized that he had not committed to cutting interest rates and reiterated the importance of maintaining the Federal Reserve’s independence from political influence.
Despite his remarks, market pricing suggests that expectations for rate cuts remain subdued. Traders are increasingly pushing back the timeline for any potential easing, with some forecasts indicating that interest rates could remain unchanged well into 2027.
Crypto Markets Move Higher
In cryptocurrency markets, bitcoin rose by 2.5% to $77,610.10, while ether gained 2.4% to $2,373.76, reflecting continued investor interest in digital assets amid broader market uncertainty.
