Precise Investors Editorial Team
Most other major currencies also extended gains as dollar weakness persisted
The dollar dropped against most major currencies on Wednesday after the U.S. signalled it may be nearing a deal with Iran, while the yen strengthened sharply to a more than two-month high as markets braced for another intervention.
The yen was last at 155.00, up nearly 2% to its strongest level since February 24. It had lagged broader dollar weakness earlier in the session before a sudden move higher, triggering speculation of another round of intervention.
Japanese Finance Minister Satsuki Katayama earlier in the week warned against speculative moves in foreign exchange, after a brief jolt higher in the yen sparked speculation Tokyo had again intervened to support the currency.
As I have said repeatedly, we will take decisive measures against speculative moves, in accordance with the statement signed between Japan and the United States last year, Katayama told reporters after the Asian Development Bank’s annual meeting in Uzbekistan.
Most other major currencies also extended gains as dollar weakness persisted, after U.S. president said he would briefly pause an operation to help escort ships through the Strait of Hormuz, citing progress toward a comprehensive agreement with Iran.
The euro was up 0.4% at $1.1735, while sterling also rose 0.4% at $1.3598.
U.S. oil futures declined on Wednesday, with U.S. West Texas Intermediate dropping to around $100 per barrel.
The signals sent from the United States appear to offer reassurance that it’s not interested in renewing hostilities, said Kyle Rodda, senior analyst at Capital.com.
However, this isn’t all good news with oil still trapped and the Strait still closed, he added. That suggests upward pressure on oil will persist, which could cause a headache for the markets once again down the line.
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