The US Dollar index hovered near multi-year lows on Wednesday, after two consecutive sessions of losses, as investor sentiment improved following the ceasefire between Israel and Iran.
While the truce appears to be holding, the limited damage to Iran’s nuclear facilities could leave some geopolitical uncertainty.
Still, safe-haven demand for the greenback has diminished.
Meanwhile, Federal Reserve Chair Jerome Powell reiterated the Fed’s cautious stance during his congressional testimony, indicating that interest rates are likely to remain unchanged until the inflationary impact of tariffs becomes clearer.
Despite his measured tone, markets continue to price in at least two more rate cuts this year. As a result, US Treasury yields continued to slide, with the 10-year note near 4.28%, ahead of Powell’s Senate testimony later today.
Looking ahead, traders will monitor not only Powell’s comments but also key macro data, including durable goods, GDP, and core PCE, which could offer further clues on the Fed’s next steps and shape the dollar’s direction.
