Strong US dollar amid rising Middle East tensions

New York: The United States (US) dollar strengthened from an eight-month low in Monday’s trading (Tuesday WIB), as geopolitical tensions rose in the Middle East, prompting investors to seek safe havens.

Launch Yahoo FinanceOn Tuesday, August 27 2024, the US dollar index, a measure of the value of the dollar against six major currencies, rose 0.2 percent to 100.84, up from the lowest level since late December at 100.53.

The euro was down 0.3 percent against dollar to 1.1161 US dollars. Meanwhile, against the yen, the US dollar was steady to slightly stronger at 144.51. Earlier, the US dollar fell to a three-week low of 143.45.

Meanwhile, the euro weakened against the Japanese currency, falling 0.1 percent to 161.45 yen. Meanwhile the Swiss franc fell 0.7 percent to 169.97 yen.

The dollar slipped 0.1 percent against the Swiss franc to 0.8469 francs. The euro also fell 0.3 percent against the Swiss currency to 0.9454.

Meanwhile, the pound exchange rate fell 0.2 percent against the dollar to USD1.3192 after rising to USD1.3229 on Friday for the first time in 17 months.

Waiting for the Fed to cut interest rates

The movement of the US dollar was also affected by the expectation of a reduction in US interest rates next month, which was confirmed by the Chairman of the Federal Reserve Jerome Powell last Friday in a keynote speech. a hawk by Jackson Hole, Wyoming.

That prompted traders to hedge bets on a 25 basis point (bps) rate cut in September and even raise expectations of a cut. interest rate from 50 bps.

The head of the Bank of England, Andrew Bailey, said it was too early to announce an impact on inflation, pointing to a less aggressive stance on rate cuts compared to the Fed.