The US dollar has fallen from an 18-month high on currency markets. This comes after North Sea Brent crude prices fell and investors re-evaluated the stock market rally driven by the development of artificial intelligence (AI), Reuters reported.
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Dollar Index in the Red: Markets Await Global Developments
Yesterday around 18:00, the dollar index, which measures the dollar’s value against a basket of six major world currencies, showed a 0.36 percent decline to 102.224 points. Against the Japanese yen, the dollar weakened by 0.13 percent to 158.359 JPY. The euro gained 0.35 percent against the dollar to 1.1193 USD. Markets expect US President Donald Trump to avoid an escalation of tensions in the Middle East, as a broader conflict could harm his position ahead of the US Congressional elections, which are taking place next month.
The dollar fell from an 18-month high following a drop in Brent crude prices — Trump stated last week that the US would not attack Iran before the elections. On Sunday, he also unilaterally declared an energy ceasefire between Russia and Ukraine. Ukrainian President Volodymyr Zelenskyy stated that he learned about the ceasefire from the media. For the second day, Ukraine is not attacking Russian refineries, although Russian strikes on Ukraine’s energy infrastructure continue, the Ukrainian leader added.
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Doubts Surrounding AI and the Threat of Technical Correction
“The dollar is slightly weaker due to a moderate decline in oil prices. The earnings results from major banks released this morning were mixed and did not provide a very clear view of overall stock market developments,” said John Velis, market strategist at BNY. “Given that bond yields have slightly retreated from recent highs, it appears the dollar will trade somewhat lower today,” he added.
Some analysts suggest that, alongside energy, the dollar’s recent strengthening is also encountering growing doubts about the investment narrative associated with AI. “In our view, the ‘US exceptionalism’ bet has once again reached excessive valuations and is exposed to the risk of a technical correction,” said Karl Schamotta, market strategist at Corpay.
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Source: ČTK
