The US Dollar edged slightly higher against major currencies on Tuesday as investors digested the results of a White House summit with European leaders, which may shape the next stage of the conflict in Ukraine.
The Dollar index increased 0.1% to 98.192 following US President Donald Trump’s Monday discussion with Ukrainian President Volodymyr Zelenskiy, in which Trump pledged that the United States would help secure Ukraine’s safety as part of any potential agreement to end the war with Russia.
“At the moment, markets are cautious,” stated Tina Teng, an independent market analyst in Auckland. “The US Dollar is going stronger against other currencies and the risk-on sentiment is still leading markets at the moment,” she added, in reference to stock indexes at record highs.
Markets are also turning their attention this week to the Federal Reserve’s annual symposium in Jackson Hole, where investors hope to gain insight into the likely trajectory of interest rates.
Fed Chair Jerome Powell is scheduled to speak on the economic outlook and the central bank’s policy framework.
Meanwhile, with many investors on summer holidays in the northern hemisphere, trading activity is expected to remain subdued, as the week’s data calendar is thin and offers few fresh catalysts, Reuters reports.
The Euro remained largely unchanged at $1.1656, slipping just 0.04% in early Asian trading, and continuing to trade near the midpoint of the two-week range it has maintained.
“The Dollar is the safe haven of choice when geopolitical risks are increasing,” according to Bart Wakabayashi, Tokyo branch manager at State Street.
He added that if a deal on Ukraine were reached in which European nations assume a larger share of the responsibilities, it could trigger a relief rally, potentially prompting capital outflows from the Euro and the British Pound.
Against the Yen, the Dollar slipped 0.1% to 147.770, remaining confined within the trading range it has occupied throughout the month. The movement followed an auction of long-dated Japanese government bonds, which saw weaker demand than in July. Yields on the 20-year bonds rose 1.5 basis points to 2.59% after the sale.
Elsewhere, the Australian Dollar dipped to $0.6489, easing back after Westpac’s August consumer sentiment survey hit a 3½-year high; the New Zealand Dollar trimmed earlier gains, holding steady at $0.59245; and Sterling retreated to $1.3501, slipping toward the lower end of its range over the past week after earlier signs of strength.