The US dollar failed to attract buyers early Thursday even after fresh US-Iran escalation, as traders held off ahead of US economic data. The euro and pound both extended gains, with GBP/USD reaching a three-week high.
The US dollar struggled to find buyers early Thursday despite renewed escalation in the Middle East, as investors turned their focus to upcoming US data and central bank commentary. The US Dollar Index traded below the 101.00 level, leaving the euro and pound room to advance.
Markets shrug off Middle East escalation
Geopolitical risk sharpened after the US military said late Wednesday it had struck 90 targets along Iran's coastline. Iran's Revolutionary Guard reportedly responded by targeting US military bases in Kuwait and Bahrain.
Yet the reaction across markets stayed muted. Crude oil prices edged lower during the European session, and US stock index futures advanced between 0.2% and 0.7%, a sign investors were not rushing into traditional safe-haven assets.
Euro and pound extend gains
Renewed weakness in the greenback lifted the common currency, and EUR/USD climbed toward the 1.1450 level during the European session after ending Wednesday largely unchanged. The pair still held close to 1.1400 overall, as escalating tensions in the Strait of Hormuz offset the impact of a slightly weaker dollar.
The British pound kept its momentum too. GBP/USD traded above the 1.3400 mark, reaching its highest level in three weeks after closing higher on Wednesday.
Yen firms as the Bank of Japan holds its view
The Japanese yen gained as USD/JPY reversed lower and traded below 162.50, following a rise of around 0.3% in the previous session. Meanwhile, the Bank of Japan's latest quarterly regional report showed no changes to its assessment across all nine regions, with most regional economies still recovering moderately.
Source: Invezz
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