NEW YORK – The US dollar gained in late trading yesterday as many investors were concerned about the potential for escalation and protracted conflict in one of the most politically fraught regions of the world, reported Xinhua.
Risk sentiment was fragile as Israel said it had called up an unprecedented 300,000 reservists and requested residents in parts of the Gaza Strip to leave. In the latest signs, it could be planning a ground assault to defeat Hamas.
The dollar index, which measures the greenback against six major peers, rose 0.03% to 106.0778 in late trading.
As long as the conflict is contained between Israel and Hamas, “we can go back and focus on the economic fundamentals”, said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.
“I’m still not convinced that geopolitics is going to drive the markets.”
The European Central Bank’s policymaker Klaas Knot said earlier that fighting between Israel and Hamas could drive up inflation in the euro zone if other nations in the region get involved in the conflict, thereby sustaining a current spike in oil prices.
In late New York trading, the euro was down to US$1.0566 from US$1.0591 in the previous session, and the British pound was down to US$1.2236 from US$1.2244.
Trading in the US Treasury was closed for the Columbus Day and Indigenous Peoples Day holiday yesterday, but the US Federal Reserve can “proceed carefully” in deciding whether any further increases are warranted in its benchmark policy rate of interest, Fed vice-chair Philip Jefferson said, nodding to the recent rise in long-term US bond yields as one of the factors that have left the US central bank at a “sensitive” juncture in its management of monetary policy.
In late trading yesterday, the US dollar bought 148.4380 Japanese yen, another traditional safe-haven currency, lower than 149.3570 Japanese yen from the previous session. The US dollar fell to 0.9054 Swiss francs from 0.9094 Swiss francs, and it slid to 1.3586 Canadian dollars from 1.3655 Canadian dollars. The US dollar was up to 10.9607 Swedish krona from 10.9390 Swedish krona. – October 10, 2023