Silver trapped mid-range at $76.715 with ADX at 10.6 - hourly levels updated
Investing.com-- The dollar firmed on Tuesday after fresh U.S. military action against Iran raised questions over recent progress towards a peace deal between the two countries.
Strength in the greenback pressured broader currency markets, with the euro and the pound retreating slightly after logging a positive start to the week.
The Japanese yen softened slightly, as did the Chinese yuan and the Australian dollar.
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Dollar gains after US attacks targets in southern Iran
The dollar index and dollar index futures rose 0.1% apiece on Tuesday, recouping a small measure of recent declines.
The greenback was aided chiefly by renewed doubts over a U.S.-Iran peace deal, after reports showed Washington attacked targets in Southern Iran on Monday.
The strikes came even as U.S. officials touted progress in peace negotiations with Iran. Reports over the weekend showed the two nearing a framework deal the reopen the Strait of Hormuz and extend a ceasefire.
Iranian officials warned on Tuesday that any attacks against the country’s military will draw retaliation.
Speaking after the attacks, U.S. Secretary of State Marco Rubio warned said an Iran deal was likely to "take some days,"
Oil prices surged after Monday’s attacks, recouping some recent losses and keeping markets on edge over the inflationary impact of the war. This notion supported the dollar.
Shortly before Monday’s attacks, U.S. President Donald Trump had signaled that talks with Iran were going well, and that the country will hand over its enriched uranium holdings. But the status of negotiations now appeared uncertain after Monday’s strikes.
Japanese yen steady after strong inflation reading
The Japanese yen’s USD/JPY pair was flat on Tuesday. Bank of Japan Deputy Governor Ryozo Himino said the central bank will consider adjusting policy based on developments in the Middle East, amid growing conviction that the BOJ will raise rates next month.
Separately, BOJ core consumer price index data read stronger than expected and well above the central bank’s 2% annual target, furthering bets that the central bank will act soon to curb rising inflation.
Other currencies were broadly pressured by a rebound in oil prices. The Australian dollar’s AUD/USD– which is widely viewed as a barometer for risk appetite– fell nearly 0.2%.
Chinese yuan’s USD/CNY pair rose slightly, as did the Singapore dollar’s USD/SGD. The Indian rupee’s USD/INR rose 0.3% after falling sharply from record highs in the past two sessions.
The South Korean won’s USD/KRW pair was an outlier, falling 0.4% as the won took support from a rally in local stock markets.