Dollar Hits One-Year High as US-Iran Peace Deal Uncertainty Boosts Safe-Haven Demand
By Aboki Forex —
The U.S. dollar strengthened in Asian trading on Friday, hitting a one-year high. Uncertainty around the US-Iran peace agreement pushed investors toward the safe-haven currency and kept pressure on the Japanese yen.
The dollar's gains came as traders weighed developments on the fragile deal between Washington and Tehran. Speculation grew that Japanese authorities may need to step in again to support their weakening currency.
The Japanese yen initially firmed but later gave up those gains, trading virtually unchanged. It remains near its weakest level in two years against the dollar. The wide gap between U.S. and Japanese interest rates, along with steady demand for higher-yielding assets, continues to weigh on the yen.
Trading was subdued due to public holidays in several Asian markets including China, Hong Kong and Taiwan. An upcoming U.S. holiday also thinned liquidity.
The dollar index, which measures the greenback against six major currencies, rose to its highest level in a year. The move followed reports that U.S. Vice President cancelled a planned trip to Switzerland where he was expected to meet Iranian negotiators. Those talks were meant to begin implementing the peace agreement. The cancellation raised questions about the pace and complexity of the next phase of negotiations.