The dollar remained stable on Wednesday as investors awaited the Federal Reserve’s minutes for clues about potential rate cuts while geopolitical uncertainties kept markets on edge.
Following President Donald Trump’s announcement of the first tranche of massive investments Tokyo is making in the US and data indicating a recovery in Japanese manufacturer mood, the yen remained stable. Prior to a decision by the Reserve Bank of New Zealand, which is highly anticipated to maintain rates, the kiwi held gains.
In Geneva, Iran reported that nuclear discussions with the United States had advanced, and peace talks between Russia and Ukraine were still ongoing. Investor attention was still focused on the Fed’s readout of its most recent meeting and important US economic data that was due on Friday, since many Asian markets were closed for the Lunar New Year holidays.
In a note, Commonwealth Bank of Australia currency analyst Samara Hammoud stated, “Weaker risk sentiment, due of fears over increased geopolitical tensions in the Middle East and volatility in US equities markets, boosted the USD for a limited period of time.”
Those concerns were, however, calmed by reports that the United States and Iran made progress and reached a “general understanding” during nuclear talks in Switzerland.
Following a two-day increase, the dollar index, which compares the US dollar to a basket of other currencies, saw minimal movement at 97.11. At $1.1852, the euro remained stable.
The value of the yen increased by 0.1% to 153.12 USD. Following a 0.5% decline in the previous session, sterling maintained at $1.3563.
In a second round of indirect negotiations on their nuclear conflict, Iran and the US agreed on the key “guiding principles” on Tuesday, but Iranian Foreign Minister Abbas Araqchi stated that a deal is not yet imminent.
Trump urged Kyiv to move quickly to strike an agreement to end the four-year conflict as negotiators from Russia and Ukraine wrapped up the first of two days of US-mediated peace talks in Geneva.
The Commerce Department will release its first estimate of the US gross domestic product for the fourth quarter on Friday, while the Fed’s Open Market Committee will release the minutes of its January meeting later on Wednesday.
According to data, Japan’s exports increased for the fifth consecutive month in January, and the country’s manufacturers’ confidence improved for the first time in three months in February, according to the Reuters Tankan poll.
The International Monetary Fund advised Japan to refrain from further easing fiscal policy and to continue hiking interest rates. The Trump administration announced that Japan will fund three projects totaling $36 billion. This is the first of approximately $550 billion in projects Tokyo promised to undertake in return to reduce US tariffs.
The kiwi saw minimal change at $0.6047, while the Australian dollar remained stable at $0.7083. With rates largely predicted to remain unchanged, New Zealand’s first female central bank chief, Anna Breman, chairs her maiden meeting on Wednesday.
In terms of cryptocurrency, ether dropped 0.18% to $1,995.63, while bitcoin dipped 0.08% to $67,597.50.
