3 weeks ago
Forex

U.S. Dollar Flat Amid Scant Optimism for Fed Hike, Geopolitical Tensions

Investing.com - The greenback was mostly flat on Wednesday as conflict between India and Pakistan caused investors to pause,

Investing.com - The greenback was mostly flat on Wednesday as conflict between India and Pakistan caused investors to pause, while looking ahead to another appearance of Federal Reserve Chair Jerome Powell on the hill.

India and Pakistan, which are both nuclear-armed, said on Wednesday that they have launched airstrikes against each other as cross-border attacks began for the first time since the 1971 war.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, inched up 0.05% to 95.91 as of 10:01 AM ET (15:01 GMT) after falling 0.42% on Tuesday following comments from Powell.

Powell reiterated the central bank’s "patient" approach to monetary policy.

“The Committee can now evaluate the appropriate timing and approach for the end of balance sheet runoff,” Powell said in testimony prepared for delivery to the U.S. Senate Banking Committee on Tuesday.

The Fed has paused on its pace of rate hikes as it evaluates headwinds in the domestic economy and abroad, removing the words “gradual increases” in interest rates from its policy statement in January.

The dollar was up against the safe-haven yen, with USD/JPY rising 0.21% to 110.80.

Elsewhere, the pound rallied on Brexit optimism, with GBP/USD up 0.54% to 1.3321. The euro inched down with EUR/USD falling 0.04% to 1.1380.

In Australia, the AUD/USD slipped 0.6% to 0.7139 while NZD/USD decreased 0.5% to 0.6845.