Forex News: U.S. Dollar Ends Roughly Flat Amid Stalemate In

U.S. Dollar Ends Roughly Flat Amid Stalemate In U.S.-Iran Talks, PPI Data Release

(RTTNews) - The U.S. Dollar value ticked higher as investors assessed the softer producer price index numbers which eased concerns of an immediate rate hike in the U.S. while the efforts to break the deadlock in the U.S. and Iran negotiations over reopening of the Strait of Hormuz showed no sign of progress.

Today, the U.S. Dollar Index DXY which measures the Greenback against a basket of other major currencies was last seen trading at 99.96, up by 0.02 (0.02%).

While against the Euro, the USD was trading at 1.153, down by 0.07%, against the GBP, the USD was trading at 1.349, up by 0.06%.

Against the USD, the Japanese Yen was trading at 159.500, down by 0.06%, the Swiss Franc was trading at 0.814, down by 0.14%; and the Canadian Dollar was trading at 1.393, up by 0.05%.

Against one unit of Australian Dollar, the USD was trading at 0.706, up by 0.03%.

The conflict between the U.S. and Iran is now in its sixth month.

While intermediaries are working hard to bring the U.S. and Iran to negotiating table, after taking a tough stance both sides show no sign of a climbdown.

Yesterday, U.S. President Donald Trump asserted that the U.S. has total control over the Strait of Hormuz. Claiming the success of the U.S. naval blockade (which he termed as a "wall of steel") over Iranian ports, Trump mocked that Iran has no money to pay even its soldiers and economically decimated.

Denying Trump's claims on the U.S. authority over the Strait of Hormuz strongly, Iran's Persian Gulf Strait Authority announced that the seaway remains blocked and will continue to be so until Iran's conditions are accepted.

Iran's Foreign Minister Abbas Araghchi remarked that the U.S. risks a bigger miscalculation over the Strait of Hormuz.

Following the heightening tensions, experts are concerned that the gap between the U.S. and Iran could widen more, leading to the closure of Strait of Hormuz for an extended period of time.

Available public data shows that the shipping traffic across the Strait of Hormuz is way down.

Yesterday, the Organization of Petroleum Exporting Countries and the International Energy Agency separately released their outlook for crude oil demand growth. Both groups considerably lowered their earlier outlook for this year. As a result, crude oil prices sharply declined.

On the economic front, data released by the U.S. Bureau of Labor Statistics showed that on a month-on-month basis, the producer prices were unchanged in July, following a revised 0.10% fall in June and compared with market expectations of a 0.20% gain.

On a year-on-year basis, it increased 4.70% in July, the lowest since March, after a 5.50% increase in June, below expectations for a 4.90% increase.

Core producer prices (which exclude food and energy goods), increased 0.20% from the previous month in July.

On a year-on-year basis, it jumped by 4.20% from the previous year in July, in line with market expectations.

Data from the U.S. Department of Labor showed that the claims for unemployment benefits increased by 9,000 to 209,000 on the first week of August, above market expectations of 202,000.

Continuing jobless claims decreased to 1,777,000 for the week ending August 1 from 1,799,000 in the previous week.

As a result, market consensus points to a "no-increase" scenario in the U.S. interest rates in the near-term.

Currently, investors are betting on a 34.40% chance of a 25-basis-point interest rate-hike in the upcoming meeting of the U.S. Federal Reserve on September 15-16 while the odds on rates being held at the current level stand at 65.60%, according to the CME Group's FedWatch Tool.

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