Forex News: U.S. Dollar Slips Despite Hawkish Fed Minutes, Fresh

U.S. Dollar Slips Despite Hawkish Fed Minutes, Fresh U.S.-Iran Conflict

(RTTNews) - The U.S. Dollar value ticked lower as investors assessed the release of minutes from the latest U.S. Federal Reserve's meeting in the backdrop of renewed tensions in the Middle East due to new U.S. and Iran conflict while mild recovery in stock markets later today lowered the liquidity demand for dollar.

The U.S. Dollar Index, DXY, which measures the Greenback against a basket of other major currencies was last seen trading at 101.06, down by 0.12 (or 0.12%) today.

While against the Euro, the USD was trading at 1.141, down by 0.06%, against the GBP, the USD was trading at 1.339, down by 0.23%.

Against the USD, the Japanese Yen was trading at 162.573, down by 0.31%, the Swiss Franc was trading at 0.809, down by 0.11%; and the Canadian Dollar was trading at 1.417, up by 0.21%.

Against one unit of Australian Dollar, the USD was trading at 0.693, down by 0.01%.

Mortgage Bankers Association of America's Purchase Index in the United States decreased to 169.50 points in July 3 from 170.60 points in the previous week.

Last month, the U.S. Federal Open Market Committee voted unanimously to hold its benchmark funds rate in the range of 3.50% to 3.75% in its first gathering under Chairman Kevin Warsh's leadership.

The minutes revealed that upside risks to price stability remained elevated while downside risks to achieving maximum employment had moderated a bit. In summary, the minutes leaned more on the hawkish side.

Yesterday in the Middle East, unknown projectiles hit ships transiting across the Strait of Hormuz in three separate incidents. No casualties were reported.

Angered by these attacks which the U.S. considered as a violation of June 17 ceasefire agreement, U.S. forces carried out widespread attacks on Iran.

The U.S. also revoked its permission to Iran for its oil exports.

Iran conducted retaliatory strikes with Islamic Revolutionary Guards Corps claiming to have targeted around 80 U.S. bases in Kuwait and Bahrain.

U.S. President Donald Trump called the ceasefire with Iran as over and the negotiations with Iran as a waste of time.

Trump observed that U.S. may seek control of Iran's Kharg Island which is the principal terminal from where Iranian oil exports take place.

Admitting Iran could re-lay sea mines across the Strait of Hormuz Trump also asserted that U.S. forces may hit Iran very hard tonight, increasing concerns of war-threat.

Trump remarked that he did not expect a full-blown war, leaving the fate of negotiations uncertain.

Risk premium returned to crude oil prices with WTI crude oil for August month delivery last seen trading at $74.89, up by 4.45 (or 6.32%).

Worldwide, investors held back from risky assets.

Currently, investors are betting on a 30.50% chance of a quarter-basis-point interest rate-hike in the upcoming meeting of the U.S. Federal Reserve on July 28-29 while the bets on rates being held at the current level stand at 69.50%, according to the CME Group's FedWatch Tool.

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