Dollar Slides as Iran Hopes Boost Global Markets
The Japanese yen has stabilized after a historic intervention by Tokyo and Washington, while the dollar hovers near six-week lows against major peers due to renewed hopes for an end to the Iran war.
The yen strengthened on Wednesday, trading at 157.72 per dollar, after falling 0.4% on Tuesday. It had previously weakened significantly in recent weeks, reaching a 40-year low of around 164 just a week earlier.
U.S. Treasury Secretary Scott Bessent echoed former European Central Bank President Mario Draghi's pledge to support Japan's efforts to stabilize the yen, stating that the U.S. would 'do whatever it takes' to help. However, some analysts are skeptical about the effectiveness of intervention in the long run.
Market strategist Marc Chandler noted that investors are waiting for fundamental justification to challenge central bank resolve, with the jobs data on Friday expected to shape expectations for near-term Fed policy. Meanwhile, a lower oil price has prompted traders to attach a lower chance of the Federal Reserve raising interest rates in September, which has acted as a drag on the dollar.