The US dollar faced continued pressure on Wednesday, extending a three-week low from the previous session. The decline came as Treasury yields dipped, reducing the appeal of the greenback as a safe-haven asset. The Australian dollar, meanwhile, hovered near a three-week high against the US dollar, buoyed by hawkish remarks from Reserve Bank of Australia Deputy Governor Andrew Hauser. He noted that inflation outlook looked "materially worse," leaving uncertainty over whether the central bank would raise interest rates next month. The Aussie rose 0.1% to $0.7013, just below the previous day’s high of $0.7017.
The US Dollar Index, which measures the currency against six peers, remained steady at 101.78 after a 0.2% decline on Tuesday. Investors have favored the dollar amid market volatility driven by Middle East tensions and AI-driven market frenzy, partly due to the US’s energy independence. Crude oil prices eased overnight after touching a five-month high, as traders weighed geopolitical developments against continued attacks on Saudi infrastructure.
Wall Street posted strong gains as technology earnings season kicked off with SpaceX results. Economist Carol Kong of Commonwealth Bank of Australia noted that tech earnings could significantly impact the dollar’s performance. "With equity market sentiment and the growth outlook closely tied to the performance of the major tech firms, their earnings results can have a large bearing on the USD," she wrote. Despite mixed performance among traditional safe-haven assets this year, the dollar has been the clear standout, she added.
The dollar was little changed at 158.33 yen and steady at $1.1229 and $1.33735 against the euro and sterling, respectively. Traders remained cautious about the euro amid France’s anti-government protests and worsening fiscal situation. France plans to reinforce police with troops for upcoming protests, acknowledging failures in its response to recent violence. Central bank policy decisions from the US Federal Reserve, European Central Bank, and Bank of Japan are set for next week, with no rate changes expected.