Synopsis
Global markets remained cautious on Wednesday as geopolitical tensions simmered, with investors eagerly awaiting minutes from the U.S. Federal Reserve for clues on interest rates. The yen stabilized following positive manufacturing data and the announcement of significant Japanese investments in the United States. At the same time, progress was reported in nuclear negotiations between Iran and the United States, and peace negotiations between Ukraine and Russia continued.
AgenciesThe dollar remained stable as geopolitical tensions and anticipation of Federal Reserve minutes made markets cautious.The dollar held firm on Wednesday as geopolitical risks kept markets on edge and investors waited for the minutes to come. Federal Reserve for signals on future rate cuts.
The yen held steady after data showing a rebound in confidence among Japanese manufacturers and President Donald Trump announced the first tranche of mega-investments Tokyo is making in the United States. The kiwi retained its gains before a decision by the Reserve Bank of New Zealandwhich should largely maintain rates.
Iran said “progress has been made” in nuclear negotiations with the United States in Geneva, while peace negotiations between Ukraine and Russia continued. As many markets in Asia remain closed for the Lunar New Year holiday, investors remain focused on the release of the latest Fed meeting and key US economic data due on Friday.
“Lower risk sentiment, driven by concerns over renewed geopolitical tensions in the Middle East and volatility in U.S. stock markets, briefly supported the dollar,” said Samara Hammoud, currency strategist at Commonwealth Bank of Australiawrote in a note. “However, reports that the United States and Iran have made progress and reached a ‘general agreement’ during nuclear negotiations in Switzerland have helped to allay these concerns.”
The dollar index, which measures the greenback against a basket of currencies, was little changed at 97.11 after a two-day advance. The euro remained stable at $1.1852.
The yen strengthened 0.1% to 153.12 per dollar. The British pound held steady at $1.3563, following a 0.5% decline in the previous session.
Iran and the United States reached agreement on key “guiding principles” on Tuesday in a second round of indirect talks over their nuclear dispute, although a deal is not imminent, Iranian Foreign Minister Abbas Araqchi said.
Elsewhere in Geneva, Ukrainian and Russian negotiators concluded the first of two days of U.S.-led negotiations. peace talks in Geneva, with Trump pressing kyiv to act quickly to reach a deal ending the four-year conflict.
The opening of the Fed Market Committee releases minutes from its January meeting later Wednesday, while the Commerce Department will release its first estimate of U.S. gross domestic product for the fourth quarter on Friday.
In Japan, data showed exports rose for a fifth straight month in January, while the Reuters Tankan poll showed confidence among the country’s manufacturers improved in February for the first time in three months.
The International Monetary Fund has urged Japan to continue raising interest rates and avoid further easing fiscal policy. The Trump administration announced three projects worth $36 billion to be financed by Japan, the first of approximately $550 billion in projects that Tokyo has agreed to undertake in order to reduce U.S. tariffs.
The Australian dollar was steady at $0.7083, while the kiwi was little changed at $0.6047. Anna Breman, the first woman to head New Zealand’s central bank, chairs her first meeting on Wednesday, with rates expected to remain unchanged.
In cryptocurrencies, bitcoin fell 0.08% to $67,597.50, while ether fell 0.18% to $1,995.63.
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