Shafaq News

The dollar found its footing in Asian trade on Friday, retracing some of the previous day's decline as traders questioned reports that a ceasefire deal in the Middle ​East could be imminent.

Against Japan's currency, the U.S. dollar was up 0.2% at 160.235 yen. The ‌Australian dollar was down 0.1% at $0.7045, while its kiwi counterpart was 0.2% weaker at $0.5824.

The euro last bought $1.1574, holding near its strongest in a week after the European Central Bank's first interest rate hike in three years on Thursday. The British pound was flat at $1.3415.

"There's a question ​around the hopes of a deal, and questions around whether it will be met and agreed upon by ​Iran and the U.S.," said Michael Wan, senior currency analyst at Mitsubishi UFJ Financial Group ⁠in Singapore. "It sounds like it's quite close, but they're not exactly at the finish line."

Brent crude slid 1.8% to $88.76 ​a barrel in Asian trade, after President Donald Trump said the United States and Iran could sign a peace deal ​as soon as this weekend that would reopen the Strait of Hormuz to shipping. Iran countered that it had not reached a final decision on an agreement.

The U.S. dollar index, which measures the greenback's strength against a basket of six currencies, was steady at 99.743, stabilising ​after slumping to its weakest level in a week on Thursday.

Data that day showed U.S. producer prices increased more than ​expected in May, leading to the largest annual gain in 3-1/2 years as the Middle East conflict drove up the cost of ‌energy products.

But ⁠traders found encouragement in the details of the report.

"The more important core PPI reading, which typically feeds directly into core PCE inflation, came in at 4.9% year-on-year, well below the 5.4% expected," said Tony Sycamore, market analyst at IG in Sydney, referring to the Federal Reserve's preferred gauge of cost-of-living increases. "This, combined with the fall in energy prices, helped ​calm inflationary concerns."

Expectations for the ​timing of the Fed's next ⁠rate hike shifted back to December after the report. Fed funds futures now price in an implied 63.3% probability the U.S. central bank will keep rates on hold at ​its two-day meeting ending October 28, compared with an even chance a day earlier, according ​to the ⁠CME Group's FedWatch tool.

The European Central Bank is now widely expected to lift interest rates again in September, according to LSEG data.

"The ECB delivered its first 25-basis-points hike since September 2023, with inflation and growth revisions hawkish at the margin," analysts from ⁠Barclays wrote ​in a research note. "That said, it offered little guidance on if ​and when it will follow with more, though risks seemed skewed towards further action, barring a quick improvement in the inflation outlook."

In cryptocurrencies, bitcoin was ​up 0.5% at $63,645.84, while ether edged 0.4% higher to $1,676.83.

(REUTERS)

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