Dollar index pulls back to one-week low as risk sentiment improves

The dollar index fell to a one-week low as risk sentiment improved after President Trumps announced that a ceasefire has been agreed upon between Iran and Israel, reducing appeal for the safe haven currency. Moreover, Fed Governor Bowman and Chicago Fed President Goolsbee said they favored a Fed rate cut at next months FOMC meeting weighing on the greenback. Federal Reserve Vice Chair for Supervision Michelle Bowman said the time to cut interest rates is getting nearer as risks to the job market may be on the rise. Bowman said inflation appears to be on a sustained path back to 2% and she said she expects only minimal impact on inflation from trade policy. Meanwhile, Chicago Fed President Austan Goolsbee noted that the central bank should cut rates if the "dirt" from tariffs is out of the air.

 

The dollar index that measures the greenback against a basket of currencies is quoting at 97.74, down 0.27% on the day. Investors await Chair Powells semiannual testimonies and the US June Consumer Confidence report later today for fresh cues. Among basket currencies, EURUSD and GBPUSD are both up 0.25%, in tune with dollar slide and are quoting at $1.1669 and $1.3566 respectively.

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