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US Dollar slides as Israel-Iran ceasefire overshadows hawkish Powell's tone
Tuesday, 24 June 2025 23:31 WIB | US DOLLAR |DOLLAR

The US Dollar Index (DXY) is trading lower on Tuesday following news of a ceasefire agreement between Israel and Iran, which has alleviated demand for the US Dollar (USD). At the time of writing, the DXY is trading near 97.65, just above the June low of 97.61.

The Federal Reserve (Fed) Chair Jerome Powell delivered hawkish remarks at his testimony to Congress, stating that the Fed "is not in a hurry to cut rates".

Although he reaffirmed his data-dependent stance, reducing expectations of a July rate cut, markets remained focused on easing geopolitical tensions.

Market attention quickly shifted toward the ceasefire between Israel and Iran, which spurred a risk-on sentiment and overshadowed concerns about monetary policy.

After an initial attempt to retest the 100.00 level on Monday, the US Dollar Index, which tracks the USD against six other currencies, reversed course as a combination of mixed interest rate signals and geopolitical relief shifted the tone.

US President Donald Trump's announcement of a ceasefire between Israel and Iran spurred optimism on Monday evening, but both sides launched limited retaliatory strikes in the hours that followed.

Despite this, markets interpreted the situation as broadly contained, and safe-haven flows began to unwind. On Tuesday, the ceasefire was confirmed, placing further pressure on the US Dollar Index.

The shift in focus toward risk assets has reduced short-term demand for the Greenback, at least while geopolitical stability holds.

Source: Fxstreet

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