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IPC Index — Mexico Market- US Dollar Index declines as safe-haven demand fades amid growing optimism over easing Middle East tensions.
- Trump said that the US may withdraw from the Iran conflict within two to three weeks.
- Fed’s Powell said long-term inflation expectations remain well anchored.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is extending its losses for the second successive day and hovering around 99.80 during the Asian hours on Wednesday.
The Greenback weakens amid fading safe-haven demand amid a moderation in Middle East tensions. US President Donald Trump stated on Tuesday that the United States (US) would be “leaving very soon” from the Iran war, noting that a withdrawal could take place within two to three weeks. The comments reinforce earlier remarks suggesting that US strategic objectives have largely been fulfilled, raising expectations of a relatively swift resolution to the conflict.
Iranian President Masoud Pezeshkian expressed a willingness to de-escalate regional tensions if specific guarantees are met. However, Foreign Minister Abbas Araghchi took a firmer stance, asserting that Tehran is not seeking a temporary ceasefire but rather a complete termination of the war. He stressed the need for binding assurances against future aggression as well as compensation for damages, highlighting lingering uncertainty around the conflict’s resolution.
Moreover, Federal Reserve (Fed) Chair Jerome Powell said earlier that long-term inflation expectations remain well anchored, easing concerns that higher energy prices will quickly lift inflation and reduce the urgency for policy action.
