U.S. Dollar Ticks Lower As Investors Monitor Developments In Middle East

(RTTNews) - The U.S. Dollar value posted incremental losses on Friday as markets focused on the U.S. call to Iran for discussions to avert a planned intense attack by the U.S. on Iran after November mid-term elections. Iran has not responded until now.

Today, the U.S. Dollar Index DXY, which measures the Greenback against a basket of other major currencies, was last seen trading at 101.93, down by 0.10 (or 0.10%).

Data from the Institute for Supply Management today revealed that Chicago Purchasing Managers' Index decreased to 55.30 in October from 58.80 in September.

While against the Euro, the USD was trading at 1.116, up by 0.13%, against the GBP, the USD was trading at 1.339, down by 0.12%.

Against the USD, the Japanese Yen was trading at 157.577, up by 0.07%.

Today, the Bank of Japan announced keeping its short-term policy rate unchanged at 1.25% in an 8-1 vote, in line with market expectations. The decision followed two consecutive 25-basis-point hikes in June and September.

Against the USD, the Swiss Franc was trading at 0.824, down by 0.06%; and the Canadian Dollar was trading at 1.398, up by 0.07%.

Against one unit of Australian Dollar, the USD was trading at 0.703, down by 0.04%.

In the Middle East crisis, Iran's Islamic Revolutionary Guards Corps announced that four tankers struck sea mines planted by Iran.

U.S. Vice President JD Vance wrote to Iran's Secretary of the Supreme National Security Council Mohsen Rezaei, asking Iran to quickly return for peace talks.

Mediators from Qatar are once again pushing Iran with different proposals for a framework on negotiations between the U.S. and Iran after Iran rejected a proposal that Qatar submitted on Sunday.

Iran's unresponsiveness to Vance's call for discussions is adding to escalation concerns.

Yesterday, according to a Wall Street Journal's report, the Commander of United States Central Command Admiral Brad Cooper briefed U.S. President Donald Trump on the available military options on Iran.

Today, in an interview with Kansas City radio station, Trump stated that the war with Iran is going to get wrapped up soon. Trump also added that the U.S. needs a guarantee that Iran will never have a nuclear weapon. However, he did not mention how the war would end.

Efforts to bring Iran to the negotiating table are going on while both sides are preparing for exchange of attacks.

On Wednesday, according to the CME Group's FedWatch Tool, investors were betting on 82.60% odds of a 25-basis-point rate hike in December.

Yesterday, the bets declined to 76.40% and, today, the odds have dipped to 72.40%.

Though markets have not abandoned expectations of a rate hike in the near-term, economists are raising doubts on the quantum of tightening that the economy can absorb.

Yesterday in the U.S. equity market, Google's parent company Alphabet reported losses over $500 billion.

Today, artificial intelligence linked technology majors suffered losses after Amazon's quarterly report. Intel's income missed market estimates.

Concerns about the return on the massive investments by tech companies in AI infrastructure are adding pressure to tech stocks.

Economists are of the view that despite an elevation in inflation, if tech valuations are under pressure, any further tightening of monetary policy may not be sustainable. They are doubtful that Fed can maintain its hawkish stance after December.

Markets are left only with economic data releases as and when they come up in the absence of any forward guidance by Fed Chair Kevin Warsh.