The U.S. dollar index (DXY) fell 0.07% on Tuesday, driven down by improving peace negotiations between the U.S. and Iran, which reduced safe-haven demand. Crude oil prices declined by 2%, further lowering inflation expectations and potentially prompting the Federal Reserve to ease monetary policy. The Chicago Fed National Activity Index for April increased to a 13-month high of 0.14, surpassing expectations of -0.03.
In the Eurozone, comments from ECB officials indicated economic growth may be more negatively impacted by the energy shock from the Iran conflict than previously thought. The euro fell 0.13%, while market expectations for a 25 basis point rate hike at the ECB’s next meeting on June 11 stood at 91%.
In Japan, the dollar rose 0.26% against the yen as the country’s leading index was revised down to 114.0. The market is pricing a 73% chance of a 25 basis point BOJ rate hike in their upcoming meeting on June 16.
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