Geopolitical Tensions Elevate Dollar Amid Financial Uncertainty

The dollar strengthened broadly as geopolitical risks unsettled markets. President Trump announced major Japanese investments in the U.S., impacting the yen. Meanwhile, the euro remained steady amid speculation on ECB President Christine Lagarde's term. Investors await further insights from the Federal Reserve's meeting minutes.

The dollar saw an uptick on Wednesday with geopolitical tensions keeping markets uneasy. President Donald Trump's announcement of substantial Japanese investments in the U.S. sent the yen sliding. Japan agreed to a $550 billion investment plan, partially to appease U.S. tariffs, beginning with immediate projects totalling $36 billion.

The euro remained stable after reports hinted that ECB President Christine Lagarde might leave office earlier than expected. Markets are now closely watching upcoming minutes from the Federal Reserve for guidance on forthcoming rate cuts. Investors anticipate key U.S. economic data for new trading cues.

Elsewhere, talks between the U.S. and Iran saw progress, tempering geopolitical anxieties, while the peace dialogue between Ukraine and Russia is under keen observation. The Reserve Bank of New Zealand held interest rates steady, triggering a dip in the kiwi dollar, while Australia and the UK faced currency fluctuations, influenced by domestic economic policies.

(With inputs from agencies.)