Dollar rally pauses as market sentiment turns a little more upbeat

The dollar halted its blistering rally on Thursday, providing some reprieve to the battered euro, as investors clung on to fragile assumptions that the war in the Middle East might not last as long as initially expected.

Traders latched on to hopes for a resumption of oil shipments through the Strait of Hormuz after insurance broker Marsh on Wednesday said it met with US officials to explore restoring maritime trade.

The dollar further eased from an over three-month high hit earlier this week and stood at 98.82 against a basket of currencies.

The was steady at $1.1628, having slid to a more than three-month low on Tuesday, while sterling was little changed at $1.3368.

“I wouldn’t say it was particularly good news, because Iran came out and kind of dismissed the report, and it is still clearly uncertain how long the war would drag on and the impact of it, but markets have certainly taken a relatively sanguine view,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia.

She added that sentiment was also helped by upbeat US economic data released on Wednesday, which showed that services sector activity surged to an over three-year high in February.

Still, the dollar held to its gain of over 1 per cent for the week thus........

© Dawn Business