Dollar bides time as markets brace for Ukraine summit

SINGAPORE – The US dollar held steady against its major peers on Tuesday as global markets awaited the outcome of a White House summit with European nations that could determine the next phase of the war in Ukraine. The dollar index rose 0.31% to 98.122 with geopolitical events taking centre stage, after US President Donald Trump told President Volodymyr Zelenskiy on Monday that the United States would help guarantee Ukraine’s security in any deal to end the war with Russia.

“At the moment, markets are cautious,” said Tina Teng, an independent market analyst in Auckland, as traders weighed the possible implications for the global energy markets.

“The US dollar is going stronger against other currencies and the risk-on sentiment is still leading markets at the moment,” she added, citing stock indexes at record highs.

The euro held steady at USD 1.1667, up 0.06% so far in Asia, shuffling along the midpoint of the trading range it has sat in for the past two weeks. Markets are seeking direction this week from the Federal Reserve’s annual symposium in Jackson Hole on the likely path of interest rates. Fed Chair Jerome Powell is due to speak on the economic outlook and the central bank’s policy framework.

Many investors are away for summer holidays in the northern hemisphere, while markets will be left with few catalysts amid a thin diary of data releases on Tuesday. Cryptocurrencies bucked the trend, with bitcoin falling 0.3% to notch a third straight day of declines after hitting a record high on Thursday. Ether sank 0.6%, extending losses for a second day after failing to breach a record high last week. Against the yen, the dollar was at 147.835 yen, unchanged from late US levels and nearing the top of the trading channel it has sat in all month.

Japanese stock markets advanced in early trading on Tuesday, with both the Nikkei 225 and the Topix at record levels. The Australian dollar fetched USD 0.6495, up 0.1% in early trade, after Westpac’s consumer sentiment data for August rose to a 3-1/2-year high. The kiwi tacked on 0.1% to USD 0.59245. Sterling traded at USD 1.351, up 0.1% so far on the day, after rebounding from the low end of its range recorded over the past week.

(Reporting by Gregor Stuart Hunter; Editing by Shri Navaratnam)