Dollar cements gains after scaling 2018 peak; euro struggles

LONDON - 8 May 2018: The dollar consolidated gains on Tuesday after scaling a 2018 peak in the previous session as investors focused their attention on U.S. President Donald Trump’s decision about the future of an international nuclear agreement with Iran.

Trump is expected to make an announcement on the nuclear deal at 1800 GMT. A U.S. withdrawal from the deal, which eased economic sanctions in exchange for Tehran limiting its nuclear programme, would impact risk sentiment in the broader markets.

“It is an event risk and has the potential to make risk sentiment which is already cautious more unstable,” said Manuel Oliveri, a currency strategist at Credit Agricole in London.

While global attention has been focused on the recent rally in the dollar — the greenback has rallied around 4 percent in the last three weeks — the Japanese yen has held its own against its higher yielding rivals such as the Australian dollar and the Canadian dollar.

On Tuesday, the dollar was broadly steady after rising above 92.97 on Monday as markets further unwound short bets against the greenback built up in recent months pushing the dollar up for three consecutive weeks.