EUR/USD holds modest gains on Tuesday as the latest Middle East developments fail to trigger a strong market reaction, while the US Dollar (USD) struggles to recover from last week’s sell-off sparked by the US Treasury’s decision to increase buybacks of longer-dated government…
curities. At the time of writing, the pair trades around 1.1671, below the three-month high of 1.1711 touched on Friday
Pakistan’s Interior Minister Mohsin Naqvi said he and Army Chief Asim Munir held a “very positive and productive meeting” with Iranian President Masoud Pezeshkian, adding that “significant progress” was made. Pakistan has been acting as a mediator between the United States and Iran. The diplomatic push comes after the US Treasury launched “Operation Economic Outcast” on Monday, a wider sanctions campaign aimed at cutting off financial support for the Iranian government.
The Greenback, meanwhile, struggles for traction as the Treasury’s buyback decision revives concerns about the US fiscal outlook and rising government debt, bringing the USD debasement trade back into focus. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 98.95 after briefly climbing above 99.00 earlier in the day. US labour data released on Tuesday showed that the ADP Employment Change four-week average rose to 11.75K from 9.5K previously.