Market News

By Gregor Stuart Hunter

SINGAPORE, June 19 (Reuters) — The U.S. dollar strengthened in Asian trading on Friday, reaching a one-year high as uncertainty surrounding the implementation of the U.S.–Iran peace agreement supported demand for the safe-haven currency and kept pressure on the Japanese yen.

The dollar's gains came as investors assessed developments surrounding the fragile agreement between Washington and Tehran, while speculation grew that Japanese authorities may need to take further action to support their weakening currency.

Yen Remains Under Pressure

The Japanese yen initially strengthened but later surrendered those gains, trading virtually unchanged at 161.455 per dollar.

The currency remains close to its weakest level in two years against the U.S. dollar, reflecting the widening gap between U.S. and Japanese interest rates and ongoing demand for higher-yielding assets.

Trading activity was relatively subdued due to public holidays across several Asian markets, including China, Hong Kong and Taiwan, while an upcoming holiday in the United States also contributed to thinner market liquidity.

Dollar Index Reaches One-Year High

The U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose 0.3% to 101.07, its highest level in a year.

The move followed reports that U.S. Vice President JD Vance had cancelled a planned trip to Switzerland, where he was expected to meet Iranian negotiators.

The talks were intended to begin work on implementing the 14-point agreement reached between Washington and Tehran to end their conflict.

The cancellation raised questions about the pace and complexity of the next phase of negotiations, prompting investors to seek the relative safety of the dollar.

Markets Watching Iran Talks Closely

Analysts said markets remain focused on how the agreement will be implemented and whether future negotiations can address remaining areas of disagreement.

"Markets will be watching closely to see how implementation and the tougher follow-up negotiations develop in the coming days," analysts at Danske Bank said in a research note.

Any signs of delays or renewed tensions could influence energy markets, global risk sentiment and currency movements.

Sterling Edges Lower

The British pound fell 0.2% to $1.3174, broadly in line with weakness seen across most major currencies against the stronger dollar.

Political developments in the United Kingdom had little immediate impact on the currency. Greater Manchester Mayor Andy Burnham secured victory in a by-election in Makerfield, strengthening speculation that he could eventually challenge Prime Minister Keir Starmer for the leadership of the ruling Labour Party.