Dollar holds in tight range amid stalling geopolitical developments

22 April 2026

Market analysis on behalf of Bas Kooijman, CEO of DHF Capital.

Dollar Holds in Tight Range Amid Stalling Geopolitical Developments

The dollar traded in a narrow range on Wednesday, as caution dominated sentiment following recent geopolitical developments in the Middle East. The extension of the current ceasefire by President Donald Trump has reduced the risk of immediate escalation but left the broader outlook uncertain. The continued closure of the Strait of Hormuz keeps energy supply disruptions unresolved, which could continue to pose inflation and growth risks. Treasury yields could stabilize to some extent as hopes for a diplomatic resolution persist despite the uncertainty.

On the monetary policy front, a prolonged pause in interest rates is still expected, which could provide support for both yields and the dollar. At the same time, markets could remain cautious after Federal Reserve nominee Kevin Warsh’s hearing, as concerns about Fed independence could persist.

At the same time, recent economic data signaled economic resilience. Retail sales rose more than expected, while hiring activity continued to accelerate, pointing to sustained labor market strength. The resilience could limit the scope for interest rate cuts and could leave the dollar and yields well-supported.

 

Zaid Barem / ymm