Market News

By Johann M Cherian and Laura Matthews

Summary

• Dollar trades in softer range, but set for weekly rise
• Fears of US involvement in Middle East conflict spark dollar demand
• Iran rejects nuclear discussions while under fire
• Oil prices, war and tariffs cloud central banks' policy outlooks
• China keeps benchmark rates unchanged as expected in June

June 20 (Reuters) - The dollar weakened against the euro and the pound on Friday, but was set for its biggest weekly rise in more than a month as uncertainty about a raging war in the Middle East and the potential repercussions for the global economy fuelled an appetite for traditional safe havens.

Israel and Iran have been waging a week-long air battle as the Israeli government seeks to thwart Tehran's nuclear ambitions, and market participants are nervous about possible U.S. attacks on Iran, sparking a surge in the greenback.

The dollar index, which measures the U.S. currency against six peers, including the Swiss franc, the Japanese yen, and the euro, is poised to rise 0.6% this week.

Iran said on Friday it would not discuss the future of its nuclear programme while under attack by Israel, as Europe tried to coax Tehran back into negotiations.
Meanwhile, the White House said on Thursday that President Donald Trump would decide on the potential involvement of the United States in the conflict in the next two weeks.
That helped soothe nervous investors worried about an imminent U.S. attack on Iran, even though the prospect of a broadening Middle East conflict kept risk appetite in check.