Dollar strengthens amid Pelosi's visit to Taiwan

At the beginning of Wednesday's trading, the US dollar is showing growth in pairs with major world currencies against the backdrop of escalating geopolitical tensions around the United States and China. Yesterday, the world community closely monitored the movement of the special board of the Speaker of the US House of Representatives Nancy Pelosi, who was heading to Taiwan.

As you know, China opposes any US interference in the affairs of China and Taiwan, and Pelosi's presence on the island threatens to further destabilize Sino-American relations. Against the background of Pelosi's arrival, the dollar received some support due to an increase in appetite for safe assets.

Additional support for the US currency is provided by the decision of the US Federal Reserve System to further raise interest rates in the future. Moreover, data on the number of vacancies in the United States in June were published yesterday – it fell more sharply than expected to the lowest level since September. Analysts note that such statistics are a pessimistic precursor to Friday's Non-Farm Payrolls report. 

However, signs of cooling in the US labor market have not yet affected the Fed's willingness to ease the sharp tightening of monetary policy. Yesterday, several officials of the regulator said that the rate hike would not weaken, even though it could significantly limit economic activity.

As a result, the dollar index, which tracks its exchange rate against a basket of 6 other currencies, rose to 106.403 after falling to an almost one-month low at 105.03.