Dollar Declines Amid U.S.-Iran Ceasefire Agreement
The dollar fell against major currencies following reports of a U.S.-Iran agreement to extend their ceasefire and lift shipping restrictions through the Strait of Hormuz. The euro and pound gained, and the yen remained stable near intervention-trigger levels, as the U.S. dollar index dropped 2%.
The dollar took a hit against other major currencies on Friday, poised for two weeks of losses amid reports of the U.S. and Iran extending a ceasefire and lifting shipping restrictions through the Strait of Hormuz. President Trump was set to finalize the decision.
Initially, the dollar rallied due to its safe-haven appeal amid the conflict outbreak and the U.S. economy's minimal exposure to energy-price inflation. Yet, as uncertainty about the war's direction grew, the dollar's gains reversed.
The euro and pound both made advances against the dollar, with experts citing a divergence in central bank narratives as key. The yen remained stable, nearing intervention levels, as U.S. inflation hit a three-year high, reinforcing projections of unchanged interest rates. Meanwhile, the Australian and New Zealand dollars showed strength.
(With inputs from agencies.)
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