Dollar Dips Amid U.S.-Iran Ceasefire Extension Agreement
The dollar declined against major currencies due to reports of a U.S.-Iran agreement to extend a ceasefire and lift shipping restrictions through the Strait of Hormuz. The euro and pound strengthened against the dollar, with the dollar index showing a weekly loss. Inflation concerns and yen interventions were noted.
The dollar weakened against key currencies on Friday, heading for a weekly downturn after reports of a U.S.-Iran agreement to extend their ceasefire and remove shipping restrictions through the crucial Strait of Hormuz.
U.S. President Donald Trump was expected to decide on the deal, poised to extend the peace for another 60 days, easing flows through the strategic waterway and enabling discussions on pressing issues like Iran's nuclear agenda. Initially buoyed by the conflict's outbreak, the dollar's appeal waned as war uncertainties clouded sentiment.
Meanwhile, the euro and pound climbed, reflecting shifting consensus amidst ongoing central bank narrative confusion. The dollar index dropped by 0.2%, hinting at further losses amid escalating U.S. inflation driven by energy costs linked to the Iran conflict. Japan confirmed significant yen interventions, and the Australian and New Zealand dollars saw upward movement.
(With inputs from agencies.)
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