15.04.202601:45:53UTC+00Dollar Pressured by US-Iran Optimism

The dollar index hovered around 98 on Wednesday, trading near six-week lows as renewed hopes for a diplomatic resolution to the Middle East conflict weakened safe-haven demand for the greenback. The decline has nearly erased all the gains accumulated since the onset of the Iran war.

The United States and Iran are reportedly preparing for a second round of peace negotiations before the current two-week ceasefire expires, even as heightened tensions in the Strait of Hormuz continue to amplify global energy supply risks. In response, oil prices have retreated sharply, easing worries about inflation and the prospect of further interest rate hikes by major central banks.

Against this backdrop, the Federal Reserve is now widely expected to leave interest rates unchanged for the remainder of the year. Chicago Fed President Austan Goolsbee has indicated that any move toward rate cuts could be postponed until 2027, depending on how long oil prices remain elevated.

Looking ahead, market attention will turn to a series of upcoming US data releases, including the import and export price indexes, the NY Empire State Manufacturing Index, and the NAHB Housing Market Index.