Investor confidence in a potential US-Iran agreement weakens demand for the safe-haven USD, pushing the DXY index to 99.00.
The US Dollar Index (DXY) fell to 99.00 early Monday, retreating from last week’s 99.30 support level. Optimism over a possible US-Iran peace deal and the reopening of the Strait of Hormuz reduced demand for the safe-haven currency.
Comments from US President Donald Trump suggesting progress in negotiations boosted risk appetite, though he cautioned against rushing a deal. US Secretary of State Marco Rubio indicated a strong proposal is on the table to reopen Hormuz, reinforcing diplomatic efforts.
With US markets closed for Memorial Day, investors await Thursday’s Personal Consumption Expenditures (PCE) Price Index data. Recent economic resilience has increased expectations for Federal Reserve rate hikes, adding pressure on the USD.