Diplomatic optimism over a potential Strait of Hormuz agreement pushed Brent crude below $99, pressuring the dollar in thin holiday trading.
The U.S. dollar declined against major currencies as optimism over a possible deal to reopen the Strait of Hormuz sent oil prices lower. Brent crude fell 4.5% to $98.9 a barrel, while West Texas Intermediate dropped to $88.98, easing inflation concerns.
Trading volumes were subdued due to market closures in the U.S., UK, Hong Kong, and much of Europe. The dollar index slipped 0.2% to 99.059, with the euro up 0.31% to $1.11639 and the pound rising 0.42% to $1.34865.
U.S. and Iranian officials tempered expectations, with neither side confirming an imminent agreement. The dollar’s retreat reflected broader risk sentiment amid thin liquidity.