By Ankur Banerjee and Harry Robertson SINGAPORE/LONDON, May 26 The dollar steadied on Tuesday as investor hopes of an imminent deal to reopen the crucial Strait of Hormuz and end the Iran war were dented by fresh U.S. attacks on Iranian targets and comments that reaching an…
reement may take some time. The prospect of a peace deal had pushed oil prices below $100 a barrel, eased pressure on emerging-market currencies, and boosted risk sentiment slightly this week
But comments from U.S. Secretary of State Marco Rubio on Tuesday that negotiating a deal with Iran could “take a few days,” a day after U.S. forces conducted what Washington called defensive strikes in southern Iran, tempered that market optimism. The euro eased slightly to $1.163 on Tuesday after rising 0.3% on Monday.
The British pound fell 0.2% to $1.347, having risen 0.6% on Monday. Against a basket of currencies, the dollar was very slightly higher at 99.08, after falling 0.3% the previous day. “Markets are right to price some optimism because even a path toward reopening Hormuz lowers the extreme tail risk around oil, inflation and global growth,” said Charu Chanana, chief investment strategist at Saxo in Singapore. “I would not confuse positive negotiation noise with a durable de-escalation yet. The real test is not the headline deal, but whether tankers can move freely, insurance premiums can fall, and energy flows can normalize,” Chanana added.