The US Dollar (USD) trades almost flat ahead of the United States (US) stock markets opening after an extended weekend during the late European trading session on Tuesday, with the US Dollar Index (DXY) wobbling around 99.00 after giving back its early gains.
US markets were closed on Monday due to Memorial Day
The US Dollar is expected to trade sideways as investors await concrete announcements from Iran and the US regarding negotiations over the permanent deal. Latest comments from Tehran, as reported by Iran’s Fars News agency, that the unfreezing of Iran’s funds is the last serious sticking point with Washington, which is being resolved through Qatar mediation. However, there has been no official confirmation.
Meanwhile, US Interior Secretary Doug Burgum has announced that President Donald Trump will come through with a great deal on Iran. These headlines indicate that the US and Iran are close to reaching a deal soon, a scenario that will be favorable for riskier assets and diminish the appeal of safe-haven assets, such as the US Dollar. The US Dollar has outperformed in the past few months due to the war in the Middle East, as it led to a significant surge in energy prices, which prompted US inflationary pressures, and forced traders to price out the possibility of interest rate cuts by the Federal Reserve (Fed) this year.