EUR/USD holds firm above 1.1500 on Tuesday as traders assess the latest developments surrounding US-Iran talks and the possible reopening of the Strait of Hormuz.
US Treasury Secretary Scott Bessent said Washington is in talks with Iran and suggested that an agreement to reopen the Strait could be reached as early as Tuesday or Wednesday
Separately, Al Arabiya reported, citing a high-ranking source, that an announcement on reopening the key shipping route is expected shortly. The headlines pushed Oil prices sharply lower, with West Texas Intermediate (WTI) falling towards $75.50, its lowest level in three weeks. Meanwhile, the US Dollar (USD) initially weakened before recovering some ground as the situation remains fluid.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.96, little changed on the day. US Secretary of State Marco Rubio said progress has been made in discussions with Iran and Oman on allowing more ships to pass through the Strait of Hormuz, but added that no final agreement has been reached. If a peace deal is reached and the Strait of Hormuz fully reopens, Oil prices could fall further, lowering inflation risks and reducing the chances of interest-rate hikes from the Federal Reserve (Fed) and the European Central Bank (ECB) in September.