Optimism over a potential US-Iran peace agreement weighs on the USD ahead of the Federal Reserve’s rate announcement.
The US Dollar Index (DXY) fell to near 99.50 in Asian trading on Wednesday, extending losses amid optimism over a US-Iran peace deal. Reports suggest a preliminary agreement may be released before Friday, with a formal signing set in Switzerland.
Economists expect the Federal Reserve to hold rates at 3.50%-3.75% later today, focusing on energy-price risks from the conflict. Markets will watch Fed Chair Kevin Warsh’s press conference for hawkish signals that could support the dollar.
Safe-haven demand for the USD may weaken further if the deal reduces geopolitical tensions, though any Fed hawkishness could limit losses.