US Dollar Drops, Signals of an End to the US-Iran Conflict Boost Market Optimism
The US Dollar Index (DXY) fell below 100.00 on Tuesday (March 31), maintaining a weak tone, as demand for the dollar as a safe-haven currency declined. This occurred amid growing hopes for a de-escalation of the Middle East conflict. According to a report by The Wall Street Journal, US President Donald Trump told aides that he was willing to end the war against Iran, even though the Strait of Hormuz remained largely closed. Iranian President Masoud Pezeshkian also stated that his country had a "strong desire" to end the war but needed guarantees to prevent a similar conflict from recurring.
However, tensions remained high after Iranian state media reported that the Islamic Revolutionary Guard Corps (IRGC) planned to target US companies in the region in retaliation for attacks on Iran. Among the 18 companies warned by the IRGC were Microsoft, Apple, Google, Intel, and Boeing. Despite this, stock markets rallied sharply on Tuesday, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all posting solid gains.
Meanwhile, EUR/USD surged toward 1.1540, up around 0.8%, benefiting from a weaker USD as investors shifted funds away from the greenback, despite lingering concerns about Eurozone growth.
GBP/USD rebounded slightly from multi-month lows around 1.3240, up around 0.38%, but struggled to extend gains, as cautious sentiment in the UK limited the impact of the US dollar's weakness.
USD/JPY edged lower toward 158.90, with the Japanese yen (JPY) finding little support from intervention threats and hawkish signals from policymakers.
AUD/USD gained slightly to near 0.6900, up around 0.7% after five consecutive sessions of losses. On the Australian side, the RBA minutes showed that policymakers remained concerned about persistent inflation and emphasized that risks remained tilted to the upside, reinforcing their cautious yet relatively hawkish stance.
Source: Newsmaker.id
