Dollar Under Pressure, Lebanon and Hormuz Headlines Shake Sentiment
The US dollar weakened on Friday (April 10th) and was on track for its biggest weekly decline since January, as optimism that a temporary US-Iran ceasefire could reopen oil flows through the Strait of Hormuz prompted a sell-off of safe-haven positions. At 9:32 a.m. ET, the dollar index (DXY) fell 0.2% to 98.59 and has lost about 1.6% for the week.
The euro rose 0.2% to US$1.1728 and the British pound strengthened 0.2% to US$1.3466, while the Australian and New Zealand dollars were also heading for weekly gains against the US dollar. Markets were also assessing the release of US consumer price data, which showed a surge in March, but this increase was widely anticipated.
The main focus remains on weekend talks in Pakistan. US Vice President JD Vance said the negotiations had the potential to be "positive" and that Washington was ready to "extend its hand," but warned Iran against "trying to play games" with the negotiating team. Meanwhile, the durability of the ceasefire is questionable as Israel continues its attacks on Hezbollah in Lebanon, reigniting debate over whether Lebanon is part of the deal. Iran has also signaled it could withhold its presence in negotiations if attacks in Lebanon continue.
Meanwhile, the recovery of Hormuz flows is still unclear. Reuters reported that shipping volumes remained well below 10% of normal on Thursday, despite the ceasefire announcement, and Iran continued to insist that ships sail within its territorial waters. The combination of uncertain diplomacy and the uncertain conditions in Hormuz kept the dollar sensitive to headlines throughout the weekend.
Source: Newsmaker.id
