Dollar Slides for a Third Week as Iran Peace Optimism Lifts Risk Sentiment
The U.S. dollar fell for a third consecutive week, briefly wiping out most of its gains since the Iran war began after President Donald Trump said Iran has agreed to suspend its nuclear program indefinitely and Tehran announced the Strait of Hormuz was open. Oil prices retreated and risk appetite strengthened as a ceasefire between Israel and Hezbollah in Lebanon increased expectations of broader de-escalation.
The Bloomberg Dollar Spot Index dropped as much as 0.6% to its lowest level since Feb. 27 before trimming losses to less than 0.1%. The gauge is down more than 2% over the past three weeks. U.S. 10-year Treasury yields fell 7 basis points to 4.24%, while Fed-dated OIS pricing shifted more dovish, with markets now implying around 15 basis points of easing into the December meeting versus about 8 basis points at Thursday’s close.
G-10 currencies traded mixed on Friday. The Japanese yen and Swiss franc outperformed, while the euro and British pound were lower on the day. The Australian dollar rose as high as 0.7222 per U.S. dollar, its strongest level since June 2022, before paring gains.
EUR/USD slipped for a second day to 1.1769, down about 0.25% on the day. The pair earlier climbed to 1.1849 in New York morning trading before reversing and falling to a session low in the afternoon. In Europe, policymakers are split on how to run a mission to secure shipping lanes in the Strait of Hormuz, with French President Emmanuel Macron and UK Prime Minister Keir Starmer convening a leaders’ meeting later Friday on the issue.
EUR/GBP was steady at 0.8706, while Starmer faced domestic pressure over the appointment of Peter Mandelson as ambassador to the U.S. after reports that security clearance was granted despite objections from vetting officials. USD/JPY fell 0.4% to 158.57, its first decline in three days, after Bank of Japan Governor Kazuo Ueda highlighted the challenge of balancing upside inflation risks and downside growth risks linked to the Middle East conflict, offering no clear signal on rates ahead of the BOJ’s policy decision later this month.
Source : Newsmaker.id
