Dollar Weakens Slightly, Markets Eye Iran and G7 Paris
The US dollar weakened slightly on Monday (May 18), although it remained near last week's high after pressure in global bond markets began to ease. At 10:11 a.m. ET, the dollar index (DXY) fell 0.2% to 99.08. The euro strengthened 0.2% to US$1.1644, while the pound rose 0.5% to US$1.3390.
Sentiment remained clouded by geopolitical risks after a drone attack sparked a fire at a United Arab Emirates nuclear facility, while Saudi Arabia claimed to have intercepted three drones. These developments raised doubts about the fragile ceasefire between Washington and Tehran. President Donald Trump also wrote that "time is running out" for Iran to reach a peace deal or face potential US military action.
In energy markets, the Strait of Hormuz—a vital passageway for about a fifth of the world's oil supply—reportedly remains effectively closed to tanker traffic. However, oil prices briefly pared gains and reversed their decline after Iranian media reported that the US had proposed temporary relief from oil sanctions until a final agreement was reached, although there has been no official confirmation from Washington.
The decline in global bond yields following the sharp sell-off in recent days has also reduced any additional support for the dollar. However, analysts believe the dollar's strength last week was still supported by its safe-haven status, including the perception that the US economy as an energy exporter is relatively better protected from energy shocks than a net importer.
Market participants this week are also monitoring the G7 finance ministers' meeting in Paris, which is expected to also discuss the Iran war. Ahead of the meeting, US Treasury Secretary Scott Bessent said he would urge countries to comply with US sanctions on Iran. In Asia, the yen held near its weakest point against the dollar since April 29, maintaining speculation of potential intervention by Japanese authorities. (arl)*
Source: Newsmaker.id
