The US Dollar Index remained largely steady as investors balanced optimism over US-Iran peace negotiations with rising tensions around the Strait of Hormuz. President Trump stated that talks between Washington and Tehran are entering their final phase, while the latest FOMC Minutes revealed that most Fed officials signaled the possibility of further rate hikes if inflation remains above the 2% target.
The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, traded little changed around 99.10 during Thursday’s Asian session after posting modest losses in the previous session.
The US Dollar remained supported as investors weighed the economic impact of ongoing US-Iran peace negotiations against escalating tensions surrounding the strategically vital Strait of Hormuz shipping route.
According to a Bloomberg report on Wednesday, President Donald Trump said negotiations with Iran are approaching their final stage, while also warning that military action could resume within days if Tehran refuses US demands. Iranian President Masoud Pezeshkian responded by rejecting any notion of surrender, stating on X that attempts to force capitulation through pressure were merely an illusion.
Meanwhile, the minutes from the Federal Open Market Committee’s April meeting revealed a hawkish stance among Federal Reserve officials. Most policymakers indicated that further interest rate hikes could be necessary if inflation remains persistently above the Fed’s 2% target, with concerns growing over inflationary risks linked to the Iran conflict.
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