Forex News: U.S. Dollar Inches Lower After Trump Announces An

U.S. Dollar Inches Lower After Trump Announces An Imminent U.S.-Iran Deal

(RTTNews) - The U.S. Dollar value edged lower as market sentiments received a boost and crude oil prices tumbled after U.S. President Donald Trump confirmed a deal with Iran soon and recalled his earlier planned hard strikes on the nation and taking over their Kharg Island.

The U.S. Dollar Index, DXY, which measures the Greenback against a basket of other major currencies was last seen trading at 99.69, down by 0.36 (or 0.36%) today.

Against the Euro, USD was trading at 1.158, down by 0.36%. Targeting inflation, the European Central Bank increased interest rates for the first time in three years, taking the deposit facility rate to 2.25%, with the main refinancing rate at 2.40% and the marginal lending rate at 2.65%.

Against the GBP, USD was trading at 1.341, down by 0.36%.

Against the USD, the Japanese Yen was trading at 159.946, up by 0.36%; the Swiss Franc was trading at 0.795, up by 0.61%; and the Canadian Dollar was trading at 1.396, down by 0.18%.

Against one unit of Australian Dollar, USD was trading at 0.704, down by 0.70%.

In the ongoing gulf war between the U.S.-Israeli forces and Iran, days before, U.S. President Donald Trump announced that a U.S.-Iran deal could happen in a day or two.

While investors welcomed the announcement which could have led to the reopening of the Strait of Hormuz, hours later, Trump stated via Truth Social that Iran downed a U.S. Apache Helicopter and vowed that U.S. will and must respond heavily.

In addition, expressing frustration over Iran's delay in reaching a deal with the U.S., Trump cautioned that Iran will pay the price.

While U.S. forces hit targets in Iran, Iran retaliated by striking U.S. bases in Bahrain, Jordan, and Kuwait.

Today, Trump messaged that Iran will be hit very hard tonight.

Comparing the successful U.S. takeover of Venezuelan oil trade, Trump added that U.S. forces will be taking over Kharg Island that handles around 90% of Iran's exports and other oil infrastructure points critical for oil and gas markets.

In addition, in an interview with Fox News, Trump stated that the hits will be more powerful and bigger.

As a result, market participants held back from risky assets while crude oil soared.

However, hours before the strikes were set to begin, Trump messaged via Truth Social that the highest level of Iranian leadership and neighboring countries of Iran have approved a proposal for peace with the U.S., and therefore he stated he is calling off the planned strikes.

Trump added that the time and place of signing will be announced shortly.

With a major escalation averted, and prospects of normally returning across the Strait of Hormuz, oil prices tumbled and lowered inflationary pressures, weighing on U.S. dollar.

On the economic front, data released by the U.S. Labor Department revealed that on a month-on-month basis, producer prices for final demand increased 1.10% in May and on an year-on-year basis, the annual producer inflation accelerated for the fourth consecutive time to 6.50% in May.

Core producer prices rose by 0.40% over a month earlier in May, below market forecasts of a 0.50% increase. On an year-on-year basis, the core producer prices rose by 4.90%.

The producer prices increased to 157.66 in May from 156.01 in April.

On the jobs front, the number of people claiming unemployment benefits rose by 4,000 to a three-month high of 229,000 over the first week of June, solidly higher than market expectations of a decrease to 219,000. Continuing jobless claims increased to 1,795,000 for the week ending May 30 from 1,771,000 of the previous week.

According to the CME Group's FedWatch Tool, investors are betting at a 96.40% chance that the U.S. Federal Reserve will hold the interest rates at the current level in its upcoming meeting on June 16-17.

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