Forex News: U.S. Dollar Slide As Reports Confirm Next Round

U.S. Dollar Slide As Reports Confirm Next Round Of U.S.-Iran Talks After Weekend Skirmish

(RTTNews) - The U.S. Dollar value inched lower after media reports confirmed free shipping movements across the Strait of Hormuz. The U.S. and Iran have agreed to stand down from their recent exchange of attacks over the weekend which briefly renewed escalation concerns.

The U.S. Dollar Index, DXY, which measures the Greenback against a basket of other major currencies was last seen trading at 101.12, down by 0.23 (or 0.23%) today.

Against the Euro, USD was trading at 1.143, down by 0.36%.

According to the European Commission, the Eurozone Economic Sentiment Indicator rose for a second consecutive month to 95.0 in June, moving further from April's five-year low and surpassing market expectations of 94.3.

Against the GBP, it was trading at 1.325, down by 0.54%.

Against the USD, the Japanese Yen was trading at 161.955, down by 0.16%.

Ministry of Economy Trade and Industry revealed today that retail sales in Japan increased 5.30% year on year in May, accelerating from an upwardly revised 2.80% rise over the previous month and surpassing market expectations for a 3.20% gain.

On a month-on-month basis, retail Sales increased 1.90% in May over the previous month, easing from an upwardly revised 2.10% gain in April.

Against the USD, the Swiss Franc was trading at 0.808, up by 0.18%; and the Canadian Dollar was trading at 1.421, down by 0.17%.

Against one unit of Australian Dollar, USD was trading at 0.689, up by 0.06%.

On June 17, U.S. President Donald Trump and Iran's President Masoud Pezeshkian agreed to halt their mutual attacks and signed a Memorandum of Understanding for a 60-day ceasefire. Following this, shipping traffic across the Strait of Hormuz resumed and consequently oil prices came down.

With oil-linked inflationary concerns reducing, U.S. Dollar Index saw a decline due to subdued U.S. Federal Reserve interest rate hike expectations.

On Thursday, an unknown projectile hit a Singapore-flagged vessel, MV Ever Lovely, transiting across the Strait of Hormuz following which the U.S. military launched retaliatory attacks on Iran.

Following another drone attack on a Panama-flagged vessel on Saturday, U.S. forces hit multiple Iranian targets.

In response, Iran's Islamic Revolutionary Guards Corps launched several missile and drone attacks on U.S. infrastructures in Kuwait and Bahrain.

Trump posted on social media that Iran had requested the U.S. for a meeting which he stated would take place in Doha, Qatar tomorrow. However, Iran neither confirmed nor acknowledged any scheduled meeting.

The exchange of attacks renewed concerns of wider escalation and as a result, crude oil prices soared.

WTI crude oil for August month delivery was last seen trading at $70.44, down by $1.21 (or 1.75%).

Later, media reports quoting U.S. officials stated that both nations have agreed to stand down ahead of another round of negotiations and added that vessels can freely move through the strait.

According to CME Group's FedWatch Tool, investors are currently betting on a 31.50% chance of a quarter-basis-point interest rate-hike in the upcoming Federal Reserve's meeting on July 28-29 while the bets on rates being held at the current level stand at 68.50%.

Investors are now awaiting June month's employment data from American Data Processing and the U.S. nonfarm payrolls data due later this week to assess the U.S. Federal Reserve's monetary policy stance.

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