Forex News: U.S. Dollar Slides As Optimism Increases On U.S.-Iran

U.S. Dollar Slides As Optimism Increases On U.S.-Iran Peace Deal

(RTTNews) - The U.S. Dollar value edged lower after U.S. President Donald Trump announced that the peace talks with Iran are showing good progress. In addition, media reports hinted that Iran is reviewing a one-page memorandum on ending the hostilities completely.

The U.S. Dollar Index, DXY, which measures the Greenback against a basket of other major currencies was last seen trading at 98.04, down by 0.27 (or 0.27%) today.

On the economic front, the Mortgage Bankers Association of America revealed that the Purchase Index in the U.S. decreased to 171.10 on May 1 from 177.70 of the previous week.

Data from Automatic Data Processing revealed that private businesses in the U.S. added a net 109,000 jobs in April, above market forecasts of 99,000.

While against the Euro, USD was trading at 1.175, down by 0.48%.

Against the GBP, USD was trading at 1.359, down by 0.42%.

The S&P Global U.K. Composite Purchasing Managers' Index rose to 52.60 in April from 50.30 of the previous month, revised higher from the preliminary estimate of 52.00.

Against the USD, the Japanese Yen was trading at 156.368, up by 0.95%; the Swiss Franc was trading at 0.779, up by 0.53%; and the Canadian Dollar was trading at 1.363, down by 0.08%.

Against one unit of Australian Dollar, USD was trading at 0.723, down by 0.77%.

Australia's Ai Group Industry Index for manufacturing edged up 0.70 to 27.90 in April, still deep in contraction as cost and demand pressures persist.

The U.S.-Israel versus Iran war is going on for the third month. Immediately after the war broke out on February 28, Iran shut the Strait of Hormuz.

Despite announcing a ceasefire after a few days, which is still in place, Trump ordered a naval blockade on ships traveling to and from Iranian ports across the Strait of Hormuz.

The twin blockade left several ships belonging to nearly 87 countries stranded at sea with around 23,000 seafarers trapped inside.

Oil prices skyrocketed, triggering inflationary concerns throughout the world.

On Monday, Trump announced an initiative termed Project Freedom, whereby the U.S. military will guide the stranded ships safely out of the strait.

On the second day of the operation yesterday, reportedly only three ships passed under U.S. Navy guidance.

While experts were focusing on the progress of the project, Trump suddenly announced via Truth Social that he has paused Project Freedom for a short period of time at the request of Pakistan and other countries.

Trump also added that tremendous progress has been made in the talks with Iran which could reach a complete and final agreement soon. However, Trump asserted that the U.S. naval blockade on Iran will remain in full force and effect.

In a White House briefing, U.S. Secretary of State Marco Rubio stated that the campaign on Iran, termed Operation Fury, has ended.

Axios reported that the U.S. is close to reach an agreement with Iran on a one-page Memorandum of Understanding, comprising 14 points, to end the conflict and arrive at a framework to chart a course, probably over a 30-day period, for detailed negotiations on nuclear issues.

Reportedly, the U.S. is anticipating a response from Iran in the next 48 hours.

While Reuters confirmed the Axios' report, CNBC quoted a spokesperson for Iran's Foreign Ministry as stating that Iran is evaluating the proposal.

The MoU is said to limit Iran's nuclear programs, and in return, the U.S. will lift its sanctions on Iran. However, Trump has warned that in case of a disagreement, the U.S. may restart bombing Iran.

Crude oil prices nosedived and with inflationary concerns off the table at least for the near-term, gold prices moved higher.

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