Forex News: U.S. Dollar Slips Amid U.S.-Iran Escalation As Prospects

U.S. Dollar Slips Amid U.S.-Iran Escalation As Prospects Of Peace Remain Subdued

(RTTNews) - The U.S. Dollar value ended roughly flat as U.S. forces hit Iran for the 11th consecutive night while signals on the prospects for a truce through Qatari and Pakistani mediation remain muted.

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 0.05 (or 0.05%) today.

According to the Mortgage Bankers Association of America, the Purchase Index increased to 165.80 in July 17 from 157.20 of the previous week.

Against the Euro, the USD was trading at 1.141, down by 0.12%.

Against the GBP, the USD was trading at 1.337, unchanged.

According to the Office for National Statistics, the annual inflation rate eased to 2.60% in June from 2.80% in May, slowing more than the expected fall to 2.70%, and on a month-on-month basis, it rose 0.10%.

The annual core inflation rate held steady at 2.60% in June 2026, matching May month's reading and on a month-on-month basis, it remained unchanged at 0.30% in June.

Against the USD, the Japanese Yen was trading at 163.159, down by 0.01%.

According to Ministry of Finance, Japan's trade balance swung to a deficit of JPY 406.9 billion in June from a surplus of JPY 122.3 billion for the same month last year, far exceeding market expectations of a JPY 120 billion shortfall.

Against the USD, the Swiss Franc was trading at 0.814, down by 0.21%; and the Canadian Dollar was trading at 1.408, up by 0.14%.

Against one unit of Australian Dollar, the USD was trading at 0.700, up by 0.02%.

The Middle East crisis continued to impact the movement of the U.S. dollar.

Continuing to take a hard stance, U.S. President Donald Trump claimed that Iran wanted to desperately meet with the U.S. but the U.S. has no interest in talks unless Iran commits to a meaningful approach.

Through Truth Social, Trump stated that for every single strike by Iran on any ship traveling through the Strait of Hormuz, U.S. forces will destroy a power plant or a bridge in Iran, even closer to Iran's capital, Tehran.

Trump also threatened that the U.S. military will bomb Iran's Pickaxe Mountain, a supposedly fortified underground facility where Iran is piling up its nuclear enrichments.

Iran counter-warned that such an attempt would be treated as an expansion of the war in the region and vowed that Iran would hit back at the U.S. allies and military bases across the Middle East.

These exchanges of rhetoric have triggered concerns of an expansive war in the gulf region.

Today, U.S. Secretary of State Marco Rubio stated that conceding to Iran's demand to take control over the Strait of Hormuz would set a dangerous precedent.

Rubio, however, reiterated that the U.S. is open-minded and committed to diplomacy and was willing to pursue a negotiated resolution with Iran but remarked that Iran is not serious to continue the talks.

Yesterday, Iran's Interior Minister Eskandar Momeni arrived in Pakistan and held behind-the-door consultations with Pakistan's Army Chief, Field Marshal Asim Munir.

Later, Momeni had discussions with Pakistan's Prime Minister Shehbaz Sharif.

No announcement on any development on the efforts taken by intermediaries have surfaced though.

Currently, investors are betting on a 33.70% chance of a quarter-basis-point interest rate-hike in the upcoming meeting of the U.S. Federal Reserve on July 28-29 while the odds on rates being held at the current level stand at 66.30%, according to the CME Group's FedWatch Tool.

Bloomberg and Reuters reported that the Bank of Japan is open for faster rate hikes than the bi-annual rise after the Japanese Yen fell to a 40-year low. The reports offered support for the Yen.

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