Forex News: U.S. Dollar Slips After Trump Announces A U.S.-Iran

U.S. Dollar Slips After Trump Announces A U.S.-Iran Peace Deal

(RTTNews) - The U.S. Dollar value ticked lower following the announcement by U.S. President Donald Trump on Sunday of a preliminary agreement between the U.S. and Iran to end their more-than-100-day conflict.

The U.S. Dollar Index, DXY, which measures the Greenback against a basket of other major currencies was last seen trading at 99.68, down by 0.06 (or 0.06%) today.

The data released by the U.S. Federal Reserve showed that on a month-on-month basis, the industrial production increased by 0.10% in May, and on a year-on-year basis, it rose by 1.70%.

While against the Euro, USD was trading at 1.159, down by 0.19%, against the GBP, it was trading at 1.340, down by 0.10%.

Against the USD, the Japanese Yen was trading at 160.365, down by 0.11% and the Swiss Franc was trading at 0.794, up by 0.20%.

Against the USD, the Canadian Dollar was trading at 1.399, down by 0.03%.

In Canada, the housing starts fell 6.10% from the previous month to a seasonally adjusted annual rate of 261,400 in May, well above market forecasts of 255,100, according to the Canada Mortgage And Housing Corporation.

Against one unit of Australian Dollar, USD was trading at 0.706, down by 0.38%.

The nearly three-and-a-half-month war between the U.S. and Iran virtually came to an end on Sunday after U.S. President Donald Trump announced via Truth Social that a preliminary deal with Iran had been completed.

In earlier instances, when Trump made similar claims of a peace deal, Iran either remained silent or expressed disagreement, but this time Iran's Deputy Foreign Minister Kazem Gharibabadi confirmed Trump's message.

However, Gharibabadi warned that Iran will take its own measures in case of "breaches from the other side."

Trump stated that the Strait of Hormuz, which was closed by Iran immediately after the war broke out on February 28, is to be reopened soon after the official signing ceremony of the deal on Friday in Switzerland.

Trump also lifted the U.S. blockade enforced in April on ships travelling to and from Iranian ports across the Strait of Hormuz.

Trump added that the strait will reopen once the sea mines laid by Iran earlier during the conflict are removed to ensure safe passage of ships.

The agreement offers a 60-day ceasefire period for both nations to discuss all contentious issues that set off the war and arrive at ways to end hostilities permanently.

Despite the full text of the Memorandum of Understanding between the U.S. and Iran yet to be made public, Trump's announcement was welcomed by market participants.

As a result, a majority of global stock markets today moved higher.

With signs of nearly three-and-a-half-month conflict ending and supply-related concerns easing, crude oil prices nosedived today.

Consequently, due to a sharp rally in stock markets, the U.S. dollar came under pressure.

However, doubts over return of normalcy in the Middle East surfaced after Israel's Defense Minister Israel Katz categorically stated that the Israeli military will remain in southern Lebanon to counter Iranian attacks.

Economists are anticipating the Federal Open Market Committee to leave the interest rates unchanged at the conclusion of its upcoming meeting on June 16-17. Of note, this will be the first meeting under new U.S. Federal Reserve Chair Kevin Warsh.

According to the CME Group's FedWatch Tool, investors are betting at only a slim 1.60% chance of a quarter-point interest rate cut by the U.S. Federal Reserve.

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