FX.co ★ Dollar Falls for 7th Session

The dollar index fell to 98 on Tuesday, its seventh straight daily decline and the lowest level since late February, before the conflict with Iran began. Market participants are increasingly optimistic that a lasting ceasefire between the US and Iran can be achieved. Both sides are reportedly weighing another round of negotiations after talks in Pakistan over the weekend ended without a deal, with the goal of resuming discussions before the current two-week truce expires. According to Reuters, the parties could return to Islamabad for further talks later this week. At the same time, President Trump has ordered a US naval blockade of the Strait of Hormuz. Oil prices have edged lower but remain elevated. Investors are now awaiting today’s PPI release for additional insight into how the recent oil shock is feeding through to inflation, with the data expected to show a sharp increase in energy costs. Money markets currently price in a 42% probability of a Federal Reserve rate cut by year-end.