The dollar index hovered near 99.1 on Wednesday, extending its recent decline as reports emerged that the United States was exploring talks with Iran to end the conflict. President Donald Trump said Tehran had made a goodwill gesture in discussions related to energy shipments through the Strait of Hormuz. Israeli media also reported that Washington was pushing for a one-month ceasefire to enable negotiations, while The New York Times said the US had submitted a 15-point proposal to Iran aimed at resolving the crisis.
Market participants, however, remained cautious, as Iranian officials denied any negotiations with Washington, and several Gulf states signaled they were prepared to join military action against Iran. Oil prices eased on the news, offering some relief to investors worried that surging energy costs could stoke inflation and force further interest rate increases. At the same time, Federal Reserve Governor Michael Barr reiterated that the central bank may need to keep interest rates elevated for an extended period to bring inflation under control.
