FX.co ★ Dollar Languishes on Iran Deal Optimism

The dollar index hovered around 98 on Thursday, staying close to a six-week low as growing optimism over a possible diplomatic breakthrough between the US and Iran dampened demand for the safe-haven currency. President Donald Trump said the seven-week conflict was “close to over,” and the White House voiced confidence in a prospective agreement, adding that further in-person talks were likely to be held in Pakistan. Reports also suggested that Tehran may allow vessels to pass freely via the Omani side of the Strait of Hormuz if a deal is reached that would avert renewed hostilities. The dollar faced additional pressure from easing energy prices, which helped temper inflation concerns and lowered expectations of further monetary tightening. The Federal Reserve is widely expected to leave interest rates unchanged this month and potentially for the rest of the year.