US-Iran Ceasefire Sparks Risk-On, Dollar Slips More Than 1%
The US dollar fell more than 1% on Wednesday, erasing its year-long gains after the US and Iran agreed to a two-week ceasefire, prompting investors to return to riskier assets. The Bloomberg Dollar Spot Index slumped 1.04%, its biggest daily decline since January 27.
The dollar's decline came as a wave of optimism swept through global markets: stocks rallied while oil prices fell, dampening demand for safe-haven assets. This movement reflected a shrinking geopolitical risk premium that had previously supported the dollar.
Previously, the US currency had strengthened as conflicts in the Middle East escalated and energy prices surged, triggering defensive flows into the dollar. On Tuesday evening, President Donald Trump announced a ceasefire and pledged to continue talks rather than escalate the war. (gn)
Source: Newsmaker.id