Dollar Strengthens Slightly, Markets Test Signals of US-Iran Negotiations and Hormuz Risks
The US dollar strengthened slightly on Thursday (April 16), but remained near its lowest level since March, as markets digested a flurry of statements regarding the possibility of US-Iran peace negotiations. At 8:54 a.m. ET, the dollar index rose 0.1% to 98.17. The euro weakened 0.2% to US$1.1781, and the pound fell 0.2% to US$1.3546.
Mediators are said to be continuing to push for a permanent cessation of hostilities ahead of the two-week ceasefire ending later this month. The Wall Street Journal reported that the US and Iran have agreed in principle to hold new talks after an initial round of negotiations in Pakistan last weekend failed to produce an agreement, although the time and location of the meeting have not yet been determined. JD Vance is said to be leading the US delegation in the next round of discussions.
Meanwhile, friction remains prominent, particularly over the US naval blockade of Iranian ports. A senior Iranian military commander warned Washington against continuing the blockade, while the US Central Command claimed no Iranian-linked commercial vessels or tankers had successfully circumvented it. General Dan Caine, Chairman of the US Joint Chiefs of Staff, emphasized that the blockade only applies to Iranian ports and coastlines, not the Strait of Hormuz.
Oil prices remained below US$100 per barrel as market participants assessed the impact of the energy disruption, with Hormuz reportedly nearly closed to tankers for several weeks. In the early stages of the war in late February, oil briefly surged to US$120 per barrel, sparking concerns about inflation that could depress growth. At the time, the dollar was sought after as a safe haven, supported by the narrative that the US's status as a major energy exporter could make the economy more resilient to shipping disruptions. However, as risk appetite began to recover, the dollar index weakened and is now only slightly above pre-war levels.
Risk-sensitive currencies also received a boost, with the Australian dollar reportedly strengthening to a four-year high, confirming a shift in market sentiment from defensive mode to a still-fragile risk-on mode. (Arl)*
Source: Newsmaker.id
