Dollar Slips, Axios Raises Hopes for US-Iran Deal
The Bloomberg Dollar Spot Index weakened to its lowest level of the session on Thursday (May 28th) after an Axios report stated that the US and Iran had reached an agreement, although it still awaits President Donald Trump's final approval. Following the news, all G-10 currencies strengthened against the dollar.
The BBDXY fell 0.2% and was on track to post its first weekly decline in three weeks. The New Zealand dollar and Swedish krona led the gains in the G-10 group, reflecting a temporary shift to risk-on mode as markets assessed the increased chances of de-escalation.
According to Axios, US officials said Iran pledged not to pursue nuclear weapons in the MoU, and that Iran would also remove mines in the Strait of Hormuz within 30 days. These details were the main drivers of the dollar's weakness as markets began to reduce the geopolitical risk premium that had previously supported the greenback.
However, the market's focus remains on "execution": Trump's final decision and the implementation of the Hormuz clause will determine whether the dollar's weakening continues or reverses if political or security obstacles arise on the ground. (Arl)*
Source: Newsmaker.id
