Dollar wobbles as markets cling to hopes for Middle East peace deal The dollar nursed losses on Tuesday on rising investor optimism of a deal being struck to reopen the crucial Strait of Hormuz and end the three-month-long Iran war, although fresh US attacks on Iranian targets weighed on sentiment. Despite low odds of an imminent deal, hopes of peace have pushed oil below $100 a barrel, eased pressure on emerging-market currencies, and boosted risk sentiment. The euro held onto its gains to trade at
$1.16365 on Tuesday, while the Japanese yen fetched 158.95 per US dollar. US markets were closed on Monday for a holiday. Against a basket of currencies, the dollar was at 99.031. “Markets are right to price some optimism because even a path toward reopening Hormuz lowers the extreme tail risk around oil, inflation and global growth,” said Charu Chanana, chief investment strategist at Saxo in Singapore.
dollar, Iran strikes, Strait of Hormuz, oil price, peace deal, emerging-market currencies, euro, Japanese yen, Saxo, Charu Chanana