Uncertain US-Iran Deal
As reported by Bloomberg, U.S. and Iranian representatives held weekend talks about a Middle East agreement that would extend the ceasefire and allow the reopening of the Strait of Hormuz.
Importantly, available information suggests that the talks may again have failed to produce a significant breakthrough.
The U.S. president’s statements indicate that among Washington’s key demands is the Iran’s suspension of its nuclear program and the full restoration of the Strait of Hormuz to open trade status.
Trump suggested in a post on Truth Social that the pressure to end the war quickly hampers negotiations and reaching an agreement.
“Just sit back and relax, everything will work out fine, it always does!” he said.
Despite a Friday meeting in the Situation Room at the White House, where the Republican hoped to announce progress, Israel expanded its ground offensive in Lebanon.
“The question is whether the Strait of Hormuz will soon reopen, or whether the extended ceasefire will only lead to another prolonged stalemate,” reads the ING Think report.
Analysts point out that the tense situation in the Middle East remains a key factor shaping market sentiment.
“Following the reports, the dollar weakened in all currency pairs, yet the DXY index remains 1% higher than at the beginning of May. This occurs despite the fact that Brent oil prices are currently 4% lower than the May 7 low,” they said.
“It is hard to predict, whether this is truly the decisive moment for resolving the Middle East conflict, but it must be acknowledged that the dollar remains in a stronger position. The reasons again lie in the Fed’s hawkish tone and inflation data, which cause markets to still assume tightening monetary policy (15 basis points by year‑end) despite lower energy prices,” they added.
The bank’s report indicates that reports suggesting the opening of the Strait of Hormuz could cause a significant drop in the USD rate across all pairs.
“On the other hand, prolonged standstills could bring the DXY index back to 99,50, even without renewed military escalation,” it was reported.
“The dollar remains entirely dependent on news,” added.
The U.S. dollar index on Monday, June 1, stands at 99.
Chart. U.S. Dollar Index (U.S. Dollar Index)
Source: Trading Economics.
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Dollar and Euro rates on Monday, June 1
The dollar to zloty on Monday, June 1 is at 3,62 PLN.
Chart. Dollar to zloty (USD/PLN)
Source: Trading Economics.
The euro to dollar reaches 1,16 USD.
Chart. Euro to dollar (EUR/USD)
Source: Trading Economics.
Read also: Dollar before a chance to break out? Expert: “Capital will flow back to USD”
See also: Dollar before a “nervous and dynamic” move, euro waiting for a drop? Expert released a forecast for USD/PLN and EUR/USD
Source: Bloomberg, Truth Social, ING Think.
