US Dollar Index hovers around 99.00 due to US-Iran peace hopes

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is remaining steady after registering modest losses in the previous day and hovering around 99.10 during the Asian hours on Thursday.

The Greenback holds ground as traders assess the economic implications of peace negotiations between the United States (US) and Iran, alongside heightened threats to the critical Strait of Hormuz shipping lane.

On Wednesday, a Bloomberg report indicated that US President Donald Trump characterized the ongoing negotiations with Iran as being in their final stages. However, President Trump also reiterated a firm pledge to resume military actions within days if Iran rejects his terms. In response, Iranian President Masoud Pezeshkian emphasized that Tehran has no intention of capitulating, stating on the social media platform X that attempting to force a surrender through coercion is nothing more than an illusion.

Federal Open Market Committee (FOMC) Minutes for the April meeting were released on Wednesday, indicating a hawkish tone surrounding the Fed outlook. The majority of Federal Reserve (Fed) officials warned the central bank would likely need to consider raising interest rates if inflation continued to run persistently above their 2% target. The minutes highlighted the deepening concern among Fed officials about inflationary pressures driven by the Iran war.