US Dollar Index hovers around 98.00 as safe-have demand eases on US-Iran optimism

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is remaining steady after posting nearly 0.5% losses in the previous day and trading around 98.00 during the Asian hours on Thursday.

The Greenback struggles amid easing safe-haven demand on optimism surrounding a potential US-Iran agreement, which triggered a sharp drop in oil prices, easing inflation concerns, and reducing expectations for a prolonged hawkish Federal Reserve (Fed) outlook.

However, Chicago Fed President Austan Goolsbee cautioned that inflation has not continued to moderate toward the Federal Reserve’s 2% target and has instead accelerated since the conflict began.

The BBC reported on Wednesday that Iran said a US proposal to end the conflict is “still being considered,” despite reports suggesting both sides may be nearing an agreement. According to reports, the US submitted a one-page memorandum of understanding to Iran that would gradually reopen the Strait of Hormuz and ease the American blockade on Iranian ports. Discussions regarding Iran’s nuclear program would follow later, though no final agreement has been reached.

Meanwhile, CNBC reported that US President Donald Trump warned Iran would face bombing “at a much higher level” if it refuses to agree to a peace deal. In a Truth Social post, Trump said the US military campaign, dubbed Operation Epic Fury, “will be at an end” if Iran “agrees to give what has been agreed to.”