01.04.202607:26:49UTC+00Dollar Declines

The dollar index slipped to 99.5 on the first trading day of April, its lowest level in a week, as energy prices retreated on hopes for a swift resolution to the Middle East conflict. President Donald Trump said the US would conclude its military campaign in Iran within two or three weeks, with or without a deal. Even so, traders remained cautious amid the continued buildup of US forces in the region and the ongoing disruption to traffic through the Strait of Hormuz. Market participants are now awaiting Trump’s nationwide address on the Iran situation later in the day.

In March, the dollar rose 2.3% as investors sought the safe-haven currency on fears of a protracted war. The greenback also drew support from fading expectations of Federal Reserve rate cuts this year, as the conflict pushed oil prices sharply higher and fueled inflation concerns. At the same time, Fed Chair Jerome Powell sought to reassure markets, noting that long-term US inflation expectations remain well anchored.