The dollar took a breather on Tuesday as investors swung between hopes for a de-escalation in the U.S.-Israeli war on Iran and concerns that any such optimism could be premature. U.S. President Donald Trump said the war could end well before the timeline he initially laid out, but threatened to escalate attacks should Tehran block oil shipments from the Strait of Hormuz. The Reuters Iran Briefing newsletter keeps you informed with the latest developments and analysis of the Iran war. Sign up here. In response, Iran's Revolutionary Guards dismissed Trump's remarks as "nonsense" and said the blockade would continue until attacks from the U.S. and Israel end. Advertisement · Scroll to continue
However, equities advanced and oil prices retreated from over three-year highs, underscoring how eager investors were to seize on any hint of good news. The safe-haven dollar weakened 0.1% to $1.1652 against the euro and 0.1% to 157.49 yen. The dollar index , which measures the greenback against a basket of six peers, fell 0.3% to a one-week low of 98.6. "What will matter most is a reopening of the Strait of Hormuz and a restart of production across the Middle East. Until investors receive headlines on that score, we doubt the dollar is going to quickly hand back all the gains made over the last two weeks," said ING's global head of markets Chris Turner.
