{"id":55628,"date":"2026-05-29T14:18:44","date_gmt":"2026-05-29T06:18:44","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=51316"},"modified":"2026-05-29T14:18:44","modified_gmt":"2026-05-29T06:18:44","slug":"dollar-slips-as-hormuz-deal-hopes-cut-haven-bid","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-ca\/analysis\/dollar-slips-as-hormuz-deal-hopes-cut-haven-bid\/","title":{"rendered":"Dollar Slips as Hormuz Deal Hopes Cut Haven Bid"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/06\/USD8-1024x573.webp\" alt=\"\" class=\"wp-image-43236\"\/><\/figure>\n\n\n\n<p><strong>Key Points<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>USDX traded at <strong>98.988<\/strong>, up <strong>0.050<\/strong>, or <strong>0.05%<\/strong>, after reaching a session high of <strong>99.033<\/strong>.<\/li>\n\n\n\n<li>The dollar index last traded near <strong>99.045<\/strong>, after dipping <strong>0.2%<\/strong> on Thursday.<\/li>\n\n\n\n<li>The dollar is on track to end the week <strong>0.3%<\/strong> lower, snapping <strong>two weeks<\/strong> of gains.<\/li>\n\n\n\n<li>A proposed US-Iran deal would extend the ceasefire for <strong>60 days<\/strong> and lift shipping restrictions through the Strait of Hormuz.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\"\/>\n\n\n\n<p>The US dollar held steady on Friday, but it remained on track for a weekly decline as traders priced a lower geopolitical risk premium. USDX traded at <strong>98.988<\/strong>, up <strong>0.050<\/strong>, or <strong>0.05%<\/strong>, at <strong>05\/29 08:55:02 GMT+3<\/strong>. The session high stood at <strong>99.033<\/strong>, with a low of <strong>98.885<\/strong>, an open at <strong>98.930<\/strong>, and a close at <strong>98.938<\/strong>.<\/p>\n\n\n\n<p>The dollar index was largely rangebound near <strong>99.045<\/strong>, after dipping <strong>0.2%<\/strong> on Thursday. It is heading toward a <strong>0.3%<\/strong> weekly loss, which would end a run of <strong>two weeks<\/strong> of gains. Reports that the US and Iran had reached an agreement to extend the ceasefire and ease shipping restrictions through the Strait of Hormuz reduced demand for the dollar as a safe haven.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-x wp-block-embed-x\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">The US and Iran reached an agreement to extend their ceasefire and lift restrictions on shipping through the Strait of Hormuz, though US President Trump has yet to approve it <a href=\"https:\/\/t.co\/UhuD2YNKYk\">https:\/\/t.co\/UhuD2YNKYk<\/a> <a href=\"https:\/\/t.co\/AAMHLYzSyi\">pic.twitter.com\/AAMHLYzSyi<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/x.com\/Reuters\/status\/2060176459403342293?ref_src=twsrc%5Etfw\">May 29, 2026<\/a><\/blockquote><script async src=\"https:\/\/platform.x.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>The deal still needs President Donald Trump\u2019s approval. If confirmed, it would extend the truce for another <strong>60 days<\/strong> and allow traffic to flow through the waterway while negotiators address harder issues, including Iran\u2019s nuclear programme.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">De-Escalation Pressures The Dollar<\/h2>\n\n\n\n<p>The dollar\u2019s latest weakness reflects a shift in market psychology. Traders had bought the dollar during the Iran war because oil disruption, shipping risk, and inflation fears supported defensive flows. A ceasefire extension would reduce that need.<\/p>\n\n\n\n<p>Oil futures fell more than <strong>1%<\/strong> on Friday and were on track for their steepest weekly decline since early April. Brent fell <strong>$1.04<\/strong> to <strong>$92.67<\/strong> a barrel, while WTI dropped <strong>$1.26<\/strong> to <strong>$87.64<\/strong>. For the week, Brent was down <strong>10.5%<\/strong> and WTI was down <strong>9.2%<\/strong>.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-x wp-block-embed-x\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Norway is putting pressure on the EU to remove a moratorium on new oil and gas drilling in the Arctic where almost two thirds of its petroleum resources lie <a href=\"https:\/\/t.co\/LLiafkoWDa\">https:\/\/t.co\/LLiafkoWDa<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/x.com\/business\/status\/2060230822758580302?ref_src=twsrc%5Etfw\">May 29, 2026<\/a><\/blockquote><script async src=\"https:\/\/platform.x.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>That oil decline weakens part of the dollar\u2019s support. Lower crude reduces inflation pressure, eases global growth fears, and encourages traders to rotate into risk-sensitive currencies. The euro traded flat near <strong>$1.1642<\/strong>, the pound held near <strong>$1.3435<\/strong>, and the Australian dollar was slightly higher at <strong>$0.7165<\/strong>.<\/p>\n\n\n\n<p>The New Zealand dollar gained more traction, rising <strong>0.4%<\/strong> to <strong>$0.5960<\/strong>, close to its strongest level in more than <strong>two weeks<\/strong>, after the Reserve Bank of New Zealand governor signalled earlier and steeper rate hikes were likely.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Fed Risk Still Limits Dollar Downside<\/h2>\n\n\n\n<p>The dollar is weaker on peace hopes, but the decline remains controlled because US inflation is still hot. US inflation rose at its fastest pace in <strong>three years<\/strong> in April, driven by earlier energy price gains from the Iran war. That reinforced expectations that the Federal Reserve will keep interest rates unchanged well into next year.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-x wp-block-embed-x\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Fed Chair Warsh&#39;s preferred inflation measure is cooling. A big pinch of salt is advised <a href=\"https:\/\/t.co\/5XLiyeXScV\">https:\/\/t.co\/5XLiyeXScV<\/a> <a href=\"https:\/\/t.co\/5XLiyeXScV\">https:\/\/t.co\/5XLiyeXScV<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/x.com\/Reuters\/status\/2060207042644582641?ref_src=twsrc%5Etfw\">May 29, 2026<\/a><\/blockquote><script async src=\"https:\/\/platform.x.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>The PCE price index rose <strong>3.8%<\/strong> year-on-year, while core PCE rose <strong>3.3%<\/strong>. Energy prices rose <strong>5.5%<\/strong> month-on-month, though that was below March\u2019s <strong>20.9%<\/strong> surge. Personal spending rose <strong>0.5%<\/strong>, but personal income was flat, and the savings rate dropped to <strong>2.6%<\/strong>, its lowest since June <strong>2022<\/strong>.<\/p>\n\n\n\n<p>That gives the dollar a floor. If inflation stays above target, Fed officials may resist any move toward easing. If oil keeps falling, rate-hike fears could cool, but the market still needs more than one week of lower energy prices before pricing a full policy relief cycle.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Technical Analysis<\/h2>\n\n\n\n<p>The US Dollar Index continues to consolidate just below the <strong>99.00<\/strong> mark, with momentum stalling after it rebound from May lows.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Current Price:<\/strong> 98.99<\/li>\n\n\n\n<li><strong>MA5:<\/strong> 99.00<\/li>\n\n\n\n<li><strong>MA10:<\/strong> 99.11<\/li>\n\n\n\n<li><strong>MA20:<\/strong> 98.68<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/06\/image-38-1024x474.jpg\" alt=\"\" class=\"wp-image-51318\"\/><\/figure>\n\n\n\n<p>Price is trading between the short-term moving averages, reflecting a market that lacks a clear directional catalyst. The MA20 remains upward sloping and sits beneath price, suggesting the broader recovery from the <strong>97.50\u201398.00<\/strong> area remains intact despite recent hesitation.<\/p>\n\n\n\n<p>Markets are balancing resilient US economic data against expectations that the Federal Reserve could still ease policy later in the year. This has kept the dollar trapped in a relatively narrow range rather than establishing a stronger trend.<\/p>\n\n\n\n<p>Immediate resistance remains near <strong>99.20\u201399.40<\/strong>, followed by the March high around <strong>100.50<\/strong>. On the downside, support sits at <strong>98.70<\/strong>, with stronger protection around <strong>97.90\u201398.00<\/strong>.<\/p>\n\n\n\n<p>The near-term bias remains neutral-to-bullish while the index holds above the MA20, though a decisive break above <strong>99.40<\/strong> may be needed to revive stronger upside momentum.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Cautious Forecast<\/h2>\n\n\n\n<p>USDX may stay rangebound while it trades between <strong>98.684<\/strong> and <strong>99.106<\/strong>. A break above <strong>99.106<\/strong> would support another move toward <strong>100.481<\/strong>, especially if the ceasefire deal stalls or US inflation keeps Fed policy restrictive.<\/p>\n\n\n\n<p>A break below <strong>98.684<\/strong> would point to deeper dollar weakness and bring <strong>97.910<\/strong> into view. That downside path would need three signals to align: Trump approves the <strong>60-day<\/strong> ceasefire extension, oil continues its weekly decline, and Fed rate expectations ease as energy-led inflation pressure fades.<\/p>\n\n\n\n<p><strong>Learn more about trading <a href=\"https:\/\/www.vtmarkets.com\/indices\" target=\"_blank\" rel=\"noreferrer noopener\">Indices<\/a> on <a href=\"https:\/\/www.vtmarkets.com\/trade-now\" target=\"_blank\" rel=\"noreferrer noopener\">VT Markets<\/a> today.<\/strong><\/p>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\"><summary><strong>Trader Questions<\/strong><\/summary>\n<p><strong>Why Is The US Dollar Lower This Week?<\/strong><\/p>\n\n\n\n<p>The US dollar is lower this week because reports of a potential US-Iran ceasefire extension reduced safe-haven demand. The dollar index was on track to fall <strong>0.3%<\/strong> for the week, snapping <strong>two weeks<\/strong> of gains.<\/p>\n\n\n\n<p><strong>What Is The Current USDX Price?<\/strong><\/p>\n\n\n\n<p>USDX traded at <strong>98.988<\/strong>, up <strong>0.050<\/strong>, or <strong>0.05%<\/strong>. The session high was <strong>99.033<\/strong>, with a low of <strong>98.885<\/strong>, an open at <strong>98.930<\/strong>, and a close at <strong>98.938<\/strong>.<\/p>\n\n\n\n<p><strong>Why Did The Dollar Lose Momentum?<\/strong><\/p>\n\n\n\n<p>The dollar lost momentum as traders priced a lower geopolitical risk premium. A proposed deal would extend the US-Iran ceasefire for <strong>60 days<\/strong> and ease shipping restrictions through the Strait of Hormuz.<\/p>\n\n\n\n<p><strong>How Could A US-Iran Ceasefire Deal Affect USDX?<\/strong><\/p>\n\n\n\n<p>A US-Iran ceasefire deal could pressure USDX by reducing demand for safe-haven dollar exposure. If the deal lowers oil prices and inflation fears, traders may expect less pressure on the Federal Reserve to stay restrictive.<\/p>\n\n\n\n<p><strong>Why Does The Strait Of Hormuz Matter For The Dollar?<\/strong><\/p>\n\n\n\n<p>The Strait of Hormuz matters for the dollar because disruption there can lift oil prices and inflation risk. When energy risk rises, investors often buy the dollar for safety and rate support.<\/p>\n<\/details>\n","protected":false},"excerpt":{"rendered":"<p>USDX steadies near 99 as Iran ceasefire hopes, oil weakness, Fed policy and yen risk shape dollar sentiment.<\/p>\n","protected":false},"author":89,"featured_media":52566,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[9,11],"class_list":["post-55628","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-dollar","tag-indices"],"acf":{"acf_article_selection_author":""},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/55628","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/89"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=55628"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/55628\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/52566"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=55628"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=55628"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=55628"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}