Dollar slips as prospects of Hormuz reopening deal revive risk appetite

The dollar dropped at the opening of Asian trading on Monday as expectations of a deal to reopen the Strait of Hormuz pulled oil prices below $100 per barrel, even as the Trump administration played down the likelihood of reaching an agreement with Iran soon.

The U.S. dollar was down 0.2% at 158.87 yen. The euro was up 0.3% ​at $1.1642 and the British pound was up 0.4% at $1.3485.

Markets across the globe will be closed Monday for holidays, lowering liquidity across the area.
The Aussie dollar rose 0.4% to $0.7160 and the kiwi gained 0.5% to $0.5877.Westpac analysts noted in a research note: “Early Sydney trade shows a broad-based sell-off in the USD with ‘riskier’ currencies like the AUD benefitting as a result. There are early signs that risk sentiment remains supported.”

Hopes of a permanent peace pact were weak by the weekend. U.S. President Donald Trump said on Saturday that a memorandum of understanding on a peace deal with Iran has been “largely negotiated,” with both countries and mediators in Pakistan reporting progress.But the U.S. blockade on Iranian ships in the Strait of Hormuz would “continue to be in full force and effect until an agreement is reached, certified and signed,” Trump tweeted on Truth Social on Sunday. Iran’s authorities did not respond immediately.

Oil markets slipped, with Brent crude prices falling 5.1% to $98.29 a barrel and U.S. West Texas Intermediate down 5% to $91.76 a barrel.

There was cautious pessimism among traders over whether ​a agreement ⁠would stay.Markets have been conditioned to be very patient for a concrete breakthrough but the basic case for a deal remains strong and the weekend news is providing additional conviction even if timing remains uncertain.” stated Chris Weston, head of research at Pepperstone Group Ltd in Melbourne.

Bitcoin rose 0.6% to $77,043.60, ​and ether climbed 0.4% to $2,099.77.