Dollar Index Hits 4-week Low

The dollar index fell sharply to below 99 on Wednesday, hitting a four-week low after President Trump delayed his threat to strike Iranian civilian infrastructure by two weeks in what he called a “double-sided ceasefire,” contingent on Iran reopening the Strait of Hormuz. Trump also said the US had received a 10-point proposal from Iran that he described as a “workable basis for negotiations,” with the two-week window allowing the potential agreement to be finalized. Additionally, Iran has agreed to reopen the vital waterway for two weeks provided all attacks are halted, prompting a big drop in oil prices and easing inflation concerns for now. On the data front, investors look ahead to the release of US March CPI data on Friday which is expected to provide insight into how the Middle East conflict affected prices stateside. The dollar weakened across the board, depreciated the most against the aussie and sterling.

DXY decreased to 98.84, the lowest since March 2026. Over the past 4 weeks, Dollar Index lost 0.29%, and in the last 12 months, it decreased 3.96%.

The dollar index hovered around the 100 mark on Tuesday as traders weighed escalating tensions in the Middle East alongside the approaching deadline set by President Trump for Iran to reach an agreement. President Trump warned that, unless his conditions including the reopening of the Strait of Hormuz are met by 8 p.m. Eastern Time, the US could target key Iranian infrastructure. He later intensified his rhetoric, stating that “a whole civilization will die tonight” unless Iran’s leadership agrees to a deal that includes reopening the Strait. Meanwhile, reports indicate that Iran has halted negotiation efforts with the US. On the data front, consumer inflation expectations rose in March, while the logistics sector experienced a notable increase in transportation costs. Looking ahead, the release of US March CPI data on Friday is expected to provide further insight into price pressures potentially linked to the ongoing conflict.