Dollar Pressured by Hormuz Deal Prospects

2026-08-05 02:21 By Jam Kaimo Samonte 1 min. read

The dollar index remained below the 100 mark on Wednesday, coming under renewed pressure as reports of an imminent interim agreement between the US and Iran to reopen the Strait of Hormuz drove oil prices sharply lower, easing concerns over inflation and the need for additional interest rate hikes.

On Tuesday, Qatar said an interim proposal had been prepared, while both Washington and Tehran signaled progress in negotiations to restore access through Hormuz.

US Treasury Secretary Scott Bessent also said a deal could be reached as early as Tuesday or Wednesday.

Markets reduced expectations for a September Federal Reserve rate hike to around 57%, down from 67% a day earlier.

Investors are now awaiting a series of US labor market reports for further clues on the Fed’s policy outlook, with ADP’s July private payrolls data due later today.

Meanwhile, the dollar continued to nurse losses against the yen after the US and Japan signaled they remain prepared to intervene again if necessary.



News Stream
Dollar Pressured by Hormuz Deal Prospects
The dollar index remained below the 100 mark on Wednesday, coming under renewed pressure as reports of an imminent interim agreement between the US and Iran to reopen the Strait of Hormuz drove oil prices sharply lower, easing concerns over inflation and the need for additional interest rate hikes. On Tuesday, Qatar said an interim proposal had been prepared, while both Washington and Tehran signaled progress in negotiations to restore access through Hormuz. US Treasury Secretary Scott Bessent also said a deal could be reached as early as Tuesday or Wednesday. Markets reduced expectations for a September Federal Reserve rate hike to around 57%, down from 67% a day earlier. Investors are now awaiting a series of US labor market reports for further clues on the Fed’s policy outlook, with ADP’s July private payrolls data due later today. Meanwhile, the dollar continued to nurse losses against the yen after the US and Japan signaled they remain prepared to intervene again if necessary.
2026-08-05
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The dollar index hovered around 100 on Tuesday, while US Treasury yields declined as oil prices tumbled on growing optimism that diplomatic efforts could bring an end to the US-Iran conflict, prompting investors to scale back expectations for a Federal Reserve interest rate hike in September. Qatar said mediators were making progress in negotiations, while Treasury Secretary Scott Bessent said a deal to reopen the Strait of Hormuz could be reached as early as Tuesday or Wednesday. Investors also assessed a fresh batch of US economic data. Job openings fell more than expected to 7.36 million in June, the trade deficit narrowed as imports declined more than exports, and factory orders unexpectedly fell 0.3%, marking a second consecutive monthly decline. The developments pushed the implied probability of a September Fed rate hike down to 57%. Markets now turn their attention to the ADP employment report and Friday's nonfarm payrolls for further clues on the Fed's policy outlook.
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Dollar Steadies as Markets Assess Fed Outlook
The dollar index hovered near 100 on Tuesday after rebounding in the previous session, as investors continued to evaluate the outlook for Federal Reserve monetary policy amid ongoing uncertainty in the Middle East. Markets are currently pricing in about a 65% chance of a 25 basis point Fed rate hike in September after the central bank left interest rates unchanged in July. Bank of New York Fed President John Williams monetary policy remains well positioned, adding that inflation is expected to ease during the second half of the year. Investors are now awaiting the latest JOLTS job openings report and international trade data due later today for further insight into the strength of the US economy. Elsewhere, the dollar regained some ground against the yen after the US and Japan confirmed coordinated efforts to support the Japanese currency, though the possibility of additional interventions continues to keep markets on edge.
2026-08-04