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.



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