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Currency Markets · Geopolitics · Risk Appetite · US Dollar
The US Dollar Index (DXY) fell 0.50% on Tuesday, breaking below the key 100.00 level for the first time since mid-March, as markets shifted towards risk appetite following Iranian media reports of potential peace talks in the Middle East, despite conflicting signals from Iran.
The DXY's decline unwound a significant portion of its nearly 3% March rally from January lows near 95.55. Iranian state media reported Tehran's readiness to end the war under specific conditions, but Iran simultaneously attacked the Kuwait-flagged Al-Salmi tanker off Dubai and dismissed a US 15-point ceasefire proposal as "unrealistic" and "excessive." This creates conflicting signals, suggesting markets are over-invested in de-escalation, especially with Trump's April 6 deadline for Iran to reopen the Strait of Hormuz approaching.
Recent US economic data, including the Conference Board's Consumer Confidence Index at 91.8 and Chicago PMI at 52.8, did not significantly shift sentiment. The week features key releases: Wednesday's ISM Manufacturing PMI and February Retail Sales, and Friday's Non-Farm Payrolls (NFP) report, with a 60K consensus against a prior negative 92K reading.
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Oil prices nudged below $95 a barrel and U.S. stock futures were flat in placid early European trade, amid investor optimism around U.S.-Iran peace talks this week.
