Dollar Falters as Iran's Hormuz Proposal Sends Oil Prices Lower

The US dollar whipsawed on Tuesday, weakening after hitting a near-two-month high following Iran's proposal to reopen the Strait of Hormuz within seven days if the US eases military pressure and lifts its blockade on Iranian ports.

Brent crude futures dropped below $99 after the announcement, which could ease inflationary pressures and reduce the need for higher US interest rates. A sustained decline in oil prices would erode the dollar's yield advantage over other currencies.

The dollar index, which tracks the US currency against six major peers, was 0.02% lower at 100.4 after touching its highest since late July earlier in the session.