Dollar Gains on Fading Iran Hopes, Euro Finds Support in Lagarde Comments

The US dollar is gaining support due to optimism about progress in US-Iran negotiations fading and Brent crude oil prices reaching $109/bbl. However, the greenback's gains are being tempered by high valuations and rising interest rates.

ECB President Lagarde recently expressed a dovish tilt, saying that tight financial conditions are limiting the pass-through of energy costs to the broader economy. This has lifted some support off the euro, which is now trading around 1.1320-30 summer lows.

The Reserve Bank of Australia hiked rates as expected to 4.60% but Governor Michele Bullock signaled that policymakers considered holding rates steady due to risks to the housing market and a potentially slower global economy.