Dollar Weakness Continues Amid Iran Deal Hopes
The US dollar weakened across the board on Tuesday due to headlines indicating an imminent US-Iran deal, but its losses were trimmed as the anticipated timeline for the agreement passed without an announcement.
A Qatari mediator reported that language for a possible US-Iran agreement had been drafted, while US Treasury Secretary Bessent confirmed that an Iran deal could have come as soon as yesterday and would have included the reopening of the Strait of Hormuz.
The data from next week's US CPI report will be critical for the September FOMC decision and the Jackson Hole Symposium. A hot report is likely to trigger a rally in the US dollar, with traders increasing rate hike bets. In contrast, a soft report should reduce further the risk of Fed tightening and put more pressure on the greenback.