Dollar Slips as Trump Considers Iran Peace Deal; DXY Up 0.9% in May

The U.S. dollar weakened on Friday, May 29, as increased risk appetite eclipsed safe-haven demand after President Donald Trump said he would make a final decision on a peace agreement with Iran. The dollar index (DXY) fell 0.1% to 98.92. Despite the retreat, DXY gained 0.9% for May, propelled by rising global rate-hike expectations and a bond sell-off that lifted U.S. yields. Trump said a deal would require Iran to permanently abandon nuclear weapons and reopen the Strait of Hormuz without tolls. Crude prices dipped on the announcement. Macquarie strategist Thierry Wizman said a reopening would boost energy-importing currencies such as the euro and yen, while a failure would likely keep the dollar firm. The euro edged up 0.1% to $1.1659 and the pound rose 0.1% to $1.3456. Japan disclosed it spent ¥11.7 trillion ($73.5 billion) in May intervening to support the yen, which traded at 159.25 per dollar, near the level that triggered previous action.