The dollar weakened amid renewed geopolitical tensions between the US and Iran, with EUR/USD rising 0.3% to 1.1440 and GBP/USD hitting a three-week high.
Dollar Weakens as Trump Comments Fuel Market Uncertainty
The dollar index (DXY) declined on Wednesday as markets reacted to conflicting signals from US President Donald Trump regarding a potential deal with Iran. After initially declaring a ceasefire "over" following overnight strikes, Trump later stated that Iran "wants to make a deal," reigniting speculation about de-escalation in the Middle East conflict.
EUR/USD rose 0.3% to 1.1440, erasing earlier weekly losses, while GBP/USD climbed 0.3% to 1.3425, breaching key daily moving averages at 1.3395-00. The pair reached its highest level in three weeks, signaling a bullish shift in sentiment. USD/JPY slipped 0.2% to 162.25, and AUD/USD gained 0.2% to 0.6940, recovering from prior declines.
Oil prices retreated slightly, with WTI crude down 0.3% to $73.27, while 10-year Treasury yields eased from June highs of 4.58% to 4.56%. US equity futures, including S&P 500 contracts, edged up 0.3% as investors weighed the geopolitical developments.
Technical Outlook: EUR/USD faces resistance near last week's high of 1.1460, with bullish momentum supported by the breach of moving averages. GBP/USD's rally suggests potential for further gains if risk appetite remains stable. Traders will monitor upcoming US inflation data and central bank commentary for directional cues.
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