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Dollar eases against euro and yen as oil drops on Iran pause
Brent crude slid about 8% to around $89 a barrel after the U.S. temporarily halted strikes, lifting risk appetite while traders priced a Fed hike probability of about 33% for Wednesday.
The dollar traded with a softer tone against the euro and the yen on Monday as a pause in U.S. bombing in Iran pushed oil prices lower and improved risk sentiment ahead of a packed week of central bank meetings, Reuters reports. The euro rose as much as 0.4% before paring gains to trade about flat at $1.1371. The dollar slipped 0.1% to 163.74 yen, while Brent crude futures fell $7.78, or 8%, to around $89 a barrel after the U.S. temporarily halted its two-week-long strikes. Tehran said it would also halt attacks if the U.S. maintained the pause, a development that raised expectations for renewed diplomatic efforts to de-escalate the conflict, Reuters notes. The report also said the dollar was not at its day’s lows, with U.S. yields moving more modestly than yields elsewhere. Traders looked ahead to the Federal Reserve’s July 28 to 29 policy meeting. With the new Fed Chair Kevin Warsh providing few clues on the outlook, the market saw about a 33% chance of a quarter-point rate hike, down from 37% at the end of last week, according to CME Group’s FedWatch tool, and investors also planned to watch U.S. second-quarter GDP and core PCE inflation data this week.
Latest closeWTI crude $90.47 ▼1.9%|Brent $98.38 ▼2.3%