FX.co ★ Dollar Holds Decline on Iran Deal Prospects

The dollar index edged up to around 99.8 on Friday but retained most of the previous session’s losses, pressured by waning safe-haven demand after President Donald Trump indicated that a peace agreement with Iran could be signed as early as this weekend in Europe. His remarks triggered a sharp decline in oil prices, easing concerns over persistent inflation and the need for further interest rate hikes.

Meanwhile, data released on Thursday showed that US producer prices rose 6.5% year-on-year in May, the highest level since November 2022 and slightly above the 6.4% consensus forecast, underscoring the mounting impact of the Middle East energy shock. Combined with earlier figures showing consumer inflation accelerating to a three-year high, the latest PPI report is likely to strengthen expectations that the Federal Reserve may raise interest rates later this year.