FX.co ★ Dollar Below Recent Highs

The dollar index was little changed around 99.4 on Wednesday, holding below the ten‑month highs reached earlier this month as traders weighed the chances of a potential de-escalation in tensions with Iran. US President Trump said Washington was in negotiations with Tehran and suggested Iran might be willing to reach a peace agreement, although Iranian officials denied that any direct talks were taking place. He also indicated that he had pulled back from his recent threat to order strikes on Iranian energy infrastructure “based on the fact that we’re negotiating.” Oil prices fell by about 6% in response, offering some temporary relief from fears of a renewed surge in inflation. At the same time, traders have scaled back expectations for Federal Reserve rate cuts this year and now do not foresee any reductions in the near term.