FX.co ★ Dollar Slides as Trump Announces Mideast Ceasefire

The US dollar index dipped to approximately 98.2 on Tuesday, continuing its decline from the previous day. This movement followed President Donald Trump's announcement of a ceasefire arrangement between Iran and Israel, which he termed "The 12-Day War." The markets largely dismissed Iran's retaliatory strike on a US base in Qatar, which resulted in no casualties, and were reassured by Tehran's decision not to target the Strait of Hormuz, alleviating fears of disruptions to the oil supply. Additionally, the dollar saw weakening due to comments from Federal Reserve Governor Michelle Bowman, who indicated her willingness to support a rate cut in July if inflation remains low. Her comments mirrored dovish statements by Governor Christopher Waller. In response, traders increased their expectations for monetary easing, now anticipating around 55 basis points in rate cuts by the end of the year. The focus of investors now turns to Fed Chair Jerome Powell's semi-annual testimony before Congress, as markets seek more insights into the future direction of the central bank's policy.