Dollar drifts lower as oil prices and bond yields slide on US-Iran hope
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The start of the new week is seeing a more risk-on tilt in markets, as traders and investors are picking up on a more optimistic tone between US and Iran since the weekend. In particular, there was a New York Times report saying that Iran agreed to give up enriched uranium in an
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The desk interprets the recent uptick in risk asset purchases and dollar selling as a response to perceived progress in US-Iran negotiations, indicating a shift in investor sentiment. Per the full note [source], this development contrasts sharply with earlier fears of a potential oil market tipping point that could lead to a significant spike in crude prices. With no major economic events on the horizon, the focus remains on how these geopolitical dynamics will influence currency movements, particularly the USD's potential downside. The consensus among firms suggests a cautious outlook, with targets reflecting a range of expectations for the USD's trajectory.
Indian Rupee flirts with new record lows as US-Iran stalemate extends, tensions rise
The Indian Rupee (INR) is under significant pressure as geopolitical tensions in the Strait of Hormuz escalate, with the USD gaining strength amid fears of conflict. Per the full note [source], the INR is now flirting with record lows against the USD, driven by the ongoing US-Iran stalemate and rising oil prices. The Federal Reserve's shift away from an easing bias, coupled with resilient US economic data, further supports the dollar's position. As traders await key US economic indicators this week, the INR's bearish trend is likely to persist unless the situation in the Strait improves.
Dollar eases slightly on the day as risk mood holds steadier
The dollar is experiencing a slight pullback as traders await developments in the US-Iran conflict, which is keeping market sentiment relatively stable. Per the full note from Justin Low at investinglive.com, the lack of new information has resulted in a cautious optimism among traders, with the dollar easing slightly while major currencies like the euro and pound gain modestly. This sentiment is reflected in the bond market, where persistent inflation concerns are limiting the dollar's decline. As traders assess the potential for a framework deal regarding the Strait of Hormuz, the dollar's movements remain muted, with EUR/USD hovering near 1.1760, indicating a balance between risk appetite and geopolitical caution.
The Indian Rupee extends the losses amid US-Iran stalemate with record lows in sight
The Indian Rupee (INR) is under significant pressure, primarily driven by geopolitical tensions surrounding the US-Iran stalemate, which has pushed oil prices back into triple digits. Per the full note from Giuseppe Dellamotta, the USD has regained strength as the situation remains unresolved, and the Fed's upcoming policy decision could further influence the dollar's trajectory. The desk anticipates that the INR will continue to face downward pressure, with potential record lows on the horizon if the geopolitical landscape does not improve. This aligns with our broader bearish outlook on the INR against the USD, particularly as the Fed may adopt a more hawkish stance in light of resilient US economic data.
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