WASHINGTON (dpa-AFX) - The U.S. Dollar value edged lower on Friday as inflation concerns diminished after a sharp decline in crude oil prices after Qatar accelerated its mediatory efforts to end the U.S.-Iran war and the U.S. halted its plans on attacking Iran.
Today, the U.S. Dollar Index DXY, which measures the Greenback against a basket of other major currencies, was last seen trading at 101.67, down by 0.62 (or 0.61%).
While against the Euro, the USD was trading at 1.122, down by 0.79%, against the GBP, the USD was trading at 1.344, down by 0.75%.
Against the USD, the Japanese Yen was trading at 157.914, up by 0.35%, the Swiss Franc was trading at 0.819, up by 0.07%; and the Canadian Dollar was trading at 1.412, up by 0.03%.
Against one unit of Australian Dollar, the USD was trading at 0.692, down by 0.95%.
In an interview with CNN aired yesterday, U.S. President Donald Trump stated that the possibility for renewed attacks on Iran is highly unlikely if the ongoing efforts for achieving an end to the U.S.-Iran war show progress.
Repeating most of what he had stated on several occasions, Trump commented that with nearly 301% inflation, Iran is a failing nation. Trump stressed that U.S. had hit Iran financially and militarily.
The war, which began in February is now in its ninth month. Iran closed the Strait of Hormuz immediately after the war erupted which remains shut until now.
Despite the diplomatic efforts not yielding any positive outcome, exchange of attacks on each other was paused by both sides.
However, over the past few weeks, fears of re-escalation gripped the markets after several media reports indicated that U.S. military is all set to recommence intense attacks on Iran after the November mid-term elections.
The election results threw a defeat for the Republican party. While Trump admitted that Iran war was partly responsible for the setback, U.S. Vice President Donald Trump expressed that the conflict and the resultant oil-linked inflation pushed Republican voters to flip their votes in favor of Democrats.
Hence, experts were betting on Trump softening his stance on Iran. Trump did not reveal his plans on Iran until Saturday.
After his yesterday's interview, concerns of a fresh war-threat diminished and crude oil prices nosedived.
Adding weight to the predictions by analysts that Trump could possibly implement the economic sanctions on Iran and refrain from military maneuvers, through Truth Social, Trump messaged that the Task Force Iron Gate is in full force and effect on Iran along with the naval blockade which is preventing any movement inside or outside of the nation.
However, striking a different tone, U.S. Secretary of State Marco Rubio observed that talks are going on but not close to any breakthrough since Iran's demands are not acceptable.
Inflation concerns lowered, expectations of a high-interest regime in the U.S. descended, and the U.S. dollar started to slide due to which gold prices gained.
Meanwhile, US Central Command stated that its forces disabled a bulk carrier, Huda, in the Gulf of Oman on 7 November after it attempted to breach the U.S. naval blockade on Iran.
Iran's Islamic Revolutionary Guards Corps reported three oil tankers on fire that transited the strait.
With support from Saudi Arabia, Egypt, and Turkey, Qatar has been frantically exchanging messages, proposals and counter-proposals between the U.S. and Iran to avert a full-blown war in the gulf.
The Prime Minister of Qatar Mohammed bin Abdulrahman Al Thani is in the U.S. to meet Trump and Vance to pursue diplomatic efforts to reduce U.S.-Iran hostilities.
Investors are now looking forward to the release of the U.S. Consumer Price Index report tomorrow as well as the U.S. Producer Price Index numbers on Friday.
According to the CME Group's FedWatch Tool, currently investors are betting on a 84.20% chance of a 25-basis-point interest rate-hike at the upcoming meeting of the U.S. Federal Reserve on December 8-9 while the odds on rates being held at the current level stand at 15.80%.
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