The U.S. dollar weakened on Wednesday, slipping to a one-week low, as hopes for a potential end to the Middle East conflict sapped the currency’s recent safe haven appeal.
At 17:10 ET (21:10 GMT), the US Dollar Index, which tracks the greenback against a basket of six major peers, was down 0.4% to 99.65.
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Trump says Iran asked for ceasefire, suggests impending U.S. exit Trump on Wednesday said on his Truth Social service that "Iran’s New Regime President, much less Radicalized and far more intelligent than his predecessors, has just asked the United States of America for a CEASEFIRE!"
"We will consider when Hormuz Strait is open, free, and clear. Until then, we are blasting Iran into oblivion or, as they say, back to the Stone Ages!!!" the president added.
If confirmed by Iran, this would mark another significant step towards de-escalation, even with uncertainty around the Strait of Hormuz. The critical waterway through which a fifth of the world’s oil and gas supply flows has been effectively shuttered by Iran since the start of the conflict, leading to surging oil prices across the globe.
Speaking to reporters in the Oval Office on Tuesday, Trump said that the U.S. will be "leaving very soon," perhaps in the next two to three weeks, adding that White House’s goal of eradicating Iran’s nuclear threat had been "attained" and Washington does not need a formal deal to conclude the conflict.
Trump is set to make a speech to the nation offering an "important update on Iran" at 21:00 ET (01:00 GMT) this evening, according to the White House.
Dollar sees best month since July 2025 The greenback on Tuesday closed out March with its best monthly performance since July last year.
With oil prices surging due to supply disruptions from the closure of the Strait of Hormuz, the potential inflationary shock has led investors to sharply recalibrate their expectations for interest rate cuts from central banks, and even increase their odds for rate hikes.
Higher rates for longer tend to strengthen the dollar, making it an attractive safe haven asset during the current Middle East conflict. The dollar has also been boosted by the U.S. being a net energy exporter and by a rush for cash.
"The Dollar Index had been a major beneficiary of Middle Eastern hostilities. This time last month it soared as investors bought up dollars in a ‘flight to safety’, spurning previous havens such as precious metals, U.S. Treasuries and currencies such as the Japanese yen and Swiss franc," David Morrison, senior market analyst at Trade Nation, said.
"It finally looked as if the Index had broken decisively above long-term resistance at 100.00 thereby signalling that the U.S. dollar may have finally put in a bottom after a dismal twelve months. But it now looks as if the dollar bulls will have to sit on their towels and hope for a different signal to indicate that it’s safe to go back in the water," Morrison added.
