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[MARKET ANALYSIS] Greenback knocked amid hopes of US and Iran returning to negotiations

The report of potential US-Iran negotiations has catalyzed a risk-on sentiment, driving the USD lower as traders react optimistically.

Newsquawk StaffPublished On the live feed at — 3 more headlines followed before this page went public
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[MARKET ANALYSIS] Greenback knocked amid hopes of US and Iran returning to negotiations

Next round of talks between US and Iran could take place this week or early next week, according to the Iranian embassy official in Pakistan

IEA OMR: sees world oil demand falling by 80k in 2026 due to Iran (prev. forecast for a 640k BPD rise); sees world oil supply falling by 1.5mln BPD in 2026 (prev. forecast for 1.1mln BPD rise)

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  • FX began the morning with a slight positive bias which was exacerbated by reports that US and Iran will return to negotiations later in the week. This report sparked a risk-on move, with crude falling USD 1.7/bbl, DXY marking fresh session lows, and high-beta currencies benefiting. This comes despite extensive reporting from several outlets on the resumption of talks. It is worth noting that the outlet that ran this headline has since tweaked the headline to "could" resume talks, when it previously said "to" resume talks. With regards to date and time, that is not yet confirmed, though Pakistani Journalist Mallick writes "While Islamabad has offered to host the next round of in person talks between US and Iran, which could be held at a working level, to my understanding, date and venue for the next round has not been finalised as yet"
  • The greenback looks to a busy day with US PPI and a packed calendar for Fed speak. Fed's Goolsbee (2027 voter, Dovish; no text expected) will speak to Yahoo Finance, He is also set to take part in a panel discussion and give remarks to media separately today.
  • Barkin (2027 Voter, Neutral; no text), Barr (Voter, Neutral; text expected), Paulson (2026 Voter, Dovish; no text) and Collins (2028 Voter, Neutral; no text expected) are to speak on rural economic development.
  • DXY continues to trade below all significant DMAs after falling below 100- and 200-DMAs in Monday's session. In terms of levels below, 97.87 marks the beginning of the war open, while today's session low was marked at 98.11.
Context

However, the previous certainty suggested by the initial headline has been tempered by adjustments, introducing uncertainty that could affect market stability. The weakening of the greenback amidst these geopolitical developments also hints at broader implications for commodities and high-beta currencies, emphasizing the interconnectedness of these markets.

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