Dollar drifts lower as oil falls on Hormuz deal optimism

By Gregor Stuart Hunter and Lucy Raitano

SINGAPORE/LONDON, May 25 (Reuters) - The dollar fell against large currencies connected Monday arsenic hopes of a woody to reopen the Strait of Hormuz pushed lipid prices ‌below $100 per barrel, adjacent arsenic the U.S. and Iran played down the chances of reaching an statement ‌soon.

Meanwhile galore planetary markets - including successful the U.S., Hong Kong, the UK and the bulk of Europe - are closed for holidays connected Monday, ​thinning liquidity.

Against the yen, the U.S. dollar was down 0.2% astatine 158.94 yen, portion the euro roseate 0.31% to $1.11639 and the British lb gained 0.42% to $1.34865.

The Australian dollar precocious 0.5% astatine $0.7162, portion its kiwi counterpart tacked connected 0.37% to $0.58685.

The U.S. dollar scale fell astir 0.2% to 99.059.

As diplomatic efforts to find a solution to the Iran warfare continue, U.S. Secretary ‌of State Marco Rubio said determination would ⁠either beryllium a bully statement oregon Washington would woody with the state successful "another way."

Iran's overseas ministry spokesperson said conclusions had been reached connected galore topics discussed successful a imaginable memorandum ⁠of knowing with the U.S., but this did not mean Tehran was adjacent to signing an agreement.

Oil markets tumbled connected hopes of a bid deal, with Brent crude prices down 4.5% to $98.9 a tube portion U.S. West Texas Intermediate was astatine $88.98 a ​barrel, disconnected ​4.4%.

Over the weekend, determination were conflicting signs connected a bid ​deal. U.S. President Donald Trump said connected societal ‌media connected Saturday that a memorandum of knowing connected a bid woody with Iran had been "largely negotiated," with some countries and mediators successful Pakistan reporting progress.

However, connected Sunday Trump said connected Truth Social the U.S. blockade connected Iranian ships successful the Strait of Hormuz would "remain successful afloat unit and effect until an statement is reached, certified, and signed".

"Markets person go conditioned to beryllium incredibly diligent connected a tangible breakthrough, but the basal lawsuit of a woody ‌remains firm, with the play quality providing further conviction, adjacent if ​the timing remains unclear," said Chris Weston, caput of probe astatine Pepperstone ​Group Ltd successful Melbourne.

He added that if Brent ​drops towards $90 this would springiness hazard assets renewed beingness arsenic short-term ostentation expectations autumn and ‌implied complaint hike bets for 2027 are pared ​back.

European Central Bank policymaker Yiannis ​Stournaras said connected Monday that if euro portion ostentation overshoots the ECB people temporarily but significantly, determination should beryllium a cautious accommodation of monetary argumentation successful a much restrictive direction.