Dollar hovers around 10-day low as US, Iran reach peace deal

By Sophie Kiderlin and Jiaxing Li

LONDON/HONG KONG, June 15 (Reuters) - The U.S. dollar traded astir a 10-day debased against different large currencies connected Monday arsenic a preliminary statement to extremity the warfare betwixt the U.S. and Iran sent lipid prices tumbling ‌and boosted request for riskier assets.

U.S. and Iranian officials said connected Sunday they had agreed connected a model for a woody ‌to extremity their war, halt the U.S. blockade of Iran and reopen the Strait of Hormuz.

The memorandum of knowing is scheduled to beryllium officially signed connected Friday successful ​Switzerland, but caution inactive lingered arsenic markets awaited much details and arsenic the destiny of Iran's atomic programme was near for further negotiations.

Oil prices slumped, with Brent crude futures down astir 5% to $82.9 a barrel.

The dollar index, which measures the greenback against a handbasket of currencies including the yen and the euro, was small changed astatine 99.52, hovering astir its lowest since June 5.

Nick Rees, caput of macro probe astatine Monex Europe, said that ‌despite the preliminary woody betwixt the U.S. and ⁠Iran, markets would apt beryllium cautious astir pricing successful further optimism.

"There's plentifulness of country to beryllium disappointed here," helium said. "Crucially, we haven't heard thing connected the atomic side. If that comes done implicit the adjacent fewer days, ⁠then I deliberation we tin beryllium a spot much constructive."

"But without a atomic agreement, I don't deliberation we tin simply presume that immoderate deal's going to hold. So we are cautiously optimistic, but that warrants a comparatively tiny FX reaction," Rees said.

The euro was past 0.32% higher astatine $1.1605, and sterling roseate ​0.16% ​to $1.3428. Both were adjacent the strongest level since June 5.

The Japanese yen was ​broadly dependable astatine 160.10 per dollar, continuing to hover astir ‌the 160 level wide seen arsenic a enactment successful the soil for imaginable authoritative intervention.

CENTRAL BANKS IN FOCUS

Major cardinal banks, including the Federal Reserve, the Bank of Japan, the Bank of England and the Reserve Bank of Australia, volition present complaint decisions this week, with markets focused connected whether prospects for a bid woody volition easiness their ostentation concerns and power the existent tightening trajectory.

The Federal Reserve is wide expected to clasp rates successful the existent scope of 3.5%-3.75% connected Wednesday, but each eyes volition beryllium connected the argumentation connection and property league for what ‌the caller chair, Kevin Warsh, signals.

Investors trimmed bets connected a complaint hike this ​year and present terms successful astir a 50% accidental of a determination successful December, ​down from implicit 70% a week ago, according to the ​CME FedWatch Tool.