Dollar steadies as hopes for Iran peace deal waver

By Ankur Banerjee and Harry Robertson

SINGAPORE/LONDON, May 26 (Reuters) - The dollar steadied connected Tuesday arsenic capitalist hopes of an imminent woody to reopen the Strait of Hormuz commercialized way and extremity the Iran ‌war were dented by caller U.S. attacks connected Iranian targets and comments suggesting a swift statement is ‌unlikely.

The imaginable of a bid woody had pushed lipid prices beneath $100 a barrel, eased unit connected emerging-market currencies and provided a flimsy boost ​to hazard sentiment this week.

Market optimism, however, was tempered connected Tuesday by comments from U.S. Secretary of State Marco Rubio, who said that negotiations connected a woody with Iran could "take a fewer days" aft U.S. forces conducted what Washington called antiaircraft strikes successful confederate Iran.

The euro was small changed astatine $1.164 aft rising 0.3% connected Monday. The British lb fell 0.2% to $1.348, ‌having risen 0.6% connected Monday.

Against a handbasket ⁠of currencies, the dollar was precise somewhat stronger astatine 99.05 aft falling 0.3% the erstwhile day.

"I would not confuse affirmative dialog sound with a durable de-escalation yet," said Charu Chanana, ⁠chief concern strategist astatine concern slope Saxo successful Singapore.

"The existent trial is not the header deal, but whether tankers tin determination freely, security premiums tin autumn and vigor flows tin normalise."

The displacement successful sentiment weighed connected the Japanese yen, with the U.S. ​dollar up ​0.15% astatine 159.16 yen, putting the currency brace person to ​the 160 level astatine which traders ticker for ‌potential involution by Tokyo.

Sources person told Reuters that Tokyo intervened astatine the extremity of April to haul the yen distant from the 160 per dollar mark.

The Australian dollar, often viewed arsenic a proxy for risk, was 0.15% down astatine $0.716 aft rising by 0.6% connected Monday.

Treasury yields fell sharply connected Tuesday arsenic U.S. markets returned from a holiday, catching up connected a driblet successful planetary enslaved yields connected expectations of a bid deal. [US/]

Oil prices clawed backmost immoderate of their ‌losses astatine the commencement of trading connected Tuesday connected quality of ​the U.S. strikes. Brent crude futures roseate 2.6% to $98.62 a tube aft ​dropping 7% connected Monday. [O/R]

Analysts bash not expect vigor ​prices to instrumentality to prewar levels immoderate clip soon, adjacent if a bid woody arrives ‌in the adjacent future. Supply chains volition instrumentality ​time to normalise and that volition ​keep ostentation and involvement complaint concerns firmly successful place.

"We inactive expect a dilatory lipid unwind, adjacent if prices autumn sustainably beneath $100 per tube successful the 2nd fractional of 2026," Asian slope OCBC's strategists said successful ​a note.