The dollar index (DXY) fell to a 2.5-month low, down by 0.46%, mainly due to optimism regarding a potential peace agreement between the US and Iran that could reduce safe-haven demand. The US believes Iran will respond within 48 hours to a one-page memorandum aimed at ending the nearly 10-week war, which includes lifting restrictions on the Strait of Hormuz.
In economic news, the April ADP employment change increased by 109,000, falling short of the expected 120,000, while Eurozone March PPI rose by 2.1% year-on-year, beating predictions of 1.8%. Additionally, futures markets are pricing in a 76% chance of a 25 basis point hike by the European Central Bank at its next meeting on June 11.
Gold prices rose by 3.38% to reach a one-week high, supported by the dollar’s decline and decreased inflation expectations stemming from a 6% drop in crude oil prices. In contrast, the yen gained 1.10% against the dollar, aided by signs of Japanese government intervention in support of the currency.
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