Dollar Holds at 99.00 as Iran Ceasefire Talks and Rate Hike Bets Offset
Updated
Updated · Reuters · Jun 1
Dollar Holds at 99.00 as Iran Ceasefire Talks and Rate Hike Bets Offset
6 articles · Updated · Reuters · Jun 1
The dollar index was flat at 99.00 on Monday after a 0.4% weekly drop, with traders waiting for signals on a proposed U.S.-Iran ceasefire extension and the reopening of the Strait of Hormuz.
Oil rose after Israel ordered troops deeper into Lebanon, while a senior Iranian source said a deal was close but still lacked final approval; Trump said he would soon decide on the proposal.
June 5 U.S. payrolls data are now a key test for the greenback, with economists expecting 85,000 jobs and 4.3% unemployment as Fed officials warn the war could keep inflation high enough to require rate hikes.
Markets now see the Fed's next move as a rise to 3.75% from 3.50%, reversing earlier expectations for a cut before the Iran war; ECB and BOJ signals this week could further shape currency moves.
Are central banks risking a global recession by raising rates to fight a supply shock they cannot control?
Can a $40 billion government insurance plan truly secure the world's most vital oil artery from a full-blown war?
Beyond oil, how will the Hormuz blockade of global fertilizer trade threaten world food security?
Global Markets React to US-Iran Ceasefire: Fragile Relief, Inflation Risks, and Central Bank Shifts in 2026
Overview
On May 31, 2026, a tentative ceasefire between the US and Iran sparked immediate and varied reactions in global financial markets. The ceasefire offered a temporary reprieve, leading to initial market gains as the U.S. dollar retreated. This shift made non-U.S. assets more attractive and affordable for international investors, easing global financial conditions. As a result, global equities rallied, with especially strong performances in European and emerging markets. However, the situation remains fragile, and the sustainability of these gains depends on the ongoing negotiations and the stability of the ceasefire in the coming weeks.