Dollar Slides as Iran-US Deal Hopes Rattle Oil and Bonds
Competing headlines on US-Iran nuclear talks sent oil and yields lower, dragging the dollar down against every major currency Tuesday.
The US dollar fell against all major currencies Tuesday as markets whipsawed between optimism and caution over potential US-Iran nuclear negotiations, while weak domestic housing data underscored the ongoing economic pressure from high borrowing costs. The session was defined less by resolution than by relief, with traders unwilling to fully commit in either direction.
Early reports suggesting a deal between Washington and Tehran was within reach pushed oil prices and Treasury yields lower, softening the dollar broadly. That move partly reversed after officials clarified that talks were ongoing but a formal agreement was not imminent — leaving markets in a familiar state of geopolitical limbo. Treasury Secretary Bessent added to the conversation by declaring that the US is on the "other side of the energy shock," though traders noted that price action has yet to validate that assessment.
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The British pound led gains against the greenback, with GBPUSD climbing 0.59% to 1.3380, touching an intraday high of 1.3409. The Canadian dollar also strengthened, pulling USDCAD down 0.35% to 1.4061, while the Australian and New Zealand dollars each added 0.32%. The broad-based dollar weakness reflected how sensitive currency markets remain to any shift in the geopolitical and energy outlook.
On Wall Street, the session's winners were concentrated in value and small-cap territory. The Dow Jones and the Russell 2000 both posted solid advances, while the Nasdaq struggled to hold positive ground — a split that suggested investors rotated toward rate-sensitive and cyclical names as long-term Treasury yields eased. Shorter-term yields, however, edged higher, keeping the overall rate picture mixed.
Further pressuring sentiment, US September pending home sales dropped 7.3%, a dramatic miss against the 0.5% decline economists had forecast, reinforcing concerns that elevated mortgage rates continue to suppress housing activity. September housing starts also came in below expectations at 1.221 million versus the projected 1.305 million. Continue reading at Forexlive.
