The U.S. dollar slipped on Monday, reversing course from earlier in the session, as investors parsed President Donald Trump’s comments about holding "productive" talks with Iran.
At 17:15 ET (21:15 GMT), the U.S. dollar index, which tracks the greenback against a basket of six major peers, had fallen 0.5% to 99.13.
Track the U.S. dollar index with InvestingPro - now 50% off De-escalation hopes sweep markets Wall Street notched strong gains on Monday while oil prices cratered after Trump temporarily delayed missile strikes against key Iranian infrastructure following what he described as “productive” discussions with Tehran.
In a social media post, Trump said that the talks over the last two days were about arranging a “complete and total resolution” to hostilities.
“Based on the tenor and tone of these” conversations, which will continue throughout the week, Trump said he had instructed the Pentagon to “postpone any and all military strikes” against Iranian power plants and energy infrastructure for five days.
However, Iranian state media said Tehran has had no direct discussions with the U.S. Iran’s foreign ministry spokesperson dismissed claims of any talks and said the country’s position on the Strait of Hormuz and the "prerequisites for ending the war remains exactly as before," state media said.
According to the Wall Street Journal, Iran’s Fars news agency reported that there are no direct or indirect communications with the U.S. Fars added that Trump has backed down on targeting Iranian power plants following Iranian threats to retaliate with strikes on similar sites in West Asia.
"We have had very, very strong talks. We’ll see where they lead. We have major points of agreement ... They went, I would say perfectly," Trump later told reporters outside Air Force One.
"We have a very serious chance of making a deal. That doesn’t guarantee anything ... We are in the throes of a real possibility of making a deal ... But again, I’m not guaranteeing anything," the president added.
"It’s difficult to know how seriously to take this latest interjection from President Trump. It certainly doesn’t make trading any easier, although that’s a side issue when so many lives are a stake. But that’s a risk with wars, particularly when there’s chaotic and mercurial leadership on both sides," David Morrison, senior market analyst at Trade Nation, said.
"This appears, at first glance, to let the Trump administration off the hook. As many analysts pointed out, the lack of any clear, achievable war aims meant that President Trump could walk away, claiming victory, at any point. That appears to be what he is doing now. Unfortunately, the latest spin from Tehran on this is that: ‘Trump backs down from attacking Iran’s energy infrastructures after Iran’s sharp warning.’ He’s not going to like that," he added.
Euro, sterling, yen muted European markets ended largely higher after Trump’s comments.
Any potential end to the war would be a major positive for the region, which relies on the Middle East for significant amounts of both oil and natural gas. The effective shuttering of the vital State of Hormuz, through which a fifth of the world’s oil and gas supply flows, and attacks on critical natural gas facilities in Qatar have hit Europe.
