The dollar snapped an eight-day losing streak on Thursday, rising with yields and oil as doubts lingered about the possibility of U.S.–Iran talks quickly easing Hormuz disruptions. U.S. and Iranian negotiators are now pivoting toward a temporary memorandum instead of a comprehensive deal according to Reuters sources, while Bloomberg reported that Gulf and European officials see the U.S. needing about six months to clinch an Iran deal. U.S. President Donald Trump said Iran has offered to forgo nuclear weapons for over 20 years, that a new meeting could take place this weekend, and that he is unsure that the ceasefire with Iran needs to be extended. Trump also announced that Lebanon and Israel had agreed on a 10-day ceasefire. In U.S. data, weekly jobless claims declined, while the Philadelphia Fed’s April index beat expectations, pointing to rising new orders along with price pressures. New York Fed President John Williams said the Middle East war is adding to inflation pressures, while heightened uncertainty limits guidance. Dovish Fed Governor Stephen Miran said cooling inflation allows scope for roughly three rate cuts this year, though he warned price pressures were worsening before the war. The German government halved its growth forecast for 2026 to 0.5%. European Central Bank policymakers were wary of raising interest rates prematurely when they met last month.
The dollar index rebounded after an eight-day drop to its lower 20-day Bollinger, while volatility ticked higher as the equity risk rally slowed.
EUR/USD pulled back from a two-month high of 1.1823 on broad dollar buying and firmer U.S. yields, with bearish daily signals and resistance near 1.1800 highlighting downside risks.
GBP/USD hovered near session lows as resistance ahead of 1.36 held firm, with bears brushing off upbeat UK GDP data amid concerns over sticky inflation even as the pair stayed near two-month highs.
AUD/USD eased after hitting a 46-month high, with bearish daily signals pointing to scope for a corrective pullback despite supportive longer-term trends.
USD/JPY held modest gains as oil, the dollar index and yields edged higher, sitting near its 21-day moving average after rebounding above 158.50, though widening bearish risk reversals point to capped upside. Treasury yields were 1 to 4 basis points higher as the curve steepened. The 2s-10s curve was up about 1 basis point to +52.8bp.
The S&P 500 rose 0.16%.
WTI oil rose 3% amid supply worries.
Gold was little changed while copper eased 0.3%.
Heading toward the close: EUR/USD -0.15%, USD/JPY +0.14%, GBP/USD -0.19%, AUD/USD -0.14%, DXY +0.15%, EUR/JPY -0.02%, GBP/JPY -0.08%, AUD/JPY -0.01%.(Editing by Burton Frierson Reporting by Robert Fullem)
