The dollar index (DXY00) on Wednesday rose by +0.03%. The dollar recovered from early losses on Wednesday and posted modest gains on conflicting signals about prospects for a US-Iran deal to end the war and reopen the Strait of Hormuz. Iranian television said it obtained an unofficial draft of the US-Iran memorandum, which stated that US military forces would lift the naval blockade of Iran, while Iran would allow restored commercial shipping through the Strait of Hormuz. However, the dollar rebounded when US officials said the unofficial draft obtained by Iranian state television is a "complete fabrication" and "not true." The dollar also garnered support after the May Richmond Fed manufacturing survey of current conditions rose more than expected to a 4.5-year high
The dollar initially moved lower on Wednesday after WTI crude oil plunged by more than 5% to a 5-week low, which lowered inflation expectations and may prompt the Fed to ease monetary policy, a negative factor for the dollar. Also, Wednesday's rally in the Chinese yuan to a 3.25-year high weighed on the dollar.
