The dollar index (DXY00) today is down by -0.14% but remains above Wednesday's 2.5-month low. Optimism that a peace deal between the US and Iran is imminent is curbing safe-haven demand for the dollar today. Also, today's -4% decline in crude oil prices eases inflation expectations and could prompt the Fed to pursue a dovish, dollar-negative monetary policy. In addition, today's rally in the S&P 500 to a new record high has dampened liquidity demand for the dollar.
Losses in the dollar are limited due to today's dollar-friendly news on weekly jobless claims, Q1 nonfarm productivity, and Q1 unit labor costs. Also, hawkish comments today from Boston Fed President Susan Collins and Cleveland Fed President Beth Hammack were supportive of the dollar when they said they favored keeping interest rates on hold.
