Dollar Extended Losses Last Week On Hopes Of U.S.-Iran Peace Deal

(RTTNews) - The U.S. dollar dropped against major currencies during the week ended April 17 as a de-escalation in the Middle East war dimmed safe haven demand for the dollar. The Dollar's weakness came amidst U.S. President Donald Trump's comments that he expected to reach a deal to end the war soon. However, a flare up in U.S.-Iran tensions over the weekend have reignited haven demand, helping the Dollar rebound again.

During week ended April 17, the U.S. dollar inter alia declined against the euro, the British pound, the Australian dollar, the Japanese yen, the Swedish krona, the Canadian dollar as well as the Swiss franc. As a result, the Dollar Index which measures the Dollar's strength against a basket of 6 currencies dropped more than half a percent on a weekly basis, resulting in a three-week losing streak. Here is a quick recap of the dollar's trajectory during the week ended April 17.

During the past week, the Dollar Index traded between the weekly high of 99.18 recorded on Monday and the weekly low of 97.63 recorded on Friday. The index eventually closed the week's trading at 98.10, implying a decline of 0.56 percent from the level of 98.65 on April 10.

Data released on Tuesday showed producer prices in the U.S. increasing by 0.5 percent month-over-month in March. The reading matched the previous period's growth but was way below market expectations of 1.1 percent. The less-than-expected levels of producer price inflation also aided the Dollar's decline.

The decline in crude oil prices during the week also abetted the dollar's retreat. Brent crude futures for June settlement closed trading at $90.38 on Friday versus $95.20 a week earlier. WTI crude futures for June settlement slipped to $82.59 on April 17, from $96.57 on April 10.

Boosted by the Dollar's decline, the EUR/USD pair jumped 0.38 percent during the week ended April 17. The common currency's surge against the greenback came amidst the ceasefire agreement in Lebanon and the reopening of the Strait of Hormuz. From the weekly low of 1.1662 touched on Monday, the pair climbed to a high of 1.1849 on Friday. The pair eventually closed the week at 1.1764, versus 1.1720 a week earlier.

The British pound rallied 0.41 percent against the greenback during the week ended April 17. The GBP/USD pair which had closed at 1.3462 on April 10 closed trading for the week ended April 17 at 1.3517. The weekly trading range was wider, between a low of 1.3380 recorded on Monday and a high of 1.3601 on Friday. Data released on Thursday had revealed the U.K. GDP expanding 0.5 percent month-on-month in February, compared to expectations of 0.1 percent. January's revised reading showed a growth of 0.1 percent.

The Australian Dollar jumped 1.5 percent against the U.S. Dollar during the past week amidst easing geopolitical tensions and ebbing safe haven demand for the dollar. The AUD/USD pair rallied from the level of 0.7062 recorded on April 10 to close the week ended April 17 at 0.7168. During the week, the pair oscillated between a low of 0.6984 recorded on Monday and the high of 0.7223 recorded on Friday. Data released during the week had shown Australia's job growth slowing in March while unemployment remained steady at 4.3 percent.

The U.S. Dollar declined against the Japanese Yen also during the week ended April 17 amidst hawkish hints from Bank of Japan's governor. The USD/JPY pair closed the week at 158.64 versus 159.3 a week earlier, registering a loss of 0.41 percent. During the week, the pair oscillated between the high of 159.87 recorded on Monday and the low of 157.58 recorded on Friday.

Amidst the resurgence in U.S.-Iran tensions, the safe-haven dollar has strengthened again. The six-currency Dollar Index touched a high of 98.40 on Monday and is currently trading at 98.20, implying an overnight addition of 0.10 percent from Friday's closing level of 98.10.

The EUR/USD pair is currently trading 0.07 percent higher at 1.1772 versus 1.1764 on Friday. The GBP/USD pair is currently trading near 1.3529 versus 1.3517 on Friday, implying gains of 0.09 percent.

The AUD/USD pair is currently trading flat at 0.7168 versus 0.7168 on Friday. Amidst the dollar's rebound, the USD/JPY pair is now at 158.72 as compared with the level of 158.64 recorded at the end of the previous week.