U.S. Dollar Falls On US-Iran War De-escalation Hopes

(RTTNews) - The U.S. dollar weakened against other major currencies in the European session on Wednesday, as European shares traded higher after U.S. President Donald Trump said the Iran war could end in two weeks sans a deal to re-open the Hormuz, brining a much-needed relief to markets roiled by the conflict.

However, analysts said it could take six to eight weeks more for oil flows to normalize.

"Even if that peace is here tomorrow, still we will not go back to normal in a foreseeable future," the European Union's energy commissioner told a news conference after a meeting of EU energy ministers.

Crude oil prices plummeted on reports that Trump was willing to push Iran to reopen the Strait of Hormuz through diplomatic efforts. West Texas Intermediate crude for May delivery was down $1.28 or 1.24 percent at $101.60 per barrel.

In the European trading today, the U.S. dollar fell to a 1-week low of 1.1599 against the euro, a 5-day low of 1.3293 against the pound and an 8-day low of 158.28 against the yen, from early highs of 1.1555, 1.3220 and 159.01, respectively. If the greenback extends its downtrend, it is likely to find support around 1.17 against the euro, 1.34 against the pound and 161.00 against the yen.

Against the Swiss franc and the Australian dollar, the greenback dropped to 6-day lows of 0.7928 and 0.6953 from early highs of 0.7985 and 0.6899, respectively. The greenback may test support near 0.78 against the franc and 0.70 against the aussie.

Against the New Zealand and the Canadian dollars, the greenback slipped to 2-day lows of 0.5773 and 1.3886 from early highs of 0.5731 and 1.3912, respectively. The next possible downside target for the greenback is seen around 0.58 against the kiwi and 1.36 against the loonie.

Looking ahead, U.S. weekly MBA mortgage approvals data, U.S. ADP employment data for March, U.S. retail sales for February, U.S. and Canada S&P Global manufacturing PMI for March, U.S. business inventories for January and U.S. weekly EIA crude oil data are slated for release in the New York session.