U.S. Dollar Slips Amid Crude Oil Plunge, Upcoming Fed Rate Announcement

(RTTNews) - The U.S. Dollar value ticked lower as investors weighed the decline in crude oil prices due to the upcoming U.S.-Iran preliminary peace deal amid tomorrow's interest rate announcement by the U.S. Federal Reserve.

The U.S. Dollar Index, DXY, which measures the Greenback against a basket of other major currencies was last seen trading at 99.57, down by 0.08 (or 0.08%) today.

In the U.S., the Automatic Data Processing group's data showed that private employers added an average of 25,500 jobs per week over the four weeks ending May 30, a slight dip from the previous period's 29,000 weekly gain.

In addition, U.S. Census Bureau's data showed that housing starts fell 15.40% month-on-month in May, reaching a seasonally adjusted annual rate of 1.177 million.

The Federal Reserve Bank of New York's Services Business Activity Index fell 4 points to -10.1 in June 2026.

While against the Euro, USD was trading at 1.161, down by 0.16%, against the GBP, it was trading at 1.343, down by 0.09%.

Against the USD, the Japanese Yen was trading at 160.470, down by 0.09%.

In Japan, to combat the inflation driven by Iran war, the Bank of Japan lifted its key short-term rate by 25 bps to 1.00% in a 7-1 vote at its June meeting. In its policy statement, the board stated that the underlying inflation could accelerate above 2.00% target amid rising energy costs.

Against the USD, the Swiss Franc was trading at 0.793, up by 0.11%; and the Canadian Dollar was trading at 1.399, down by 0.04%.

Against one unit of Australian Dollar, USD was trading at 0.706, up by 0.06%.

In Australia, noting that financial conditions are now tighter than before, with signs of slowing economic activity, the Reserve Bank of Australia kept its cash rate unchanged at 4.35% in its June meeting, matching market forecasts.

On Sunday, U.S. President Donald Trump announced that a deal with Iran to discuss ways to end their mutual conflict has been completed. In addition, Trump lifted the naval blockade he had enforced on Iranian ports in April.

Market sentiments received a boost after Trump's announcement was endorsed by Iran's Foreign Minister Kazem Gharibabadi.

The preliminary deal offers a 60-day ceasefire period during which a solution to resolve all elements of disagreements would be discussed.

Today, Trump claimed that Iran has agreed to never have a nuclear weapon.

In an interview with Fox News, U.S. Vice President JD Vance admitted that a lot of technical details have to be figured out over the next two months

Significantly, the framework allowed immediate reopening of the Strait of Hormuz after the signing is done.

With crude oil-related supply concerns diminishing, yesterday, the U.S. dollar came under pressure.

Citing people familiar with the agreement, the Wall Street Journal reported that a provision in the deal allows Iran to sell its oil and fuel immediately after the signing is completed. Further, Iran is allowed to utilize banking, transportation, and insurance services to facilitate sales.

Crude oil prices moved further on the downside, adding more pressure on the U.S. dollar.

The two-day monetary policy meeting of the U.S. Federal Reserve under the new Fed Chair Kevin Warsh commenced today.

Investors are awaiting the announcement on interest rates at the conclusion of the Federal Open Market Committee meeting.

According to the CME Group's FedWatch Tool, investors are betting at a 99.60% chance that the current rates will be maintained and only a 0.40% chance of a quarter-point interest rate hike by the Fed.

However, economists have dismissed possibilities of any interest rate lowering in the near-term.