U.S. Dollar Ticks Higher As Strait Of Hormuz Blockade Continues Amid U.S-Iran Peace Talks

(RTTNews) - The U.S. Dollar value edged higher as investors focused on intensifying Pakistani mediation in achieving a U.S.-Iran peace deal amid concerns of an approaching crude oil inventory shortage.

The U.S. Dollar Index, DXY, which measures the Greenback against a basket of other major currencies was last seen trading at 99.33, up by 0.13 (or 0.13%) today.

In the U.S., the University of Michigan's Consumer Sentiment Index plunged to a record low of 44.80 in May, marking the third straight monthly decline. Further, the University of Michigan's year-ahead inflation outlook was revised up to 4.80% in May from an earlier estimate of 4.50%.

Against the Euro, USD was trading at 1.160, up by 0.11%.

Against the GBP, USD was trading at 1.344, down by 0.07%. According to Office for National Statistics, retail sales volumes dropped 1.30% month-on-month in April, worse than expectations of a 0.60% fall.

Against the USD, the Japanese Yen was trading at 159.175, down by 0.16%. Japan's annual inflation edged down to 1.40% in April from 1.50% in the prior month, according to Ministry of Internal Affairs and Communications. According to Statistics Bureau of Japan, core consumer price index (excluding fresh food but including energy), rose 1.40% year-on-year in April.

Against the USD, Swiss Franc was trading at 0.785, up by 0.20%; and the Canadian Dollar was trading at 1.381, down by 0.27%.

Against one unit of Australian Dollar, USD was trading at 0.713, up by 0.28%.

The U.S.-Israel versus Iran war entered day number 84 today.

U.S. President Donald Trump urged Iran to come up with a peace plan soon to resolve the gulf crisis to avert a military confrontation.

Acting as a mediator facilitating exchange of messages between both the nations, Pakistan has sent its interior minister and military chief to Iran who are meeting senior politicians and high-level officials to smoothen the peace process.

However, the Presidential Adviser to the United Arab Emirates Anwar Gargash cautioned that there is only a "50-50" possibility of a U.S.-Iran agreement as Iran has a tendency to over-negotiate.

Gargash called for a settlement that guarantees free ship movement through the Strait of Hormuz.

Highlighting the need for a long-term political solution rather than negotiations for the sake of a ceasefire, Gargash insisted on freeing the strait from Iran's leverage.

After shutting the strait since the war erupted, Iran is now fully controlling the ship traffic and permitting only those few vessels that coordinates with Iranian authorities to pass through.

The Guardian reported the Executive Director of the International Energy Agency Fatih Birol as stating that oil markets will soon enter a "red zone" within a couple of months due to the rapid depletion in the crude oil stockpiles.

Of note, no new oil cargo went out from the Middle East since the start of the gulf war.

Birol stressed that the most important solution to the gulf war's shocks would be the "full and unconditional opening" of the Strait of Hormuz.

First, the Interior Minister of Pakistan Mohsin Naqvi rushed to Iran days before, and today Pakistan's Military Chief Asim Munir has reached Tehran.

Reuters reported that Qatar too has sent a team of negotiators in coordination with the United States.

U.S. Secretary of State Marco Rubio stated that there was "some progress" in the negotiations though he cautiously added that he did not want to exaggerate.

In line with Gargash's observations, Rubio too called the attempts by Iran to control and toll the Strait of Hormuz traffic as unacceptable.

In the U.S., Kevin Warsh was sworn in as the new Federal Reserve Chair at the White House. While swearing him in, Trump remarked that he wants Warsh to be totally independent.