U.S. Dollar Ticks Lower As Crude Oil Nosedives Amid Qatar's Push For U.S.-Iran Diplomacy

(RTTNews) - The U.S. Dollar value inched lower on Monday as oil-linked inflation concerns lowered after expectations on reopening of the Strait of Hormuz increased due to hopes that the ongoing U.S.-Iran conflict could settle through the diplomatic route.

Today, the U.S. Dollar Index DXY, which measures the Greenback against a basket of other major currencies, was last seen trading at 101.78, down by 0.09 (or 0.09%).

On the economic front, the U.S. manufacturing activity showed an expansion in October even as the Purchasing Managers' Index by S&P Global was revised down to 54.90 from an initial estimate of 56.00, compared to 55.90 in September but remained above the 50.00 threshold for the fifteenth month consecutively.

The Institute for Supply Management's Manufacturing PMI climbed to 55.50 in October, up from 54.50 in September, well exceeding market expectations of 54.60.

While against the Euro, the USD was trading at 1.119, down by 0.28%, against the GBP, the USD was trading at 1.341, down by 0.16%.

Against the USD, the Japanese Yen was trading at 157.941, down by 0.24% and the Swiss Franc was trading at 0.818, up by 0.79%.

Against the USD, the Canadian Dollar was trading at 1.398, down by 0.11%. The S&P Global Canada Manufacturing PMI declined to 49.60 in October from 51.50 in September, signalling the first contraction in 2026 so far.

Against one unit of Australian Dollar, the USD was trading at 0.700, up by 0.47%.

To end the U.S.-Iran conflict, which began in late February and is in its ninth month now, Qatar has been actively engaged in sharing proposals from the U.S. and facilitating exchange of messages between the U.S. and Iran, supported by Saudi Arabia, Turkey, and Egypt.

On Friday, Qatari officials were in Tehran for discussion with Iranian counterparts.

On Saturday, the talks moved to Doha.

On Sunday, negotiators from Iran were in Doha, Qatar, for a third consecutive day of talks.

After spending three consecutive days in Doha for discussions, negotiators from Iran departed Qatar.

Reuters reported that a framework of deal is now in circulation among Iranian stakeholders. Citing informed sources, the report added that there is potential for a follow-up meeting in the coming days.

U.S. President Donald Trump continued to signal ambiguity on his plans to end the crisis with Iran.

In Iowa, Trump stated that though he wishes to be nice with Iran, he felt that at some point, the U.S. may give Iran a hammer.

However, Axios reported that Trump had a conversation on Iran with Israel's Prime Minister Benjamin Netanyahu on Saturday where he had observed that he favors letting negotiations play out before recommencing any attacks.

Iran's Foreign Ministry Spokesperson Esmaeil Baghaei acknowledged that the Deputy Foreign Minister Kazem Gharibabadi was in Qatar to facilitate the exchange of messages with the U.S. through mediators of Qatar.

Today, Iran's President Masoud Pezeshkian stated that Iran's Supreme Leader Mojtaba Khamanei has granted powers to the government in its talks with the U.S. to end the war.

Despite the exchange of fiery dialogues by the leaders of both nations, which has driven concerns of re-escalation in the Middle East, intervention by Qatar has paved way for a possible diplomatic resolution to the crisis.

As a result, crude oil supply disruption concerns lowered and oil prices went for a tailspin.

With oil-linked inflation worries fading, chances of the U.S. Federal Reserve easing its monetary policy increases, and hence, U.S. Dollar Index moved lower.

Last week, as widely expected by economists and traders, the U.S. Federal Reserve left the interest rates unchanged.

According to the CME Group's FedWatch Tool, currently investors are betting on a 74.10% chance of a 25-basis-point interest rate hike at the upcoming meeting of the Fed on December 8-9 while the odds on the rates being held at the current level stand at 25.90%.