The dollar is at a standstill with hopes of geopolitical easing.

Washington – The dollar remained almost stable on Wednesday against other major currencies, losing its appeal as hopes of a de-escalation of tensions between Washington and Tehran rose.

Around 5:30 pm GMT (7:30 pm Paris time), the greenback only inched down 0.05% against the euro, at $1.1799 for one euro, and decreased by 0.03% against the British pound, at $1.3571 for one pound.

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“In just a week, the dollar has lost almost all the gains made in March, indicating that the conflict risk premium is diminishing,” noted Kevin Ford from Convera.

The “buck” – one of the nicknames for the American currency – had particularly benefited from its safe haven status amid geopolitical uncertainties.

It was also supported by the surge in oil prices, denominated in dollars.

“Risk appetite is improving,” summarized Kevin Ford.

And the analyst believes that “an agreement to reopen the Strait of Hormuz” could push the greenback “above $1.20 for one euro.”

This strategic shipping lane, through which about a fifth of the world’s oil and gas normally passes, has been virtually paralyzed by Iran since the start of the war.

The blockade of this chokepoint has contributed to the spike in oil prices and consequently, to the appreciation of the dollar.

Wednesday’s rates versus Tuesday’s rates
5:30 pm GMT

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