Dollar Edges up as Trump Rejects Iran Peace Move

The dollar was slightly higher on Monday, but off earlier highs after U.S. President Donald Trump rebuffed Iran’s response to a U.S. peace proposal, which kept concerns about an extended war intact and lifted oil prices.

Trump said on Monday that a ceasefire with Iran was “on life support” after he rejected Tehran’s response to a U.S. peace proposal, fueling concerns of a resumption of hostilities in the 10-week-old conflict that has killed thousands and halted vital energy flows.

U.S. crude jumped 3.37% to $98.64 a barrel and Brent rose to $104.71 per barrel, up 3.38% on the day after Trump said the offer was “unacceptable,” raising supply fears as the Strait of Hormuz stayed largely closed.

Oil prices jumped, with Brent crude up 2.5% at $103.80 a barrel.

“When the U.S. rejects Iran’s counter proposal what does that mean – does that mean the ceasefire is going to end? Or does it mean this is a new phase of negotiations?” said Marc Chandler, chief market strategist at Bannockburn Capital Markets in New York.

“The market seems to be waiting for something… it seems like right now it’s hard to find a consistent view through the markets.”

The dollar index, which measures the greenback against a basket of currencies, edged up 0.07% to 97.917 after hitting a high of 98.156, with the euro down 0.03% at $1.178.

US-China Talks Loom This Week

Trump and Chinese President Xi Jinping are set to discuss Iran, Taiwan, artificial intelligence, nuclear weapons and critical minerals when they meet later this week, according to U.S. officials.

The Chinese yuan strengthened 0.08% against the greenback to 6.791 per dollar after reaching 6.7885, its strongest level since February 2023.

“While we agree that the summit could be a tactical catalyst for CNY strength, and an important marker in stabilizing trade relations, we think the case for a stronger CNY is more fundamental and longer-lasting beyond this week’s events,” said Goldman Sachs analyst Teresa Alves in a note.

Data earlier in the day showed China’s producer prices smashed expectations to hit a 45-month high in April on rising global energy costs. That followed figures released over the weekend showing China’s export growth accelerated last month as factories raced to meet AI-related demand.

U.S. inflation data for April is due this week, with the consumer price index scheduled for Tuesday and the producer price index on Thursday. Last week, the U.S. jobs report released Friday showed that non-farm payrolls increased 115,000 in April, almost twice as much as expected, which further increased expectations the Federal Reserve was unlikely to cut interest rates this year.

Sterling strengthened 0.04% to $1.3637 as British Prime Minister Keir Starmer came under renewed pressure when three ministerial aides stepped down and more than 60 Labor lawmakers publicly called for his resignation after his appeal for another chance seemingly fell on deaf ears.

Against the Japanese yen, the dollar strengthened 0.29% to 157.11.

—

(Reporting by Chuck Mikolajczak; additional reporting by Sophie Kiderlin in London and Gregor Stuart Hunter in Singapore; Editing by Sam Holmes, Shri Navaratnam, Keith Weir and Deepa Babington)

The post Dollar Edges up as Trump Rejects Iran Peace Move appeared first on GV Wire.