USD Slides as Iran-US Deal Hopes Rattle Oil and Bonds
Dollar fell against all major currencies Tuesday as Iran nuclear deal speculation drove oil and yields lower, while weak housing data added pressure.
The U.S. dollar dropped against every major currency Tuesday as volatile headlines around a potential U.S.-Iran nuclear agreement sent oil prices sliding, pulled long-term Treasury yields lower, and gave equity bulls a partial opening — though markets stopped well short of sounding an all-clear.
Early reports suggesting Washington and Tehran were close to a deal triggered selling in oil and a rally in risk-sensitive currencies. That momentum stalled after a follow-up report clarified that talks were ongoing but a deal was not imminent, leaving traders in a familiar holding pattern shaped by geopolitical uncertainty rather than economic fundamentals.
Read more Treasury Yields Plunge Sharply as Investors Seek Safe Havens →
Sterling led the currency advance, with GBPUSD climbing 0.59% to 1.3380 and briefly touching 1.3409. The Canadian dollar strengthened as USDCAD slipped 0.35% to 1.4061, while the Australian and New Zealand dollars each added roughly 0.32%. The broad-based dollar weakness reflected shifting rate-differential expectations as long-term Treasury yields retreated even as shorter-term yields edged marginally higher.
On Wall Street, the Dow Jones Industrial Average and the small-cap Russell 2000 outperformed, posting solid gains for the session. The Nasdaq, however, struggled to stay positive — a split that suggests investors rotated toward rate-sensitive and value-oriented names rather than high-multiple growth stocks. Netflix earnings added noise to the tape, with the streamer beating third-quarter profit estimates but trimming two full-year targets and issuing a disappointing fourth-quarter outlook.
A sharp miss in September pending home sales — down 7.3% versus the 0.5% decline economists had forecast — underscored the damage elevated borrowing costs continue to inflict on housing. September housing starts also came in below expectations at 1.221 million units against a 1.305 million consensus, reinforcing the view that the Federal Reserve's rate trajectory remains a critical variable for both real estate and broader growth. Continue reading at Forexlive.
