The U.S. dollar slipped on Tuesday after President Donald Trump announced a “complete and total” ceasefire between Israel and Iran, boosting investor appetite for riskier assets. The announcement, made on Trump’s Truth Social platform, followed escalating tensions but quickly shifted market sentiment toward optimism.
Iranian and Qatari officials confirmed Tehran’s agreement to halt attacks, while Israel’s Channel 12 reported Prime Minister Netanyahu agreed to the truce in a call with Trump, contingent on Iran’s compliance.
As risk sentiment improved, the Australian dollar climbed 0.35% to $0.6483, and the New Zealand dollar rose 0.37% to $0.5998. "It’s obviously positive news for risk sentiment," said Rodrigo Catril, senior currency strategist at National Australia Bank, while cautioning that the longer-term outlook depends on the ceasefire’s durability and terms.
The greenback, which had recently gained on safe-haven demand, fell broadly. Against the yen, it slipped 0.21% to 145.79. The euro edged up 0.21% to $1.1602, and the British pound advanced 0.18% to $1.3551.
Adding pressure on the dollar were dovish signals from Federal Reserve officials. Fed Governor Michelle Bowman suggested a rate cut may be appropriate if inflation remains subdued, aligning with earlier comments from Governor Christopher Waller. This growing division among policymakers is shifting market expectations.
According to CME’s FedWatch tool, the probability of a July rate cut climbed to 20% from 14.5% a day earlier. Investors are now closely watching Fed Chair Jerome Powell’s upcoming testimony to Congress for further clues on the central bank’s policy direction.
The combination of geopolitical easing and dovish Fed rhetoric drove a broad-based decline in the dollar while encouraging risk-on trades in forex markets.


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