USD weakens across board on Iran de-escalation hopes

The dollar index fell 0.16% as safe-haven demand evaporated following reports of potential diplomatic progress between Iran and international negotiators. Reuters reported Iranian officials expressed readiness to discuss uranium enrichment limitations, significantly reducing Middle East conflict risks. Gold prices also retreated from recent highs as risk appetite improved. President Trump's comments suggesting openness to dialogue further calmed market tensions. The dollar's weakness was broad-based, with major pairs like EUR/USD and GBP/USD posting gains. Stock markets rallied on the de-escalation news, with risk-sensitive currencies outperforming. The shift in sentiment marks a reversal from earlier in the week when escalating tensions drove strong safe-haven flows into the dollar. Market participants now await concrete developments from diplomatic channels, with any setbacks likely to quickly restore defensive positioning in the greenback.