Trump Signals End of Iran Conflict, Dollar Weakens
Optimistic remarks from Donald Trump regarding the conflict with Iran have shifted global market sentiment, raising hopes that the war could be nearing its end. The renewed optimism weighed on crude oil prices and dragged the US dollar lower.
The US Dollar Index has traded in a highly volatile pattern over the past several sessions as speculation surrounding the Iran conflict intensified. The index previously surged toward 99.70 following a sharp rise in crude oil prices earlier in the week. However, in early trading on March 10, the DXY reversed course and slipped to 98.70.
Pressure on the US Dollar emerged after Donald Trump expressed confidence that the military confrontation with Iran was approaching its final phase. According to the US president, the conflict appeared to be nearing completion and could conclude in the near future.
Trump indicated that the war was already largely resolved and signaled that military operations were unlikely to continue for much longer. When asked about the duration of US military activities in Iran, he suggested that the mission would end soon, although not within the current week.
He also claimed that Iran's military capabilities had been significantly weakened, adding that much of the country's capacity — including elements of its leadership structure — had been severely damaged.
Trump added that the United States still has several military targets in Iran. However, he assessed that these targets could be resolved quickly, even within a day if necessary.
The optimism surrounding a potential end to the conflict has not only weighed on the U.S. dollar but also triggered a correction in crude oil prices.
Optimism regarding the potential end of the conflict not only pressured the US Dollar but also triggered a correction in crude oil prices. The sharp rally seen at the start of the week has begun to ease.
Currently, Brent Crude Oil is trading around $91.75 per barrel. While lower than its recent peak, prices remain above last week's levels as some investors remain skeptical of Trump's comments.
The US Dollar Index itself is still hovering around 98.80 at the time this report was compiled.
According to Marc Chandler from Bannockburn Global Forex, current market movements are more influenced by expectations than confirmed developments.
Speaking to Reuters, Chandler suggested that the dollar could weaken further while equity markets might gain if the situation truly marked the end of the war. However, he added that the final outcome remained uncertain.
He warned that the prevailing optimism could quickly reverse. If those expectations proved incorrect, price movements could shift again—even within the same trading day.
Amid this uncertainty, major currency pairs have continued to trade unevenly within a relatively narrow range. EUR/USD and GBP/USD briefly moved away from their lowest points since December but weakened again in early trading.
Meanwhile, USD/JPY remains around 158.00, and AUD/USD is trading within a limited range of 0.7000 to 0.7100.