Dollar Up After Latest Proposal
The U.S. Dollar is trading in stronger ranges against the majority of its peers after Iran said that the latest proposal from the U.S. has narrowed the gap between the two countries, as they seek to transform an increasingly fragile ceasefire into a more permanent peace.
The proposal would reportedly ink a short-term deal that would see Iran reopen the Strait of Hormuz and the U.S. lift their blockade of Iranian ports, with negotiations surrounding Iran’s nuclear program to come at a later date. A familiar framework over the last several weeks. Iran has given no indication of when it would formally answer the U.S.
In domestic news, Initial Jobless Claims for the week ending May 16th came in at 209k versus 210k expected, and Continuing Jobless Claims for the week ending May 9th came in at 1782k versus 1786k expected. Housing starts and building permits also came in slightly better than expected at 1465k and 1442k, respectively. U.S. PMI is due to be released at 9:45 am.
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EUR ⇓
The Euro is down against the Buck this morning after data out of the Euro-Zone showed that business activity shrank at the quickest pace in two and a half years. The Composite Purchasing Managers’ Index (PMI) fell to 47.5 in May, down from 48.8 in April, for the second consecutive month of contraction. Drilling into readings from the regions two largest economies shows that French PMI data came in at the lowest level since 2020, while German PMI was relatively stable. Price pressures continue to build with input costs and goods and services prices both surging at their fastest rate in three years.
GBP ⇓
The British Pound is down against the Greenback this morning after data out of the U.K. showed that British businesses posted their first decline in output in over a year. PMI fell to 48.5 in May, down from 52.6 in April. The last time that the U.K. private sector contracted was in April 2025 as a result of novel tariffs from the United States, but this time around its political challenges at home damaging sentiment, with the survey showing that Prime Minister Keir Starmer’s challenges in office hit activity in the services sector while input costs were pushed up by the conflict in the Middle East.