diplomacyMay 25, 2026

Dollar slumps as signs of deal to reopen Hormuz spur risk appetite

Summary

Against the yen, the U.S. dollar was down 0.2% at 158.87 yen, while the euro rose 0.3% to $1.1642 and the British pound gained 0.4% to $1.3485. Many global markets are closed for holidays on Monday, thinning liquidity across the region. The Australian dollar advanced 0.4% to $0.7160, while its kiwi counterpart tacked on 0.5% to $0.5877. "There are early signs that risk sentiment remains supported, early Sydney trade revealing a broad-based selloff in the USD, with 'riskier' currencies like the AUD benefitting as a result," analysts from Westpac wrote in a research note. Over the weekend, hopes for a lasting peace deal appeared fragile. U.S. President Donald Trump wrote on Saturday that a memorandum of understanding on a peace deal with Iran had been "largely negotiated," with both countries and mediators in Pakistan reporting progress. However, the U.S. blockade on Iranian ships in the Strait of Hormuz would "remain in full force and effect until an agreement is reached, certified, and signed," Trump wrote on Truth Social on Sunday. There was no immediate response from Iran's government. Oil markets tumbled, as Brent crude prices fell 5.1% to $98.29 a barrel while U.S. West Texas Intermediate was at $91.76 a barrel, off 5%. Traders expressed cautious scepticism over whether a deal would stick. "Markets have become conditioned to be incredibly patient on a tangible breakthrough, but the base case of a deal remains firm, with the weekend news providing further conviction, even if the timing remains unclear." said Chris Weston, head of research at Pepperstone Group Ltd in Melbourne. Bitcoin was up 0.6% at $77,043.60, while ether was 0.4% higher at $2,099.77. (You can now subscribe to our ETMarkets WhatsApp channel) (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price (You can now subscribe to our ETMarkets WhatsApp channel) (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

Perspectives

Iranian Official

Iranian officials reaffirmed the nation's sovereign control over the Strait of Hormuz, denouncing the U.S. blockade of Iranian vessels as illegitimate foreign aggression that persists despite reported progress toward a memorandum of understanding mediated in Pakistan. Tehran emphasized its unwavering resistance to such coercive measures, which have fueled market volatility and driven sharp declines in oil prices. No agreement will be accepted until all hostile U.S. actions cease.

Israeli

Despite fragile U.S.-Iran talks on a memorandum mediated via Pakistan, Israel's security remains under existential threat from Tehran's entrenched proxy networks across the region. The sustained American blockade of Iranian vessels in the Strait of Hormuz represents a vital defensive measure that must continue until any accord is fully verified, as Tehran's silence and trader skepticism underscore the risk of renewed aggression. Oil price declines offer no relief from these persistent dangers.

Neutral

Currency markets recorded modest moves, with the U.S. dollar down 0.2% at 158.87 yen, the euro up 0.3% at $1.1642, the British pound up 0.4% at $1.3485, the Australian dollar up 0.4% at $0.7160, and the New Zealand dollar up 0.5% at $0.5877. Several major markets were closed for holidays, reducing liquidity. Brent crude fell 5.1% to $98.29 per barrel and WTI declined 5% to $91.76, following statements by U.S. President Donald Trump that a memorandum of understanding on a peace deal with Iran had been largely negotiated, an assertion Iran has not yet addressed.

Western

US strategic diplomacy advanced a largely negotiated memorandum on a peace deal with Iran to neutralize regional threats, with progress reported via Pakistani mediators. The precise blockade of Iranian ships in the Strait of Hormuz remains fully enforced until any agreement is certified and signed, maintaining pressure for verified compliance. These steps prompted a broad USD selloff, gains in risk currencies like the AUD, and a 5% drop in Brent crude amid thin holiday liquidity.

Pro-Peace

As hopes for a US-Iran peace deal remain fragile amid Trump's reported memorandum and continued blockade of Iranian ships, the humanitarian costs mount through disrupted trade, soaring living expenses, and civilian hardships in the region. Sharp drops in oil prices reflect markets pricing in potential relief from conflict, yet persistent skepticism underscores how diplomatic delays prolong suffering rather than pursue verified alternatives. With mediators like Pakistan involved, renewed talks offer a vital path to spare lives over sustained economic warfare.

Global South

U.S. President Trump's announcement of a largely negotiated memorandum with Iran, mediated by Pakistan, remains overshadowed by Washington's insistence on maintaining its blockade of Iranian ships in the Strait of Hormuz, exemplifying neo-colonial control over sovereign nations and vital trade routes. This unilateral pressure highlights the repeated failure of international institutions to restrain hegemonic interventions that undermine Global South autonomy. Oil markets responded with sharp declines, as Brent crude fell more than 5%, exposing the fragility of any accord shaped by coercive dynamics rather than equitable sovereignty.

Actors involved

Iran

Sources

SECTIONS Dollar slumps as signsBy SECTIONS Dollar slumps as signs
Against the yen, the U.S. dollar was down 0.2% at 158.87 yen, while the euro rose 0.3% to $1.1642 and the British pound gained 0.4% to $1.3485. Many global markets are closed for holidays on Monday, thinning liquidity across the region. The Australian dollar advanced 0.4% to $0.7…

See this event through different lenses

Compare how Western, Iranian, Israeli, Global South, and Pro-Peace perspectives frame this event.

Compare Perspectives

Community Notes

Loading notes...

Related events

Jul 21, 2026diplomacyUnverifiedUSIranProxyRussia

Global situation makes Northern Sea Route more attractive — Russian senator

○ 1 source

Russian Federation Council Deputy Chairman Konstantin Kosachev stated on July 21 that geopolitical tensions, including Houthi-related disruptions near Saudi Arabia and risks to the Bab al-Mandab Strait, are increasing interest in the Northern Sea Route as a shipping alternative.

He attributed this partly to the route lying within Russian territorial waters and noted sanctions since 2022 as ongoing barriers, while citing figures on oil and LNG volumes through the Strait of Hormuz. Kosachev made the remarks at a Federation Council roundtable on Northern Sea Route development.

Location: Strait of Hormuz

CurrentsAPI

Jul 20, 2026diplomacyUnverifiedUSIsraelIran

US-Iran War: Can a 10-Day Ceasefire Break the Iran-US Deadlock? Mediators Make Fresh Push| News18

○ 1 source

International mediators have proposed a 10-day ceasefire between the United States and Iran, according to a senior Iranian official cited in reports. The measure is described as intended to reduce hostilities and allow renewed talks on a prior interim agreement.

Both sides are assessing next steps in the current regional security situation.

Location: Iran

CurrentsAPI

Jul 16, 2026diplomacyUnverifiedUSIsraelIranRussia

What explains Europe’s continued role in high-stakes diplomacy

○ 1 source

Reports indicate that a US-Iran ceasefire has broken down amid renewed fighting, with the potential impact of mediation efforts by Pakistan, Qatar, and Oman remaining unclear. Earlier diplomatic steps included a June memorandum of understanding between the parties for further negotiations and talks hosted in Geneva in February.

The summary also references Europe’s historical role in diplomacy, including the 1814-15 Congress of Vienna.

Location: Iran

CurrentsAPI

Jul 16, 2026diplomacyUnverifiedUSIran

People are tired of Trump claiming Iran 'wants to make a deal' yet again

○ 1 source

Donald Trump stated in a Fox News interview that his representatives had spoken with Iranian officials an hour earlier and that those officials wanted to make a deal to end the conflict, though he noted they had broken prior agreements and expressed uncertainty about whether one would be reached.

He added that people do not want to die and that Iran would need to proceed carefully to avoid further losses. The remarks come amid an ongoing US-Iran conflict that has involved casualties and shipping disruptions in the Strait of Hormuz, with some social media users criticizing the repetition of similar statements.

Location: Iran

Harry Fletcher