U.S. dollar steady after weekly ​loss

The dollar index added 0.04% to 99.05, after last week’s decline of 0.4%

The U.S. dollar held steady on Monday after a weekly ​loss as markets awaited progress of peace talks in the Middle East and signals on the timing of central bank moves.

The dollar index ‌edged lower last week on hopes for a deal between Iran and the U.S. to open the Strait of Hormuz shipping lane for oil. Oil climbed in early trade after Iran and the U.S. claimed new strikes on each other.

U.S. jobs data later in the week will be in focus as central bank officials signal ​that the bank may need to raise rates if the war accelerates already-high inflation.

USD will be heavily influenced by developments in the U.S.-Iran ​war and the U.S. nonfarm payrolls report for May, said Joseph Capurso, head of FX at Commonwealth Bank of Australia.

Once the ⁠Strait is reopened, over time the oil price will fade and interest rates will return as a greater influence on the USD, he added in a ​note.

The dollar index added 0.04% to 99.05, after last week’s decline of 0.4%. The yen softened 0.13% to 159.48 per dollar.

The ​euro dropped 0.13% to $1.1644.

Markets are betting the ‌central bank’s next ⁠move will be to raise its key rate compared with expectations for a cut before the start of the Iran war.

Outgoing U.S. central bank Governor Jerome Powell warned in a speech on Sunday about politicisation of monetary policy, while Beth Hammack, Lorie Logan, and Mary Daly are among central bank officials due to speak later in the week.

The lineup of Federal Reserve speakers throughout the week should continue to reinforce a balanced two-way policy approach, with officials remaining open to both rate hikes and rate cuts depending ​on incoming data, Chris Weston, head of ​research at Pepperstone, wrote in a ⁠note.