dollar

Monday brought a different energy to it. Hopes of an Iran deal edged closer to reality, and investors responded by rotating into risk assets — sending oil and the U.S. dollar lower, - 0.21%.
Reports surfaced that the United States and Iran are close to signing a 60-day ceasefire extension that would reopen the Strait of Hormuz. The proposed deal has some clear contours. During those 60 days, the Strait stays open with no transit fees charged to passing vessels. American military forces deployed across the region over the past few months would remain in position until a final comprehensive agreement is signed.
There were tangible signals on the ground, too. Shipping data showed two liquefied natural gas tankers making their way out of the Strait of Hormuz. A supertanker carrying Iraqi crude destined for China left the Gulf on Saturday after sitting stranded for nearly three months. Small movements — but they mean something.
Trump, though, immediately tempered expectations. He reminded everyone he'd told his team not to rush into anything with Iran, even as pressure mounts from all sides to get something done. So the optimism is real, but it's fragile.
When the Strait of Hormuz faces a blockade or military conflict, global investors panic, sell off risky assets, and hoard cash or safe havens. The progress toward a peaceful reopening lowers geopolitical risk. This shift causes institutional capital to return to growth-oriented and risk-on assets, providing an immediate upward price bounce for Bitcoin.
This optimism can be seen in how Bitcoin is trading today, Monday, May 25th, up 0.4% or $356 on the day. But zoom out, and the picture is ugly. Down 2.96% over the past week. Down 13.34% year-to-date. Down 30.07% over the past year.
To understand where Bitcoin is now, you have to remember where it came from. It hit a record high of nearly $125,000 in late 2025 — then plunged below $65,000 in early February, as profit-taking combined with hot inflation data took over.
Fast forward after the recovery from that bottom, and bitcoin has been on an upward but choppy trend. That's become a pattern — optimism spikes, then fades.
The real catalyst weighing down Bitcoin is what's happening under the surface. Since May 14th, $1.55 billion has walked out the door from spot Bitcoin ETFs. That date wasn't random — it was the last day any of these products recorded a net positive inflow.
Since then, it's been nothing but exits. Monday, May 19th alone saw $648.6 million in single-day redemptions, one of the largest single-day outflows for crypto ETFs in 2026. Stretch the window to two weeks, and cumulative spot Bitcoin ETF drawdowns are sitting closer to $2.26 billion.
The global bond sell-off is making things worse. As traders price in rate hikes from central banks worldwide to fight the inflation shock from surging oil prices, the environment for cryptocurrencies gets more hostile. Higher rates pull capital toward yield-bearing assets — and Bitcoin, which generates nothing, loses its appeal.
Market participants are watching fund flows closely for any sign that institutional appetite is coming back. Right now, it isn't.
$BTC #dollar

#dollar
•Dollar supported by strong US data, mixed signals on Middle East deal
•Yen shaky despite recent suspected intervention, markets alert for more
•Emerging Asian currencies pressured by global energy shock
The dollar held near a six-week peak on Friday, after conflicting signals over a U.S.-Iran peace deal whipped up volatility across financial markets, though investors latched on to hopes of some progress.
Washington and Tehran stuck to opposing stances over the latter's uranium stockpile and control of the Strait of Hormuz, although U.S. Secretary of State Marco Rubio said there had been "some good signs" in talks.
The mixed messages whipsawed markets overnight, though currency moves were largely subdued in Asian trade on Friday as investors awaited more clarity.
The dollar was a touch higher and stood at 99.23 against a basket of currencies
DXY
, not far from a peak of 99.515 hit in the previous session, its highest since April 7.
The euro
EURUSD
, which was headed for a second weekly loss, was down 0.1% on the day at $1.1607, while the pound
GBPUSD
was slightly lower at $1.342, having shrugged off data earlier that showed retail sales dropped by the most in nearly a year in April, as consumers felt the pinch of the inflationary effects of the Iran war.
The dollar found additional support from U.S. data, which showed weekly jobless claims fell last week while manufacturing activity rose to a four-year high in May, underscoring resilience in the world's largest economy.
"We're coming to the end of week 12, we're six weeks in the ceasefire, and I'm just not really that convinced we're any closer to a resolution between the U.S. and Iran," Tony Sycamore, a market analyst at IG, said of the Middle East war.
"I still feel like the risks are for the U.S. dollar to go higher, because I really just don't see a way out of this situation in the Middle East without them sort of needing to be more forceful."
☆ASIAN CURRENCIES UNDER PRESSURE;
The U.S. dollar's strength and persistently high oil prices have spelled pain for the yen
USDJPY
, which on Friday struggled on the weaker side of 159 per dollar. It was 0.1% lower at 159.09 per dollar.
The yen is teetering even after likely intervention from Tokyo just weeks ago to support it. It has given up nearly 75% of its gains from the presumed intervention, which has left traders on alert for further moves by Japanese authorities
It's just buying time, really. What they need is a change in fundamentals, and I think the best thing that could happen is a quick deal to end the Iran conflict," said Lee Hardman, a currency strategist at MUFG.
"I don't think you'd see dollar/yen drop too sharply from here, but even if it just got back down into the mid 150s, taking some of the selling pressure off the yen, that would probably be the best they can hope for right now."
The Bank of Japan is only expected to raise borrowing costs gradually while other central banks, including the European Central Bank, are likely to deliver hikes far more quickly, which puts the yen at a disadvantage with investors who seek out extra returns from higher domestic interest rates.
On a trade-weighted basis, the yen is at record lows, which favours its exporters but compounds the energy-price shock, given Japan's reliance on imported goods.
Data on Friday showed Japan's core inflation slowed to a four-year low in April, complicating the outlook for BOJ policy.
Currencies in emerging Asia have also come under immense pressure owing to the surge in global oil prices, forcing policymakers to take increasingly urgent and unusual steps to shore up their economies.
Earlier this week, Indonesia announced all exporters of natural resources must store 100% of their export revenues in state-owned banks from June 1, in a move to support the plummeting rupiah.
The rupi
USDIDR
was pinned near a record low on Friday at 17,710 per dollar.
#USInflationForecastUpOnIranConflict