Dollar rises as Iran deal doubts cloud outlook

U.S. dollar, Euro, Yen and Pound banknotes are seen in this illustration taken May 4, 2025. REUTERS/Dado Ruvic/Illustration

21 May 2026 08:47AM

(Updated: 21 May 2026 11:57PM)

NEW YORK: The dollar rose to a six-week high on Thursday (May 21) after Iran's Supreme Leader issued a directive that the country's near-weapons-grade uranium must not be sent abroad, hardening Tehran's stance and casting doubt on how close a deal is to end the Middle East war. That dampened the optimism sparked on Wednesday, when US President Donald Trump said negotiations with Iran were in the final stages.Prolonged energy disruptions as the war drags on threaten to feed through to core US consumer prices and inflation expectations, potentially pushing the Federal Reserve toward rate hikes.A stronger US growth outlook adds further weight to the case for tightening, even as other economies face a weaker trajectory and greater exposure to elevated energy costs.“We’re almost three months from the start of the oil shock and typically that's when global growth starts to see a bit of a deterioration, so we're a bit hesitant on global growth exposed currencies,” said Noah Buffam, director in FICC strategy at CIBC Capital Markets in Toronto.