The U.S. dollar slipped on Friday, as investors moved away from safe havens into risk assets after the U.S. and Iran signaled more peace talks. Still, the greenback was on pace to snap a two-week losing streak, as elevated tensions in and around the critical Strait of Hormuz boosted demand for the currency.
Foreign currency market participants also observed another twist in the fight between President Donald Trump and his administration and Federal Reserve Chair Jerome Powell, after an investigation into a central bank building renovation was dropped. The move likely paves the way for Trump nominee Kevin Warsh to take over as Fed chief.
At 16:45 ET (20:45 GMT), the U.S. Dollar Index, which tracks the greenback against a basket of six major peers, was down 0.3% to 98.52. For the week, the dollar was up 0.4%.
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U.S. and Iran negotiators heading back to the table Risk appetite was boosted on Friday after signs that the U.S. and Iran were willing to talk. Iran’s foreign minister Abbas Araghchi said he was "embarking on" a "timely tour of Islamabad, Muscat, and Moscow." Iran’s state media and the Associated Press had earlier reported about the visit, though neither said anything about Araghchi meeting U.S. negotiators.
"Purpose of my visits is to closely coordinate with our partners on bilateral matters and consult on regional developments. Our neighbors are our priority," the foreign minister said on X.
White House Press Secretary Karoline Leavitt then confirmed a CNN report that U.S. Special Envoy to the Middle East Steve Witkoff and American businessman Jared Kushner will be traveling to Pakistan for more talks on Saturday morning.
"The Iranians reached out, as the president called on them to do, and asked for this in-person conversation, so the president is dispatching Steve and Jared to go hear what they have to say. And we’re hopeful that it will be a productive conversation and hopefully move the ball forward towards a deal," Leavitt told Fox News.
Later, Trump told Reuters that Iran was planning on making an offer that would satisfy U.S. demands, adding that he did not know what the offer would be yet.
The move to return to the negotiating table came after Trump on Thursday announced a ceasefire extension between Israel and Lebanon.
Investigation into Fed dropped In Friday’s other notable development, Jeanine Pirro, U.S. Attorney for the District of Columbia, on Friday said she had asked her office to close its investigation into the Fed’s renovation project at its Washington headquarters.
Trump, who was been a long-time critic of Powell, has said that the building costs have overrun $4 billion.
"This morning the Inspector General for the Federal Reserve has been asked to scrutinize the building costs overruns – in the billions of dollars – that have been borne by taxpayers," Pirro said on X.
