Dollar Slips as Middle East Hopes Grow

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On Thursday, May 7, 2026, the dollar weakened as easing Middle East tensions lifted confidence in global markets. Investors turned toward the yen and oil-linked currencies amid cautious optimism.

Dollar Falls While Yen and Euro Edge Higher

The dollar remained under pressure on Thursday after reports suggested progress toward a temporary Iran-U.S. agreement. The softer tone in global markets encouraged demand for currencies tied to improving risk sentiment.

The euro rose 0.1% to $1.1763, while sterling gained 0.13% to $1.3615. Brent crude futures traded near $98.6 a barrel, staying below recent peaks but above pre-ear levels.

“Could calm finally replace chaos?” became the key question as traders watched negotiations closely

Japan Steps Up Support for the Yen

The yen strengthened to 156.21 per dollar amid speculation that Japanese authorities intervened again to support the currency. Data indicated Japan may have spent up to 5.01 trillion yen defending the yen.

Norway’s crown also climbed after the country raised interest rates to 4.25%, while the Australian dollar advanced on stronger market confidence.