US Dollar Dips as Iran Rejects Ceasefire Amid Rising Middle East Tensions

The US dollar edged lower on Monday as geopolitical uncertainty intensified after Iran rejected a Pakistan-brokered ceasefire proposal, pushing the US Dollar Index down marginally to 99.98. The euro remained flat due to Easter Monday holidays across most of Europe, while the Japanese yen held steady at 159.69 against the dollar.

Despite the dollar's slight pullback, it has remained a preferred safe-haven currency since the Middle East conflict erupted in late February, driving significant gains for the greenback. President Trump, speaking at a White House Easter event, acknowledged that Iran had submitted a "significant" proposal but called it insufficient. He issued a firm deadline of 8:00 PM Eastern Time on Tuesday, warning that failure to reach a deal and reopen the Strait of Hormuz — a critical chokepoint for roughly one-fifth of global oil supply — would result in severe strikes on Iranian infrastructure, including power plants and bridges.

Iran's state media confirmed the country's rejection of an immediate ceasefire, instead demanding a permanent end to hostilities, the lifting of sanctions, and guaranteed passage through the Strait of Hormuz as part of a 10-clause response. A proposed 45-day ceasefire deal, first reported by Axios, remains under negotiation between the US, Iran, and regional mediators.

Meanwhile, currency markets also absorbed a surprisingly strong March jobs report. The US economy added 178,000 nonfarm payroll jobs, far exceeding analyst forecasts of 60,000. The robust data reduced pressure on the Federal Reserve to cut interest rates, lending some underlying support to the dollar. Investors now await Friday's March Consumer Price Index report, which will be the first inflation reading to reflect the impact of surging oil prices driven by the ongoing Iran conflict.