United States Dollar Index (DXY) flatlines around 99.00 amid mixed news from Iran

• The US Dollar consolidates around 99.00 halfway through the weekly range.
• Contradictory news from Iran is keeping investors on edge this week.
• US PCE Price Index data, due on Thursday, might set the Greenback’s near-term direction.

The US Dollar (USD) is trading sideways against its main peers on Wednesday. The US Dollar Index (DXY), which measures the value of the Dollar against a basket of peers, flatlines around 99.00 at the time of writing, halfway through the weekly range, with investors awaiting clarity from Iran’s war.

Tehran accused the US of a grave violation of the ceasefire and vowed retaliation after attacks in southern Iran, which were considered “defensive” by US authorities. On Wednesday, Iranian officials said that these attacks validate their distrust of America and the resolution to stand firm on their demands.

Hopes of a negotiated end to the conflict, however, remain alive as Iranian leaders analyse the latest peace proposal from the US. On Wednesday, a spokesperson for the Islamic Revolutionary Guard Corps (IRGC) said that the renewal of hostilities against the US remains an unlikely option, but warned that they stand ready to react against any attack.

On the macroeconomic front, US Consumer Confidence data showed a slight deterioration in May, amid higher inflation from the war in Iran and a more pessimistic view about employment. Investors, however, are likely to await Thursday’s Personal Consumption Expenditures (PCE) Price Index figures to shed some more light on the Federal Reserve (Fed) rate path, and set the US Dollar’s near-term direction.