Dollar holds narrow range as traders watch U.S.-Iran peace talks

The dollar traded in a narrow range on Tuesday as currency markets watched U.S.-Iran peace talks and the risk of wider disruption in the Middle East.

Traders also kept a close eye on the yen, which hovered near the 160 per dollar level widely seen as a possible trigger for Japanese intervention.

Reuters reported that investors were weighing the chance of progress in talks involving Iran and the security of the Strait of Hormuz, a key oil shipping route that can quickly affect broader risk sentiment. Separate AP reporting said U.S. Secretary of State Marco Rubio remained optimistic about eventual nuclear talks, even as the diplomatic path stayed uncertain.

Japanese Finance Minister Satsuki Katayama said authorities were ready to respond in the currency market as needed, reinforcing expectations that officials could step in if the yen weakens further.

The latest moves leave the dollar in a cautious holding pattern, with markets waiting for either a diplomatic breakthrough or a sharper escalation to force a clearer direction.

What traders are watching

Markets are focused on whether U.S.-Iran negotiations produce a concrete statement or any sign of progress. A failure in talks could renew safe-haven demand and amplify volatility in currencies and energy markets.

At the same time, traders are monitoring whether the yen will test or break decisively above 160 per dollar, a level that has drawn repeated attention from Japanese officials.