Dollar set for weekly drop ahead of US-Iran peace talks

The dollar on Friday was heading for its largest weekly drop since January as other currencies gained on optimism that a ceasefire in the Gulf will hold and oil shipping will resume. Further direction for markets is likely to ​hang on the outcome of weekend talks between the US and Iran in Islamabad. The dollar had towered in ‌March as one of the few bastions of safety as the US and Israeli war on Iran sent oil prices rocketing, hit stocks and gold and inflation worries sank bonds. But since a shaky ceasefire was agreed on Tuesday those positions are being unwound, with the U.S. dollar index losing 1.3% ​so far this week. The euro has rallied through its 200-day moving average this week to trade at $1.1690, a break ​of chart resistance that opens the way to further gains. The risk-sensitive Australian and New Zealand dollars are ⁠looking at weekly rises of nearly 3% on the dollar, with the Aussie trading just above 70 cents and the kiwi ​at $0.5847.