The U.S. dollar declined following reports that the United States and Iran are discussing a new plan to end the war. The Japanese yen outperformed other G-10 currencies against the dollar, rising nearly 2% at one point, sparking speculation that Japanese authorities may have intervened in the foreign exchange market. The Bloomberg Dollar Spot Index fell 0.6%, after dropping as much as 0.9% earlier. The index closed at its lowest level since the eve of the outbreak of the Iran war on February 27. According to informed sources, Iran is evaluating a new proposal from the U.S. The one-page memorandum of understanding, if accepted, would lead to the gradual reopening of the Strait of Hormuz and the lifting of the U.S. blockade on Iranian ports. "It is too early to break out the champagne," said Win Thin, chief economist at Bank of Nassau 1982, commenting on news of the memorandum. The USD/JPY pair fell 1% to 156.36, after dropping to 155.04 during the session, fueling market speculation that Japanese authorities may have taken action to support the yen. Japan "may have decided to push USD/JPY lower, but the target is 150, not the 140 level seen in previous adjustments," said Societe Generale strategists including Frank Benzimra in a report. The EUR/USD pair rose 0.5% to 1.1749. The GBP/USD pair increased 0.4% to 1.3594.
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