The dollar index fell to 97.7 on Wednesday, returning to pre-war levels, as growing optimism over a potential resolution to the conflict with Iran weighed on the currency. Hopes of a deal triggered a sharp drop in oil prices, helping to ease inflation concerns. Axios reported that the White House believes it is close to reaching an agreement with Iran on a preliminary memorandum of understanding to halt the war and pave the way for more detailed nuclear negotiations, citing US officials and other sources. In addition, the US said its offensive operations against Iran had concluded and announced a temporary pause in “Project Freedom.” The decline in oil prices further reduced fears of renewed inflationary pressures, pressuring the greenback across major currencies. Meanwhile, the yen outperformed, strengthening more sharply amid renewed speculation of possible intervention by Japanese authorities.