The US Dollar Index was down marginally to 99.98

The U.S. dollar weakened slightly on Monday, after Iran rejected a ceasefire proposal and President Donald Trump ramped up threats against the country.

At 21:51 GMT, the US Dollar Index was down marginally to 99.98.

The euro was largely flat amid a holiday in most European markets for Easter Monday. The Japanese yen USD/JPY was little changed at 159.69.

De-escalation hopes boosted U.S. equities on Monday.

Both the U.S. and Iran have received a framework of a plan to halt hostilities, although Tehran has rebuffed any immediate reopening of the Strait of Hormuz.

Iran’s state media said the country had conveyed its response to the proposal, rejecting a ceasefire and instead emphasizing the necessity of a “permanent end” to the war.

Iran’s response consists of 10 clauses, state media said, including protocol for safe passage through the critical Strait of Hormuz and the lifting of sanctions.

Axios first reported on Sunday that the U.S., Iran and mediators were discussing a potential 45-day ceasefire as part of a two-phase deal that could lead to a permanent end to the war, citing sources.

The dollar has become a relative safe haven for investors during the ongoing Middle East crisis, powering a steep climb in the dollar since the start of the war in late February.

Trackers of the U.S. dollar also digested a much stronger-than-expected March nonfarm payrolls report, published on the Good Friday holiday.

In the U.S., the spotlight will now turn to inflation, with an update arriving this week in the form of the March consumer price index (CPI) report scheduled for Friday. Crucially, the period will include the Middle East war, giving market participants a chance to see the effects of surging oil prices.