The US Dollar Index edged down 0.1% to 99.78

The US dollar hovered near a six-week low on Wednesday as investors awaited the outcome of Iran-US negotiations, while the yen steadied after a sharp rebound triggered by intervention.

The US Dollar Index edged down 0.1% to 99.78 by 07:12 GMT after dropping to its lowest level in around six weeks.

Oil prices slid for a third straight session on Wednesday after Qatar said that an interim proposal had been drafted as mediators worked to narrow differences between Tehran and Washington.

An Axios report said that Washington was aiming to announce the deal on Wednesday, with the US, Iran, and Oman nearing an interim agreement to reopen the Strait of Hormuz

A risk-on environment would normally see the dollar come lower, but uncertainty about Fed policy and a healthy US economy are keeping the dollar supported, ING analysts said in a note.

DXY dollar index continues to trade near 100, which probably owes to lingering fears that the Fed might still hike on 16 September, they added.

Market attention will shift later this week to US non-farm payrolls data, which could shape expectations for the central bank’s next move.

Elsewhere, the yen’s USD/JPY pair traded largely flat at 157.7 yen, holding firm after declining sharply at the end of last week.

The move eased pressure on the currency after it had dropped to a 40-year low.

The Reserve Bank of India left its benchmark repo rate unchanged at 5.25%, citing rising inflation, international uncertainty and resilient domestic growth while retaining its neutral policy stance.

The Indian rupee extended recent gains, with the USD/INR pair declining 0.2% to 95.20 rupees, also aided by a sharp drop in crude oil prices.

The rupee has recovered around 2% from recent lows as Brent crude pulled back sharply over the past two sessions amid optimism surrounding Iran-US diplomatic efforts.