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Dollar drifts lower as oil prices and bond yields ease on Iran deal hope

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Forex Market 

Dollar drifts lower as oil prices and bond yields ease on Iran deal hope

The US dollar traded softer overnight as investor sentiment improved on growing hopes of a potential peace agreement between the US and Iran. Oil prices fell sharply, with Brent crude slipping back below US$100 per barrel, while US Treasury yields also moved lower as markets scaled back fears of prolonged inflation pressures tied to elevated energy costs. Risk-sensitive assets strengthened, equities rallied across major markets and safe-haven demand for the greenback eased amid expectations that any reopening of the Strait of Hormuz could help stabilise global supply chains and energy markets.
Despite the improved mood across financial markets, uncertainty remains high as negotiations between Washington and Tehran continue. Notes that while markets have welcomed signs of progress, there is still limited clarity on how quickly oil flows through the Strait of Hormuz could normalise even if a formal agreement is reached. Elevated geopolitical risks, lingering supply disruptions and still-high energy prices are expected to keep inflation concerns alive in the near term. Attention now turns to upcoming economic data and central bank commentary, with traders closely watching whether easing oil prices and lower bond yields will provide more support for risk assets and non-US currencies over the coming weeks.

General Market

Wall Street

  • Dow Jones: +0.58% to 50,585
  • S&P 500: +0.37% to 7,473
  • Nasdaq: –0.20% to 29,756
Asia-Pacific
  • ASX 200: -0.34% to 8,680
  • Nikkei: –1.28% to 64,646
  • Shanghai Composite: +0.97% to 4,772
Europe
  • FTSE: +0.61% to 10,511
  • DAX: +1.15% to 25,389
  • CAC: -0.74% to 8,089

Headlines to Watch

United States

  • Consumer confidence → signals strength of household spending
  • Bond yields easing → markets reassessing Fed tightening risks
  • Oil price declines → reducing near-term inflation pressure

Europe

  • Eurozone sentiment surveys → growth outlook remains fragile
  • ECB policy expectations → rate path increasingly data dependent
  • Energy stability → key for inflation moderation across the bloc

Asia-Pacific

  • Australia CPI → major driver for RBA expectations and AUD volatility
  • RBNZ decision → focus on policy tone and inflation outlook
  • Japan services inflation → implications for future BoJ tightening

Global / Geopolitics

  • US-Iran negotiations → markets watching Strait of Hormuz developments
  • Oil market volatility → key driver of inflation and FX sentiment
  • Risk appetite improving → safe-haven USD demand moderating
Currency Pair Mid-market Rate
AUD/USD 0.7165
AUD/NZD 1.2237
AUD/JPY 113.93
AUD/CNY 4.8626
AUD/EUR 0.6159
AUD/GBP 0.5312
AUD/HKD 5.6144

 

 

 

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