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Dollar eases as US-Iran diplomatic talks resume hopes lift risk mood

The US Dollar Index stayed below 100.00, while WTI traded around $78 after dropping more than 8% on the day.

Reported · Written up by our desk · Major Pairs

FXStreet reports that market sentiment improved at the start of the week as the United States and Iran renewed efforts toward a diplomatic solution. President Donald Trump said he had held off a planned “massive attack” and that negotiations with Iran would resume on Monday, with Iranian President Masoud Pezeshkian urging the US to remain committed to the June memorandum of understanding.

Against that backdrop, the US Dollar weakened versus major currencies, with the yen noted as the strongest of the listed majors over the prior seven days. The US Dollar Index also remained below 100.00 after losing more than 1.5% in the previous week, and US stock index futures were up between 0.5% and 0.8%.

Crude moved sharply lower on the de-escalation, with FXStreet noting WTI opened with a large bearish gap and was last around $78, down more than 8% for the day. Analysts at Danske Bank pointed to a sharp pullback in Brent tied to signs of easing in the US-Iran confrontation.

On the rate outlook, FXStreet said recent comments from Federal Reserve officials did not support the dollar. It highlighted Dallas Fed President Lorie Logan’s more hawkish tone on Friday, with an FXS Speechtracker score of 8.7/10, indicating a stronger tightening bias, while the broader day’s focus remained on the renewed talks and upcoming US ISM manufacturing PMI data for July.

Latest closeWTI crude $86.80 ▲3.8%|Brent $90.12 ▲1.2%|Dollar index 99.80 ▼0.2%

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