FX.co ★ Dollar Falls on US-Iran Peace Deal

The dollar index slipped to around 99.5 on Monday, its lowest level in more than a week, after the United States and Iran reached a peace agreement that will restore access through the Strait of Hormuz, reducing demand for the dollar as a safe-haven asset. The announcement also sent oil prices to a two-month low, easing concerns about stronger inflation and tighter monetary policy. The agreement, which is expected to be signed in Switzerland on June 19, reportedly includes lifting blockades, relaxing sanctions on Iran, and dismantling Tehran’s nuclear program. Investors are now focusing on the US Federal Reserve’s first policy meeting under its new chair, Kevin Warsh, with markets widely expecting interest rates to remain unchanged. The Reserve Bank of Australia and the Bank of England are also expected to leave policy on hold this week, while the Bank of Japan is forecast to raise interest rates in an effort to support its currency.