Dollar Slumps on Oil Price Drop Amid Middle East Pause
The US dollar traded lower against major currencies on Monday as oil prices plummeted following a pause in Middle East conflict. The euro rose by up to 0.4% before flattening out at $1.1371, while the yen traded about flat. Brent crude futures dropped by 8%, falling to $89 a barrel.
Benjamin Ford from Macro Hive attributed the dollar's softer tone to a modest retreat in US yields compared to other markets. He noted that USD rates have rallied less than those elsewhere.
The dollar's performance comes ahead of the Federal Reserve's policy meeting on July 28-29. Traders see a 33% chance of a quarter-point rate hike, down from 37% last week but double the previous probability.
Investors are also waiting for US second-quarter GDP data and core PCE inflation to gauge the health of the economy.