Dollar Sinks as US-Iran Tensions Ease

The US dollar declined against major peers at the start of Asian trading on Monday as the US paused its bombing campaign in Iran over the weekend. This move led to a drop in oil prices and boosted investor confidence globally.

Against the yen, the US dollar fell by 0.2% to 163.585 yen, marking its biggest decline since July 10. The euro rose by 0.2% to $1.1397, while the British pound increased by a similar magnitude to $1.3353.

Oil prices plummeted in early Asian trade, with Brent crude tumbling 4.7% to $92.19 after the US military temporarily halted its two-week long strikes. Iran will halt its own attacks as long as the US does the same, a senior Iranian official told Reuters on Sunday.

The dollar index, which measures the greenback against a basket of six currencies, slipped 0.25% to 101.23. Traders have increased their bets that the Federal Reserve could raise interest rates at its upcoming policy meeting, although the overall odds are little changed from Friday.