Dollar Slumps as US Pauses Strikes in Iran, Oil Prices Plummet

The dollar index fell on Monday as the US paused its bombing campaign in Iran, easing tensions and pressuring oil prices. Oil prices dropped sharply, with Brent crude tumbling 4.7% to $92.19.

The U.S. military temporarily halted its two-week long strikes, and Iran will halt its own attacks as long as the US does the same, a senior Iranian official told Reuters on Sunday. This move has boosted global investor confidence and lifted market sentiment.

The dollar index (.DXY) slipped 0.25% to 101.23 at the start of a week packed with central bank meetings, including that of the Federal Reserve. 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.