Dollar Softens Amid Oil Price Drop and Central Bank Meetings

The US dollar traded softly against major currencies on Monday after a pause in Middle East conflict led to lower oil prices and increased risk appetite.

Brent crude futures dropped 8% to $89 a barrel, while the euro rose as much as 0.4% before paring gains to trade around flat at $1.1371.

Experts say the dollar's softer tone comes ahead of the Federal Reserve's policy meeting on July 28-29, where there's a 33% chance of a quarter-point rate hike, according to CME Group's FedWatch tool.

The Bank of England and Bank of Japan are also set to meet this week, with the BoJ expected to maintain its cautious stance on inflation despite verbal efforts to support the Japanese currency.