Dollar Softens as US-Iran Tensions Ease, Oil Prices Plummet

The US dollar softened on Monday as tensions between the United States and Iran eased, leading to a decline in oil prices. The temporary halt in hostilities reduced demand for safe-haven assets like the dollar.

The US Dollar Index (DXY) fell slightly to around 101.40 as investors prepared for the Federal Reserve's two-day monetary-policy meeting. Markets largely expect the Fed to maintain its target range at 3.50%-3.75%, but there is still a possibility of an interest rate increase due to persistent inflation concerns.

The West Texas Intermediate (WTI) oil price plummeted over 7% to approximately $82.30 per barrel as hopes of diplomatic progress grew. The developments reduced immediate concerns about supply disruptions through the Strait of Hormuz.