Risk-Positive Sentiment Boosts Markets, Weakening US Dollar

Financial markets turned risk-positive to start the week as news of halted US-Iran strikes boosted investor sentiment. This shift in mood prompted a broad move toward riskier assets, with major US stock index futures up between 0.8% and 1.4% on the day.

The US Dollar (USD) Index declined by more than 0.2%, trading near 101.20 at the time of writing. This weakness in the dollar was a key driver behind the EUR/USD currency pair's move higher, which reached the 1.14 area and is targeting further gains if risk-positive sentiment holds.

The Bank of England's upcoming monetary policy announcement on Thursday will also be closely watched by investors, particularly as the pound held its ground after a nearly 1% decline in the previous week. The key risk for GBP/USD remains a more dovish path from the BoE than expected, which could cause the currency to sell off despite USD weakness.