US Dollar Weakens as Investors Turn Risk-Positive Amid Improved Market Sentiment

The US dollar weakened on Monday as investors turned risk-positive following news that the United States and Iran had halted strikes. This shift in market sentiment prompted a broad move towards riskier assets, with major US stock index futures up between 0.8% and 1.4%. The US Dollar Index declined by more than 0.2%, trading near 101.20 at the time of writing.

The EUR/USD currency pair benefited from the improved market sentiment, opening with a bullish gap after losing about 0.6% in the previous week. The pair was last seen trading around 1.1400, with investors targeting the 1.14 area and expecting further gains if the risk-positive tone holds into the Fed week.

The GBP/USD held its ground at the beginning of the week, trading slightly below 1.3350 after losing nearly 1% during the previous week. The pair will remain in focus as investors prepare for the Bank of England's upcoming monetary policy announcement on Thursday.