USD Strengthens as US Stocks Hit Record Highs on US-Iran Deal Optimism

The US dollar is firming broadly as risk appetite surges, with the S&P 500 gaining 0.44% and the Nasdaq Composite rising 0.58% to fresh all-time highs. The primary catalyst is an Axios report indicating that US and Iranian negotiators have reached an agreement on a 60-day memorandum of understanding to extend a ceasefire and begin negotiations on Iran's nuclear program, though President Trump has yet to give final approval. The geopolitical implications are significant for forex markets, particularly through the Strait of Hormuz — a critical chokepoint for global oil supply. Reduced tensions in the region ease energy supply concerns, which tends to weigh on oil prices and support risk-on currencies like the US dollar while pressuring safe havens such as the Japanese yen and Swiss franc. Pairs like USD/JPY and USD/CHF may see upward pressure as risk sentiment improves. Traders should monitor confirmation of the deal and any shifts in crude oil pricing, as failure to finalize the agreement could quickly reverse current risk-on positioning.