USD Weakens as US-Iran Truce Sends WTI Crude Below $64

A dramatic geopolitical shift is reshaping forex markets on Monday as the United States and Iran agreed to halt military strikes after five months of conflict, sending WTI crude oil prices sharply below $64 per barrel. The de-escalation has triggered a significant risk-on move across global markets, lifting equities and risk-sensitive currencies while undermining the US dollar's safe-haven premium. The collapse in crude prices also eases inflationary pressures, potentially reducing the urgency for the Federal Reserve to maintain an aggressively hawkish stance — a notable reversal from last week's rate hike expectations. Traders are now recalibrating positions ahead of key central bank decisions scheduled for this week, which will be critical in determining the next directional move for major currency pairs. Commodity-linked currencies such as the Canadian dollar face mixed signals, as lower oil prices typically weigh on CAD despite the broader risk-positive environment. Near-term, market focus will center on whether the ceasefire holds and how central banks respond to the rapidly shifting macroeconomic backdrop.