US Dollar Weakens on US-Iran Peace Deal but Supported by Hawkish Fed Outlook

The US Dollar (USD) traded on the back foot against major peers on Monday as market sentiment improved following a framework peace agreement between the United States and Iran. Traders trimmed safe-haven positions on the news, weighing on the greenback.

However, the dollar remained supported by a hawkish outlook from the Federal Reserve, which continues to underpin expectations of higher interest rates for longer. The net effect kept the USD in a mixed position as markets assessed the geopolitical and monetary policy landscape.