The US dollar weakened against major currencies on Monday as hopes grew for an agreement that could reopen the Strait of Hormuz, pushing oil prices below $100 per barrel, despite both the United States and Iran downplaying the chances of an imminent deal.

At the same time, several major global markets, including the United States, Hong Kong, the United Kingdom, and much of Europe, were closed for holidays, leading to thinner market liquidity.

Against the Japanese yen, the dollar fell 0.2% to 158.94 yen, while the euro rose 0.31% to $1.11639 and the British pound gained 0.42% to $1.34865.

The Australian dollar also climbed 0.5% to $0.7162, while the New Zealand dollar rose 0.37% to $0.58685.

Meanwhile, the US Dollar Index slipped around 0.2% to 99.059 points.

As diplomatic efforts to resolve the war with Iran continued, US Secretary of State Marco Rubio said the United States would either reach a good agreement or deal with Iran “in another way.”

For his part, the spokesperson for Iran’s Foreign Ministry said both sides had reached conclusions on several issues included in the potential memorandum of understanding with Washington, but stressed that this did not mean Tehran was close to signing an agreement.

Oil markets declined on hopes of a peace deal, with Brent Crude falling 4.5% to $98.9 per barrel, while West Texas Intermediate dropped 4.4% to $88.98 per barrel.

Over the weekend, conflicting signals emerged regarding the peace agreement. President Donald Trump said on social media Saturday that a memorandum for a peace agreement with Iran had been “largely negotiated,” while both countries and mediators in Pakistan reported progress.

However, Trump later stated Sunday on Truth Social that the US blockade on Iranian vessels in the Strait of Hormuz “will remain fully in place until an agreement is reached, ratified, and signed.”

Chris Weston said markets had become accustomed to being patient while waiting for a tangible breakthrough, but noted that the base-case scenario still points toward an eventual agreement.

He added that Brent crude falling toward $90 per barrel could provide another boost to risk assets, alongside easing short-term inflation expectations and lower bets on interest rate hikes in 2027.

In Europe, Yannis Stournaras said Monday that if eurozone inflation exceeds the European Central Bank’s target significantly, even temporarily, policymakers should consider a cautious shift toward tighter monetary policy.

Investors are also watching several important economic releases this week, including the US employment report from ADP on Tuesday and eurozone confidence surveys on Thursday.

Gold prices rose by more than 1.5% in European trading on Monday and were on track to record their highest levels in several weeks, supported by a weaker US dollar and falling global oil prices, amid a major breakthrough in peace negotiations between the United States and Iran.

Lower oil prices are easing concerns about accelerating inflation, potentially giving major central banks more room to keep interest rates unchanged in the near term, while expectations for future rate cuts continue to grow.

Price Overview

• Gold prices today:

Gold prices climbed more than 1.5% to $4,580.00 per ounce, from an opening level of $4,509.51. The session low was also recorded at $4,509.51.

• At Friday’s settlement, gold prices lost 0.75%, marking their second consecutive daily decline, pressured by a stronger US dollar and rising global oil prices.

• Gold lost around 0.7% last week, recording a second straight weekly decline due to rising long-term US Treasury yields.

US Dollar

The US Dollar Index fell around 0.4% on Monday, moving further away from a six-week high of 99.52 points and heading toward its first loss in the past three sessions, reflecting broad weakness in the US currency against a basket of major and minor currencies.

As is well known, a weaker dollar makes gold priced in US currency more attractive to holders of other currencies.

Beyond profit-taking activity, the dollar weakened as investor risk appetite improved, amid rising optimism that the United States and Iran are nearing a peace agreement that could end the war in the Middle East.

Global Oil Prices

Oil prices fell by more than 6% at the start of the week, reaching their lowest levels in three weeks, as fears over supply disruptions from the Arabian Gulf eased amid increasing expectations that the Strait of Hormuz could soon reopen to oil tankers.

Latest Developments in the Iran War

• The United States and Iran are reportedly close to reaching a final agreement framework to end the war in the Middle East.

• Trump said that “a large part” of the draft agreement had already been negotiated, though not fully finalized, adding that “time is on Washington’s side” to secure a “good and suitable” deal.

• Sources said the agreement framework includes extending the ceasefire for 60 days, allowing negotiators time to finalize the detailed terms required to permanently end the conflict.

• The agreement also reportedly includes reopening the Strait of Hormuz, ending the US naval blockade on Iranian ports, and allowing Iran to sell oil under specific exemptions.

• Sources added that several contentious issues remain unresolved, including oversight of the Strait of Hormuz, Iran’s complete surrender of highly enriched uranium, and the release of frozen Iranian assets.

• US officials said the agreement would not be signed on Monday and that final approvals could still take several days.

• Tasnim News Agency warned that the draft agreement could collapse due to disagreements over frozen Iranian assets.

US Interest Rates

• Kevin Warsh was officially sworn in as Chair of the Federal Reserve on Friday.

• According to the CME Group’s FedWatch Tool, markets are currently pricing in a 52% probability of a Federal Reserve rate hike in December, compared with just over 16% at the beginning of May.

• Markets are also pricing a 100% probability that US interest rates will remain unchanged at the June meeting, while the probability of a 25 basis point rate cut stands at zero.

• Investors are closely monitoring upcoming US economic data and comments from Federal Reserve officials to reassess those expectations.

Gold Outlook

KCM Trade chief market analyst Tim Waterer said Trump’s remarks had increased market hopes for some type of agreement with Iran that could lead to the reopening of the Strait of Hormuz.

He added that this possibility negatively impacted oil prices and, in turn, provided positive support for gold from an inflation perspective.

SPDR Gold Trust

Gold holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell by around 2.85 metric tons on Friday, bringing total holdings down to 1,034.85 metric tons, the lowest level since May 8.

The euro rose in European trading on Monday against a basket of global currencies, beginning to recover from six-week lows against the US dollar and heading toward its first gain in the past three sessions, supported by buying activity from lower levels.

The single currency also benefited from a slowdown in the US dollar and a sharp decline in global oil prices, amid positive developments in peace talks between the United States and Iran and growing expectations for the reopening of the Strait of Hormuz.

With oil prices falling and inflationary pressures easing, market pricing for a June interest rate hike by the European Central Bank declined, while investors await additional economic data from the eurozone to reassess those expectations.

Price Overview

• Euro exchange rate today:

The euro rose against the dollar by 0.4% to $1.1649, compared to Friday’s closing level of $1.1602. The pair recorded an intraday low of $1.1628.

• The euro ended Friday down around 0.15% against the dollar, marking its second consecutive daily loss, after touching a six-week low of $1.1576 during the previous session.

• Last week, the euro lost 0.2% against the dollar, recording a second straight weekly decline due to rising US Treasury yields.

US Dollar

The US Dollar Index fell around 0.4% on Monday, pulling further away from a six-week high of 99.52 points and heading toward its first loss in the past three sessions, reflecting broad weakness in the US currency against a basket of global currencies.

Beyond profit-taking activity, the dollar weakened as market risk appetite improved, driven by rising optimism that the United States and Iran are close to reaching a peace agreement that could end the war in the Middle East.

Global Oil Prices

Oil prices fell by more than 6% at the start of the week, hitting their lowest levels in three weeks, as fears over supply disruptions from the Arabian Gulf eased amid increasing expectations that the Strait of Hormuz could soon reopen to oil tankers.

Latest Developments in the Iran War

• The United States and Iran are reportedly close to reaching a final agreement framework to end the war in the Middle East.

• Trump said that “a large part” of the draft agreement had already been negotiated, though not fully finalized, adding that “time is on Washington’s side” to secure a “good and suitable” deal.

• Sources said the proposed agreement includes extending the ceasefire for 60 days, allowing negotiators time to finalize the detailed terms required to permanently end the conflict.

• The agreement also reportedly includes reopening the Strait of Hormuz, ending the US naval blockade on Iranian ports, and allowing Iran to sell oil under specific exemptions.

• Sources added that several contentious issues remain unresolved, including oversight of the Strait of Hormuz, Iran’s complete surrender of highly enriched uranium, and the release of frozen Iranian assets.

• US officials said the agreement would not be signed on Monday and that final approvals could still take several days.

• Tasnim News Agency warned that the draft agreement could collapse due to disagreements over frozen Iranian assets.

European Interest Rates

• Sources told Reuters last week that the European Central Bank is highly likely to raise interest rates in June, given inflation expectations that are moving toward an undesirable scenario.

• However, with global oil prices falling, money markets reduced pricing for a 25 basis point ECB rate hike in June from 70% to 55%.

• Investors are now awaiting further eurozone economic data on inflation, unemployment, and wages to reassess those expectations.

The Japanese yen rose in Asian trading on Monday against a basket of major and minor currencies, attempting to recover from a three-week low against the US dollar and heading toward its first gain in the past three sessions, supported by buying activity from lower levels.

The yen also benefited from a slowdown in the US dollar and a sharp decline in global oil prices, amid growing optimism that the United States and Iran are nearing a peace agreement.

At the same time, easing inflationary pressures on policymakers at the Bank of Japan reduced expectations for an interest rate hike in June, as investors await additional economic data from the world’s fourth-largest economy.

Price Overview

• Japanese yen exchange rate today:

The dollar fell against the yen by around 0.3% to 158.75 yen, compared to Friday’s closing level of 159.18 yen. The pair recorded an intraday high of 158.96 yen.

• The yen ended Friday down around 0.2% against the dollar, marking its second consecutive daily loss, after touching a three-week low of 159.34 yen during the previous session.

• Last week, the yen lost 0.3% against the dollar, recording a second straight weekly decline amid continued inflation data pointing to easing price pressures on the Japanese central bank.

US Dollar

The US Dollar Index fell around 0.4% on Monday, pulling back from a six-week high of 99.52 points and heading toward its first loss in the past three sessions, reflecting broad weakness in the US currency against a basket of global currencies.

Beyond profit-taking activity, the dollar weakened as market risk appetite improved, driven by growing hopes that the United States and Iran are close to reaching a peace agreement that could end the war in the Middle East.

Global Oil Prices

Oil prices dropped by more than 6% at the start of the week, reaching their lowest levels in three weeks, as fears over supply disruptions from the Arabian Gulf eased amid rising expectations that the Strait of Hormuz could soon reopen to oil tankers.

Latest Developments in the Iran War

• The United States and Iran are reportedly nearing a final agreement framework to end the war in the Middle East.

• Trump said that “a large part” of the draft agreement had already been negotiated, though not fully finalized, adding that “time is on Washington’s side” to secure a “good and suitable” deal.

• Sources said the agreement framework includes extending the ceasefire for 60 days, giving negotiators time to finalize the detailed terms required to permanently end the conflict.

• The agreement also reportedly includes reopening the Strait of Hormuz, ending the US naval blockade on Iranian ports, and allowing Iran to sell oil under specific exemptions.

• Sources added that several contentious issues remain unresolved, including oversight of the Strait of Hormuz, Iran’s complete surrender of highly enriched uranium, and the release of frozen Iranian assets.

• US officials said the agreement would not be signed on Monday and that final approvals could still take several days.

• Tasnim News Agency warned that the draft agreement could collapse due to disagreements over frozen Iranian assets.

Japanese Interest Rates

• Amid falling oil prices and slowing inflationary pressures, market pricing for a quarter-point interest rate hike by the Bank of Japan at its June meeting declined from 70% to 55%.

• Investors are now awaiting additional Japanese data on inflation, unemployment, and wages to reassess those expectations.