The US Dollar Index fell below 102.00 amid lower Treasury yields and US-Iran deal speculation, while EUR/USD challenged 1.1200 and WTI crude oil flirted with multi-week lows below $87.00.
Front-month December WTI futures are flirting with multi-week troughs below $87.00 per barrel, reversing two daily gains, as speculation of a probable US-Iran agreement revives. Such a deal would weigh on crude by easing supply concerns around the Hormuz conflict. API weekly crude inventory data are also due.
The Dollar Index has returned to the sub-102.00 region amid a slight decline in US Treasury yields across the curve, fading Friday's strong advance. Renewed speculation over a probable US-Iran agreement is weighing on the dollar indirectly via oil and risk sentiment. Investors remain cautious ahead of US inflation data, which could reverse the move either way.
EUR/USD has ended two straight daily declines and is challenging the key 1.1200 barrier as the dollar softens and Treasury yields slip. A weaker dollar index directly lifts this pair. The move's durability depends on the upcoming US inflation print, and ECB speakers Cipollone and Lane are the only domestic events.
USD/JPY has broken below the 158.00 barrier and extended its multi-day consolidative theme, tracking the dollar's offered stance. Japanese data this week include Household Spending, Current Account, Bank Lending and the Eco Watchers Survey. The break below a round-number barrier supports further downside near term.
Gold has climbed to two-day highs north of $4,100 per troy ounce, supported by the weaker dollar, declining US Treasury yields across the curve and another negative day for crude. Falling yields and a soft dollar directly reduce the opportunity cost of holding gold. The gains are moderate and tied to the dollar's fade, so a US inflation surprise is the key risk.
The US Dollar Index retreated below 102.00 on Monday as Treasury yields declined and speculation regarding a US-Iran agreement weighed on sentiment. Investors are now focused on upcoming US inflation data, while gold prices climbed above $4,100 per troy ounce.
Markets are pricing rising odds of a US-Iran agreement, which would ease supply worries tied to the Hormuz conflict, pushing WTI back toward multi-week lows below $87.00.
It is fading Friday's advance, pressured by lower US Treasury yields and renewed hopes of a US-Iran agreement, with traders cautious ahead of US inflation data.
The pair is challenging the key 1.1200 barrier after two daily losses, helped by a weaker dollar.
It has dropped below 158.00, continuing a multi-day consolidation as the dollar comes under pressure.
A softer dollar, falling Treasury yields and weak crude are pushing gold to two-day highs above $4,100 per troy ounce.