Risk currencies surge as oil plunges 3.5% on Middle East ceasefire

Equity markets have rebounded strongly with the Nasdaq 100 gaining 1.8% as the Israel-Iran ceasefire announcement triggered a massive selloff in oil prices, with WTI crude plummeting 3.5% to $78.40 per barrel. The risk-on environment has boosted commodity currencies, with AUD/USD jumping 0.6% to 0.6580 and NZD/USD climbing 0.5% to 0.6120. USD/JPY advanced 0.2% to 156.80 as traders unwound yen safe-haven positions. The sharp decline in oil prices is expected to ease inflationary pressures globally, potentially reducing the need for aggressive central bank tightening. Technical indicators show AUD/USD breaking above the 0.6550 resistance level, targeting 0.6600 next. The improved risk sentiment has also supported emerging market currencies, with several Asian pairs gaining against the dollar. Traders should monitor whether the peace agreement holds, as any breakdown could quickly reverse current market dynamics.