USD weakens as Israel-Iran ceasefire eases geopolitical tensions

The US Dollar Index has declined 0.4% to 104.20 as geopolitical tensions ease following reports of a potential Israel-Iran ceasefire, reducing safe-haven demand. Gold prices retreated 1.2% to $2,320 per ounce, while oil prices plummeted with WTI crude falling 3.5% to $78.40 per barrel. The risk-on sentiment has benefited higher-yielding currencies, with AUD/USD gaining 0.6% to 0.6580 and NZD/USD advancing 0.5% to 0.6120. EUR/USD rose 0.3% to 1.0845, while USD/JPY climbed 0.2% to 156.80 as traders unwound defensive positions. Market participants are now shifting focus to upcoming Federal Reserve communications and key economic data releases this week. Technical indicators suggest the dollar index could test support at 104.00, with resistance at 104.75. The reduced geopolitical premium in commodities may ease inflationary pressures, potentially influencing central bank policy decisions.