USD Weakens on Trump Rate Cut Stance; Iran Nuclear Tensions Rise

The US Dollar index has shown weakness following signals that incoming President Trump may push for aggressive rate cuts, potentially pressuring the Federal Reserve's monetary policy independence. Iran's rejection of International Atomic Energy Agency nuclear site inspections following reported June 2025 bombings has escalated Middle East geopolitical tensions, typically supporting safe-haven flows into USD and JPY. However, Trump's dovish stance on monetary policy appears to be outweighing geopolitical concerns for now. The ECB faces challenges from both regional instability and potential US policy shifts, keeping EUR/USD under pressure. Market participants are closely monitoring how these developments affect major currency pairs, with USD/JPY likely to see increased volatility as both currencies compete for safe-haven demand. Technical levels show USD index testing support at 104.50, while resistance remains at 105.80.