USD faces pressure as M&A activity and commodity volatility reshape FX markets

The US dollar is experiencing broad weakness across major pairs as significant M&A activity and commodity market swings drive capital flows away from the greenback. EUR/USD has pushed above 1.0900, gaining 0.45% amid European corporate acquisition interest, while GBP/USD tested 1.2750 resistance levels. Commodity-linked currencies are showing mixed performance, with AUD/USD climbing 0.6% to 0.6580 on iron ore strength, while USD/CAD rose to 1.3450 as oil prices retreated 2.3%. The surge in cross-border M&A transactions is creating substantial currency hedging flows, particularly benefiting the euro and sterling. Technical indicators suggest the dollar index (DXY) has broken below its 50-day moving average at 104.20, signaling potential further weakness. Traders are closely monitoring geopolitical developments that could amplify currency volatility, with immediate support for EUR/USD at 1.0880 and resistance at 1.0950.