USD Weakens as Oil Drops Below $100 on Hormuz Transit Hopes

US equity futures rallied to session highs as crude oil prices dropped below the critical $100 per barrel level, fueled by optimism surrounding India's diplomatic efforts to secure safe transit through the Strait of Hormuz. The easing in oil prices provided relief to risk assets and shifted forex market dynamics, with the US dollar softening against commodity-linked and risk-sensitive currencies. Lower oil prices reduce imported inflation pressures for energy-dependent economies, potentially giving central banks more flexibility on monetary policy. For oil-exporting nations' currencies such as the Canadian dollar and Norwegian krone, the decline in crude represents a headwind, while energy importers like Japan and the Eurozone stand to benefit from reduced input costs. The USD/CAD pair may see upward pressure as falling oil weighs on the loonie, while EUR/USD could find support from improved Eurozone growth prospects. Traders should watch for confirmation of Hormuz transit agreements and OPEC+ responses. Key resistance for crude oil sits near $102, with support at $96 if bearish momentum continues.