USD Weakens as War-End Optimism Lifts Risk Assets, Oil Falls Below $100

The US dollar came under broad selling pressure as futures and bonds surged on growing optimism that a geopolitical conflict may be nearing resolution, triggering a significant risk-on shift across global markets. Crude oil tumbled below the $100 per barrel mark, removing a key inflationary pillar that had been supporting hawkish central bank expectations and dollar strength. The decline in energy prices eases pressure on import-dependent economies and could prompt a reassessment of Federal Reserve rate trajectory, as lower oil prices feed into softer inflation expectations. Bond markets rallied sharply, pushing yields lower, which further undermined the greenback's yield advantage against major counterparts. EUR/USD and other dollar pairs are likely to see upward pressure as risk appetite improves and safe-haven demand for the dollar fades. Traders should monitor developments around ceasefire negotiations closely, as any reversal in sentiment could quickly restore dollar demand. Key support for the USD Index lies near recent lows, while resistance in EUR/USD and GBP/USD may be tested in the near term.