USD Steadies as US-Iran Ceasefire Talks in Pakistan Keep Markets on Edge

The US dollar is trading in a cautious range as forex markets digest the high-stakes US-Iran negotiations taking place in Pakistan following a two-week ceasefire agreement. Mixed messages throughout the week have kept traders from establishing firm directional positions, with risk sentiment hanging in the balance. The outcome of these talks could significantly impact oil prices, which in turn would ripple through commodity-linked currencies such as USD/CAD and AUD/USD. A positive resolution could ease geopolitical risk premiums, potentially weakening safe-haven demand for the USD, JPY, and CHF, while boosting risk-on currencies like AUD and NZD. Conversely, a breakdown in talks would likely trigger a flight to safety, strengthening the dollar and yen. Oil-sensitive pairs remain particularly vulnerable, with USD/CAD hovering near key levels as crude prices remain volatile. Traders are advised to exercise caution and manage position sizes carefully heading into the weekend, as headline risk from the negotiations could trigger sharp, unpredictable moves across major pairs.