Oil Plunges as Iran Opens Strait of Hormuz; USD Weakens on War Deal Hopes

Broad market risk sentiment shifted dramatically as Iran's foreign minister confirmed the Strait of Hormuz is fully open, triggering a sharp sell-off in crude oil prices. President Trump stated he expects a US-Iran war deal 'in a day or two' and called for the US naval blockade of Iran to be halted 'very quickly.' However, a senior Iranian official cautioned that significant differences remain and serious talks are still required. Iran's Parliamentary Committee also stated uranium will not leave the country, adding complexity to negotiations. The de-escalation narrative pressured the US dollar lower as safe-haven demand unwound, benefiting risk-sensitive currencies. Oil-linked currencies such as CAD faced headwinds from the crude collapse, while JPY weakened as haven flows reversed. Trump's statement that Israel is now prohibited from bombing Lebanon further contributed to easing geopolitical risk premiums. Traders should monitor headline risk closely, as deal negotiations remain fluid and any breakdown could rapidly reverse current moves across forex and commodity markets.