EUR/USD, GBP/USD Rally as Iran Deal Hopes Crush Oil and Weigh on USD

EUR/USD and GBP/USD are pushing higher as the US dollar weakens broadly, driven by growing optimism surrounding a potential Iran nuclear deal that has sent oil prices sharply lower. Brent crude futures have been heavily sold off on expectations that a deal could bring significant Iranian oil supply back onto global markets, reducing energy costs and easing inflationary pressures. The weaker oil backdrop is undermining the dollar's safe-haven appeal while simultaneously benefiting European currencies, as lower energy import costs improve the eurozone and UK trade balances. US 2-year Treasury yields are also under pressure, reflecting shifting expectations for Federal Reserve policy as disinflationary forces from cheaper energy gain traction. EUR/USD is testing key resistance levels, with a sustained break higher potentially opening the door toward further gains. GBP/USD is similarly well-bid, supported by improved risk appetite. Traders should remain cautious, as Iranian officials have emphasized that a final deal is not yet secured, meaning sharp reversals remain possible on any negative headline developments.