USD Steady as US-Iran Deal Hopes Persist; ECB Rate Hike Eyed for June

The US dollar traded in a narrow range during the European session as markets digested ongoing US-Iran nuclear deal negotiations, with Iran's frozen funds emerging as the potential final sticking point. Oil prices nudged higher from overnight lows, lending mild support to commodity-linked currencies while capping USD gains. In Europe, the UK CBI retail survey showed sentiment declined at a slower pace compared to the previous two quarters, offering modest support for sterling. ECB policymaker Philip Lane hinted that market expectations for a rate hike in June are well-founded, reinforcing hawkish euro sentiment and providing a floor for EUR/USD. Japan's government maintained its assessment that the economy is recovering moderately in May, keeping USD/JPY relatively stable. The Indian Rupee recovered earlier losses on the back of lower oil prices, though risks remain from prolonged geopolitical uncertainty. Traders should monitor US-Iran developments closely, as a successful deal could weigh on oil prices and reshape risk sentiment across FX markets. Key levels for EUR/USD remain around the 1.0800-1.0900 range amid the mixed fundamental backdrop.