Oil Plunges on US-Iran Deal Progress, USD Watches Geopolitical Shift

Global markets are recalibrating as a potential US-Iran memorandum of understanding edges closer to finalization, with reports suggesting a signing could occur as soon as Sunday in Geneva. Oil prices have plunged sharply after Iran confirmed details of a deal framework with the US, though Iran's IRNA agency noted the country will not restore Strait of Hormuz status to pre-war levels, adding complexity to the geopolitical picture. The ECB's Nagel reiterated that policymakers are keeping all options open, maintaining a flexible stance on monetary policy. European equity markets traded with a cautious tone as traders positioned ahead of the Wall Street open, with attention also drawn to SpaceX's market debut. The sharp decline in crude oil prices could weigh on commodity-linked currencies such as CAD and NOK while potentially easing inflationary pressures globally, giving central banks more room for dovish pivots. Traders should monitor headline risk closely as negotiations remain fluid and the MoU draft is reportedly not yet finalized.