Oil Prices Plunge on US-Iran Deal; USD, EUR/USD React to Risk Shift

Oil prices dropped sharply during the European session as markets reacted positively to reports of a US-Iran agreement, with preparatory talks set to take place in Doha before signing a memorandum of understanding. The geopolitical de-escalation triggered a broad unwinding of risk premiums across energy and forex markets, with Brent crude falling significantly as supply disruption fears eased — highlighted by an Indian LNG tanker carrying Qatari cargo crossing the Strait of Hormuz. ECB President Lagarde welcomed the peace deal but cautioned about second-round economic effects, while ECB policymaker Nagel confirmed all options remain open for the July meeting. Policymaker Kazaks echoed the data-dependent stance. Israel's declaration that it is not bound by the Lebanon ceasefire clause adds a layer of geopolitical uncertainty. For forex traders, the risk-on environment supports commodity-linked currencies while safe havens face pressure. Traders should monitor follow-through on the MOU deal and ECB rhetoric for near-term directional cues on EUR/USD and oil-sensitive pairs.