USD Weakens as Global Stocks Surge and Oil Tumbles on Iran Deal

The US dollar came under broad selling pressure on Monday as global equity markets surged and oil prices tumbled following the announcement of an Iran nuclear deal. US futures posted significant gains at the open, with risk-on flows reducing demand for the safe-haven dollar. The Iran deal is expected to increase global oil supply, sending crude prices sharply lower and alleviating inflationary pressures — a development that could influence Federal Reserve rate expectations by reducing the urgency for restrictive monetary policy. Lower oil prices typically weigh on commodity-linked inflation metrics, potentially giving the Fed more room to ease. The dollar weakness benefited risk-sensitive currencies including AUD and EUR, while the drop in crude may pressure commodity currencies like CAD and NOK. Key USD support levels on the Dollar Index should be monitored closely. Traders should watch for follow-through selling in the dollar if equity gains hold into the US session, as sustained risk appetite could accelerate the greenback's decline across major pairs throughout the week.