USD Mixed as Oil Drops Sharply; Stocks Diverge, Bonds Steady

The US dollar traded mixed against major pairs during Monday's session as sharp declines in crude oil failed to trigger a broader risk-off move across asset classes. Crude oil futures settled at $82.61, posting a significant decline, yet US equities showed resilience with the Dow closing higher, the S&P 500 finishing flat, and the Nasdaq edging modestly lower. The US Treasury conducted major auctions, selling $69 billion in 2-year notes and $70 billion in 5-year notes at high yields of 4.408% for the 5-year, reflecting continued elevated rate expectations. Geopolitical risks intensified as reports emerged of a potential limited US ground operation in Iran, with President Trump stating he has 'plenty of time' on Iran while emphasizing that negotiations must move quickly or not happen at all. The divergence between falling oil prices and a relatively stable dollar suggests markets are weighing competing forces of geopolitical risk premiums against softening commodity demand signals. Traders should monitor further developments on Iran tensions and upcoming Treasury supply for near-term USD direction.