US-Iran Ceasefire Triggers Dollar Sell-Off and Oil Price Plunge

The US dollar experienced a broad decline against all major global currencies following the announcement of a two-week ceasefire agreement between the United States and Iran. The deal has effectively dismantled the geopolitical risk premium that had previously bolstered the greenback as a primary safe-haven asset during the conflict. This shift in geopolitical tension has triggered a synchronized move across commodities and fixed income. As the immediate threat of escalation receded, investors pivoted away from defensive positions, leading to a sharp correction in energy markets and a reassessment of US monetary policy expectations. According to Bloomberg's currency gauge, the dollar slid as much as 1%, hitting a four-week low. This decline was mirrored in the energy sector, where crude oil futures plunged in response to the reduced risk of supply disruptions in the Middle East. Simultaneously, Treasury yields declined as money markets renewed wagers on a potential US interest rate cut later this year. The combination of lower yields and reduced haven demand has created a challenging environment for the dollar's short-term valuation as the market digests the implications of the truce.