US Dollar Weakens as Iran-US Peace Talks Lower Oil Prices

The U.S. dollar weakened on Tuesday following a sharp decline in oil prices. Brent crude futures dropped more than 7 percent on Monday, marking the steepest single-day decline in months, after reports emerged that the Government of the United States and the Government of Iran are continuing diplomatic contacts to end an eight-month war.

This slump in energy costs eased inflation concerns and lowered longer-dated U.S. Treasury yields. However, the dollar found partial support from safe-haven demand triggered by tensions surrounding U.S. midterm elections and a downturn in AI-driven stock markets.

Global financial markets remain focused on upcoming central bank policy decisions. The Reserve Bank of Australia is expected to raise its official cash rate by 25 basis points to 4.85 percent, while the Bank of England is anticipated to increase its Bank Rate to 4.0 percent.