Investor optimism over a potential US-Iran agreement weighs on the US Dollar and crude oil prices early Wednesday.
The US Dollar weakened against major currencies as risk flows dominated markets amid hopes for a diplomatic resolution to Middle East tensions. The USD was the weakest against the Australian Dollar in weekly performance, reflecting broader risk-on sentiment.
Crude oil prices dropped sharply on Tuesday, with West Texas Intermediate (WTI) falling nearly 6% before stabilizing at $74 early Wednesday. Brent crude slid below $80 after reports suggested a possible US-Iran deal to reopen the Strait of Hormuz, a key oil transit route. Strategists linked the decline to comments from US officials hinting at an imminent agreement.
Later in the day, US private sector employment data and the ISM Services PMI for July will be released, potentially influencing market movements further.