US-Iran agreement expectations lift risk sentiment, pressuring the USD against EUR, GBP, and AUD while supporting CAD and JPY.
The US dollar closed mixed on Monday, retreating against the EUR, GBP, CHF, and AUD but advancing versus the CAD, JPY, and NZD. Markets reacted to reports of a US-Iran framework agreement, set to be signed Friday, which includes reopening the Strait of Hormuz and lifting a US naval blockade on Iran.
Economic data showed softer-than-expected prints, with US May industrial production rising 0.1% against a 0.2% forecast and June Empire Fed at 5.7 versus 14.0 expected. Canada’s April manufacturing sales grew 4.2%, slightly below the 4.5% estimate, while May housing starts fell to 261.4K from 278.4K prior.
Risk assets gained traction as geopolitical tensions eased, though the dollar’s mixed performance reflected divergent reactions across currency pairs.