US Dollar Slumps to Multi-Week Lows on US-Iran Peace Framework

The US dollar plummeted while global risk assets surged following a landmark memorandum of understanding for peace between the United States and Iran. The US dollar index (DXY) touched its weakest level since June 5, steadying around 99.55 in Asia as traders unwound safety trades built during the Middle East conflict. This geopolitical de-escalation sparked a rally in Asian equities, particularly in Japan and South Korea, as regional markets reacted to eased inflation fears.

This downward pressure on the greenback comes amid a broader risk-on sentiment, with the Euro and Sterling gaining ground as safe-haven demand evaporated. Per market data, the reduction in geopolitical premiums coincided with improved sentiment in other regions, such as Australia’s NAB Business Confidence which rose to -14, beating forecasts of -22. Additionally, China's robust Balance of Trade surplus of 105.43 billion USD has further supported the shift toward pro-growth currencies and away from the dollar.

Investors should watch the 99.50 support level for the DXY, which was tested during the session on June 15, 2026. Looking ahead to the economic calendar, the US Consumer Price Index (CPI) release on June 10 remains a critical catalyst, with annual inflation forecasted at 4.2%. These figures will be pivotal in determining if the Federal Reserve adjusts its policy stance in light of the new geopolitical landscape and its impact on energy-driven inflation.