USD Weakens and Oil Prices Soften as US-Iran Diplomatic Talks Loom

The US Dollar started the trading week under pressure as investors weighed trade policy risks against shifting geopolitical dynamics. Market concerns persist regarding a potential 15% import surcharge under Section 122, which ING analysts suggest could trigger synchronized weakness in US assets. Meanwhile, ICE Brent oil prices are trading softer following last week's rally, as the geopolitical risk premium begins to cool. This shift follows the announcement of scheduled diplomatic talks between the United States and Iran, providing a temporary reprieve from regional tensions. The cooling energy sector adds another layer of complexity to the greenback's performance against major peers. Traders are now closely monitoring these diplomatic efforts alongside official communications on trade measures for further market direction.