[MARKET ANALYSIS] DXY is softer ahead of this week's busy central bank activity, while Trump warned NATO of a bad future if allies don't help in Iran and suggested a potential delay in the Trump-Xi summit

DXY: -0.3%

• Marginally softened to start the week as it takes a breather after recently reclaiming the 100.00 status and with participants bracing for a busy schedule of central bank updates, while geopolitics remain in focus with US President Trump seeking a coalition to reopen the Strait of Hormuz and is said to also be weighing seizing Iran's Kharg Island, which officials said would require US troops on the ground. Furthermore, Trump called for China to help with the reopening of the Strait of Hormuz and even suggested that they could delay the Trump-Xi summit.

EUR/USD: +0.3%

• Rebounded from around a 7-month low amid a softer dollar, although the single currency remains beneath the 1.1500 handle amid quiet weekend newsflow from the bloc and with US President Trump warning that NATO faces a ‘very bad future’ if allies fail to help the US in Iran.

GBP/USD: +0.3%

• Regains some composure after sliding to a year-to-date low and with UK ministers to set out a GBP 50mln package for households hit by the Iran war energy shock, while the UK is also prepared to explore an EU tuition fee cut as part of efforts to reset post-Brexit relations.

USD/JPY: -0.1%

• Price action is choppy amid a lack of data releases from Japan to start the week and with comments from Japanese Finance Minister Katayama, who said they are prepared to take decisive steps on FX.

Antipodeans: AUD/USD +0.4% / NZD/USD +0.7%

• Clawed back some of their recent losses with NZD/USD the outperformer despite mixed data releases, while AUD/USD reclaimed the 0.7000 handle ahead of tomorrow's RBA policy decision in which the central bank is widely expected to deliver a back-to-back hike.

The DXY has softened as traders anticipate a busy week of central bank updates, reflecting nervousness in the market. Trump's comments regarding NATO and Iran bring additional geopolitical tension, likely influencing risk sentiment and currency flows, particularly with the RBA's anticipated policy decision, which could further impact the AUD.