[MARKET ANALYSIS] DXY softens amid lower oil prices and the risk on mood amid hopes for a nearing US-Iran deal

DXY: -0.3%

• Softened amid the risk-on environment and a drop in oil prices after US President Trump announced on Saturday that a US-Iran agreement has largely been negotiated, subject to finalisation, and would include the reopening of the Strait of Hormuz, while he posted the following day that negotiations are proceeding in an orderly and constructive manner, but informed representatives not to rush into a deal. It was separately reported that there is agreement on 95% of a deal, which needs to be drafted with some difficulties remaining, and it is estimated to take 5-6 days to receive approval from Iran's Supreme Leader. Aside from the geopolitical updates, there was very little else to spur the dollar amid the extended weekend for Memorial Day, although there were some comments from White House NEC Director Hassett that ending the Iran war may create room for a Fed rate cut.

EUR/USD: +0.3%

• Benefitted from the weaker dollar and with some recent hawkish commentary from ECB officials with Kocher and Stournaras suggesting the central bank may be forced to hike rates next month amid inflationary pressures, unless a US-Iran peace deal can be reached.

GBP/USD: +0.4%

• Strengthened amid the positive risk appetite, but with further upside contained amid the closure of the world's largest FX trading hub on Monday due to the UK Spring Bank Holiday.

USD/JPY: -0.2%

• Retreated back beneath the 159.00 level amid a softer dollar and as lower oil prices ease some of the energy-related pressures on Japan.

Antipodeans: AUD/USD +0.6% / NZD/USD +0.4%

• Gained at the reopen amid the optimism related to a nearing US-Iran deal.