The US Dollar has weakened significantly against its G10 peers after news of alleged ceasefire talks brokered by President Trump between Israel and Iran, following recent airstrikes and retaliations. This de-escalation has boosted risk-forward assets, leading to a slump in oil prices and expectations of stable energy costs, which may ease inflation and prompt potential Federal Reserve rate cuts. FOMC Vice Chair Michelle Bowman hinted at possible rate cuts as early as next month, while Fed Chair Jerome Powell's upcoming testimony may provide further clarity. Key data releases this week, including US Q1 GDP and the PCE Deflator Index, add to market uncertainty. The Euro has rebounded to its strongest level since 2021 amid de-escalation signals, while the Yen has strengthened due to a sharp Dollar decline and ongoing concerns over US economic stability.
