The U.S. dollar hovered near a 10-day low against other major currencies on Monday as a preliminary agreement to end the war between the U.S. and Iran sent oil prices tumbling and lifted risk sentiment.
U.S. and Iranian officials said on Sunday they had agreed on a framework for a deal to end their war, halt the U.S. blockade of Iran and reopen the Strait of Hormuz.
The memorandum of understanding is scheduled to be officially signed on Friday in Switzerland, but caution still lingered as markets awaited more details and as the fate of Iran's nuclear program was left for further negotiations.
Oil prices slumped, with Brent crude futures down around 5% to $82.9 a barrel.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was little changed at 99.51, hovering around its lowest since June 5.
Major central banks, including the Federal Reserve, the Bank of Japan, the Bank of England and the Reserve Bank of Australia, will deliver rate decisions this week, with markets focused on whether prospects for a peace deal will ease their inflation concerns and influence the current tightening trajectory.
