Dollar slips below 100 as Trump says new Iran talks will begin Monday

The US Dollar Index (DXY) traded near 99.70 in early Asian hours on Monday, slipping below the 100.00 mark after US President Donald Trump said a new round of talks with Iran would begin on Monday. The comments supported improved risk sentiment, and market participants linked the development to softer expectations for future US interest-rate moves.

Why the DXY move matters for Forex traders

A decline in the DXY on signs of geopolitical de‑escalation can affect currencies through several macro channels. Changes in perceived geopolitical risk tend to influence risk appetite, which in turn interacts with expectations about US monetary policy and US Treasury yields. When risk sentiment improves, traders often reassess the probability of further Fed tightening and adjust positioning in dollar-denominated assets. As a result, dollar momentum may remain sensitive to updates on talks, US economic data and comments from central bank officials.

Impact on major FX pairs

The softer tone for the dollar is relevant for a handful of key instruments. EUR/USD, GBP/USD and USD/JPY are among the most watched pairs when the DXY moves. In this episode, markets noted the link between reduced geopolitical risk and market pricing of Fed-hike prospects, with observers also monitoring US Treasury yields as an important transmission channel to currency moves. FX markets may focus on how those yields and broader risk sentiment evolve following the reported start of talks.

Traders and analysts are also paying attention to whether easing geopolitical concerns persist or are quickly reversed, as that will influence whether the dollar's softer tone is sustained. The relationship between risk appetite, yield moves and central-bank expectations remains central to any reassessment of dollar strength.

Markets will monitor upcoming US economic releases and central bank speeches that could reshape Fed expectations and dollar momentum, alongside any further developments in US-Iran diplomacy and moves in US Treasury yields.