U.S. dollar hits 10-day low

The dollar index was 0.1% lower at 99.395, ​its lowest level since June 5

The U.S. dollar weakened to a 10-day low against its major peers on Monday as a preliminary agreement to ​end the war between Iran and U.S. sent oil prices tumbling and boosted demand for riskier assets.

Iran and U.S. ‌officials said on Sunday they have agreed on a framework for a deal to end their war 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.

Oil prices plunged, with Brent crude futures down more than 4% to $83.82, while the U.S. currency eased on receding geopolitical tensions and inflation concerns.

The euro rose as much as 0.5% to $1.1622, and sterling firmed ⁠0.4% to $1.3459. Both were near the strongest level since June 5.

The risk-sensitive Australian dollar fetched $0.7087, up almost 0.7%, while the kiwi was up ​0.6% at $0.5863.

The dollar index was 0.1% lower at 99.395, ​its lowest level since June 5.

I think we’ll see the dollar fall over the course of the next few sessions. We’ll probably see some of the risk currencies like Aussie and yen appreciate a little bit. But I don’t think we’re going to see any huge moves, said Nick Twidale, chief market strategist at ATFX Global ​in Sydney.

There’s going to be a lot of wait and see, on how quickly the strait really reopens and how long it’s going to ​take for oil flows to really get back to normal. It’s certainly going to be months rather than weeks, he said.

The yen softened to as much as ‌160.225, continuing ⁠to hover around the 160 level widely seen for potential official intervention.