The dollar index climbed for a fourth straight session, supported by firmer Treasury yields and a weaker euro after dovish remarks from ECB President Christine Lagarde. Oil was lower after Vice President JD Vance said there was progress in Iran talks, with agreement on inspectors, frozen assets, and ceasefire management though negotiations are ongoing. U.S. Treasury authorized Iran-related oil and petrochemical transactions through Aug. 21. Iran downplayed progress saying it made no nuclear concessions or new commitments in Sunday’s U.S. talks in Switzerland. Lagarde said the euro zone inflation shock is notable but not strong enough to raise long-term expectations or spark second-round effects and yuan undervaluation warrants global discussion. Canada's annual inflation rate rose to 3.2% in May, exceeding the median forecast.

EUR/USD fell toward Friday's low of 1.1418 amid higher U.S. yields, USD demand and weaker German yields following Lagarde’s remarks, with bearish technicals reinforcing the downside bias. GBP/USD held a modest gain after Prime Minister Keir Starmer resigned, paving the way potentially for front-runner Andy Burnham and greater stability, though gains may be capped by U.K. macro uncertainty and technical resistance at the 1.3412 200-day moving average. USD/JPY briefly touched a 2026 high of 161.93 before dropping to 161.06 on a report of talks between Japan’s FinMin Katayama and U.S. Treasury Secretary Bessent, with subsequent steadying putting the focus back on the 161.96 2024 peak and 162 barriers.

AUD/USD pared a loss after dipping beneath 0.70 though a falling RSI and its position below 10- and 21-day moving averages point to a negative bias.

Treasury yields were up about five basis points with the 2s/10s curve steady at +27.7bp.

The S&P 500 was trading 0.33% lower in New York afternoon.

WTI crude oil fell 1.8% as U.S.-Iran talks ease supply risks.

Gold rose 0.73% while copper fell 0.31%. Heading toward the close: EUR/USD -0.37%, USD/JPY +0.14%, GBP/USD +0.06%, AUD/USD -0.24%, DXY +0.16%, EUR/JPY -0.23%, GBP/JPY +0.23%, AUD/JPY -0.02%.(Robert Fullem)