USD/JPY is grinding into the Bank of Japan's (BoJ) June meeting above the 160.00 handle, a whisker from multi-decade highs, while the central bank meant to defend the Yen prepares to raise rates to a three-decade high without lifting the currency at all.

The Australian Dollar registered gains of over 0.37% on Monday as the US and Iran agreed on a Memorandum of Understanding (MOU) aimed at ending the conflict and setting the stage for talks about Tehran’s nuclear program.

Monday played out as a textbook risk-on session, with global equities ripping higher and Crude Oil tumbling after Washington and Tehran unveiled a framework deal to end the war and reopen the Strait of Hormuz.

USD/CHF retreats by over 0.34% on Monday amid most G8 FX currencies appreciating against the US Dollar as the Middle East conflict eases following the US and Iran agreeing to a peace deal. The pair trades at 0.7943, after reaching a high of 0.7968.

The AUD/USD pair rebounds near the 0.7080 region on Monday amid improved risk sentiment following reports of a preliminary United States (US)-Iran peace agreement. At the time of writing, the Australian Dollar (AUD) rises 0.46% against the US Dollar (USD), hitting its highest level in a week.

EUR/USD holds firm on Monday as the US-Iran peace deal boosts risk appetite, reducing safe-haven demand for the US Dollar (USD). At the time of writing, the pair trades around 1.1598 after hitting an intraday high of 1.1662.

The Pound Sterling advances by 0.31% on Monday as risk appetite improves following an agreement reached by the US and Iran, which will be signed on June 19 in Geneva, Switzerland.

The USD/JPY pair trades with a cautious tone as investors digest softer United States (US) industrial activity data while positioning for the Bank of Japan’s (BoJ) interest rate decision due on Tuesday.

NZD/USD trades around 0.5840 at the time of writing on Monday, up 0.17% on the day. The pair benefits from broad-based US Dollar (USD) weakness as markets welcome news of a framework agreement between the United States (US) and Iran aimed at ending the conflict between the two countries.

The Swiss Franc (CHF) strengthens against the US Dollar (USD) on Monday as the Greenback's safe-haven demand fades after the United States and Iran reached a peace agreement aimed at ending the war in the Middle East. At the time of writing, USD/CHF trades around 0.7923, down 0.60% on the day.

BNY’s Bob Savage notes that the Japanese Yen is in focus as FX markets react to geopolitical de-escalation and shifting risk sentiment. The reopening of the Strait of Hormuz has supported risk assets, but investors remain attentive to policy divergence involving JPY, KRW and USD.

The Canadian Dollar (CAD) is trading without a clear bias against the US Dollar (USD) on Monday.

MUFG’s Lee Hardman observes that the Japanese Yen has not benefited from lower energy prices, with USD/JPY still above 160.00 ahead of the BoJ meeting.

National Bank of Canada (NBC) discusses USD/CAD, noting the pair has been consolidating and may remain range-bound. The bank highlights that recent moves reflect shifting expectations for Federal Reserve and Bank of Canada policy.

The Australian Dollar (AUD) trims previous gains against the US Dollar (USD) on Monday, as markets ponder the peace agreement between the US and Iran, ahead of a central bank-busy week.

Rabobank’s FX Strategy team at RaboResearch Global Economics & Markets discusses how the Dollar initially benefited from safe haven flows during the Iran war, but has since softened as a ceasefire memorandum eased market tensions and tempered Fed hike expectations.

The Euro (EUR) maintains its positive tone against the US Dollar (USD) on Monday, with the EUR/USD pair trading near 10-day highs above 1.1600.

The Japanese Yen (JPY) trades lower against its major currency peers during the European trading session on Monday, while the USD/JPY pair is marginally lower at around 160.15 after recovering its early losses.

AUD/USD trades around 0.7070 at the time of writing on Monday, up 0.35% on the day, benefiting from renewed risk appetite after the United States (US) and Iran announced a framework agreement aimed at ending their conflict.

Brown Brothers Harriman (BBH) expects the Riksbank to keep its policy rate at 1.75% for a sixth consecutive meeting and to lean against market pricing for a 25 bps hike by year-end.

Societe Generale highlights USD/JPY trading near 160, with dips bought despite lower Oil and expectations of a 25 bp BoJ hike.

The Eurozone industrial sector activity rises at a moderate pace of 0.1% in April, slower than 0.3% estimates, according to data published by Eurostat. March’s Industrial Production data was revised higher to 0.4% from 0.2%.

Societe Generale reports EUR/USD trading between 1.1569 and 1.1622 overnight, with the Euro bid above the 1.16 handle on the US–Iran MoU and lower Oil prices.

Eurozone Trade Balance s.a. dipped from previous €3.5B to €1.3B in April

Eurozone Trade Balance n.s.a. came in at €-1B below forecasts (€7.8B) in April

Eurozone Industrial Production w.d.a. (YoY) climbed from previous -2.1% to 0.3% in April

Eurozone Industrial Production s.a. (MoM) came in at 0.1%, below expectations (0.3%) in April

USD/CHF depreciates nearly 0.5%, trading around 0.7930 during the European hours on Monday. The technical analysis of the daily chart indicates the pair is remaining within the ascending channel pattern, signaling an ongoing bullish bias.

The Euro (EUR) shows a positive stance against the British Pound (GBP) on Monday, with bulls pushing toward one-week highs in the 0.8645 area.

ING’s Chris Turner highlights several risks for the Pound this week, centred on the Bank of England meeting and a key Labour by-election.