Dollar dropped in favour of oil-tied FX.......>

FOREX: Dollar dropped in favour of oil-tied FX

-Tit-for-tat barbs traded between the US and Iran drove the oil price higher

throughout the latter half of the Monday session. First, the US designated the

Iranian Revolutionary Guard a 'terrorist organization', marking the first time

the US have attached the label to a segment of another country's government. In

response, the Iranian government affixed the label to the US military in a

tit-for-tat move, with the expected diplomatic disruption boosting oil prices to

multi-month highs. Brent crude futures rallied north of $71/bbl for the first

time since November, helping underpin rallies in NOK, CAD, RUB and others.

-The greenback retreated, falling against all others in G10, alongside US equity

markets. Profit-taking amid thin newsflow was largely the theme, but EUR/USD's

ability to break and hold gains above last week's highs helped. Bloomberg source

reports that the ECB are said to be responding "only slowly" to reviews on

negative rates also helped buoy the single currency.

-The calendar is particularly quiet Tuesday, with only US JOLTS job openings on

the docket. Speaker list is empty ahead of Fed and ECB releases Wednesday.