The euro has sunk to a one-year low, with easing tensions between the United States and Iran helping to cool oil prices and raise expectations that the European Central Bank will turn more dovish. The euro was quoted at $1.135 against the U.S. dollar on Wednesday, down from $1.165 before the U.S. and Iran first agreed to a conditional ceasefire on 8th April. A provisional peace agreement to restore oil flows through the Strait of Hormuz has dramatically cooled global energy markets, with Brent crude for August delivery trading at $74.76 per barrel, sharply lower from around $115 per barrel in May, while the comparable WTI crude contract was changing hands at $71.02 per barrel. The collapse in oil prices halts the inflationary pressures that had forced the ECB to announce a protective 25-basis-point interest rate hike earlier this month, and traders have now slashed the probability of a second ECB rate hike from 50% to just 20%. In contrast, a more hawkish stance at the United States Federal Reserve, which is signaling a higher-for-longer policy amid resilient consumer spending, has been driving a massive rally in the greenback, with the U.S. dollar index climbing to 101.45, roughly 4% higher from a year ago.