SINGAPORE: The US dollar fell to a one-month low on Wednesday, while the euro, yen, Australian dollar, and New Zealand dollar surged in Asian trading after US President Donald Trump announced a two-week ceasefire agreement with Iran.
The yen gained 0.7% against the dollar, reaching 158.50 per dollar. Meanwhile, the euro rose 0.7% to $1.1677, and the British pound increased 0.8% to $1.3403.
The Australian dollar jumped 1.2% to $0.7063, while the New Zealand dollar climbed 1.1% to $0.5795.
Earlier, Trump had warned of extensive strikes on Iran’s civilian infrastructure, drawing global criticism after stating that “a whole civilization will die tonight” if his conditions were not met.
Market sentiment quickly shifted toward risk-taking following the ceasefire announcement, which came less than two hours before Trump’s deadline for Tehran to reopen the Strait of Hormuz.
If the Strait reopens, “we could be able to consolidate the risk-on rally that we’re seeing,” said Ray Attrill, head of FX strategy at National Australia Bank in Sydney.
“But a lot has to happen in the next 14 days,” he added, noting that currencies may face pullbacks in the meantime. “Markets still need to proceed with a degree of scepticism.”
The US dollar index, which tracks the currency against a basket of six major peers, declined for a third straight session to 98.943, its lowest level since March 11.
Cryptocurrencies also advanced, with bitcoin rising 3.2% to $71,514.03 and ether gaining 5.7% to $2,235.35.
