The US dollar retreated from a two‑month peak on Tuesday, surrendering earlier gains as tensions in the Middle East eased. However, currency movements remained muted as investors continued to brace for upcoming interest rate hikes in both the United States and Europe.
Iran and Israel paused their attacks on Monday following an appeal from US President Donald Trump, though uncertainty lingered after Tehran warned it would resume strikes if Israel continued targeting Iran‑backed Hezbollah forces in Lebanon.
Trump suggested he might have an “idea” for an Iran agreement within days, raising market hopes. Still, previous attempts to secure a lasting resolution to the conflict, now more than three months old, have made limited progress, keeping oil prices and the dollar elevated.
The euro edged up 0.1% to $1.1545 after touching a two‑month low in the prior session. The British pound climbed about 0.2% to $1.3360, rebounding from a three‑week low.
The Australian dollar, typically sensitive to risk sentiment, rose 0.2% to $0.7056, while the New Zealand dollar gained 0.4% to reach $0.5833.
The Japanese yen weakened to as low as 160.295, remaining near the 160 threshold widely viewed as a potential trigger for government intervention.
