Asian currencies struggled for direction, while the dollar held firm on Monday as investors balanced heightened geopolitical risk in the Middle East against reports of renewed ceasefire diplomacy.
The US Dollar Index edged up 0.1% aafter recent gains. US Dollar Index Futures also traded 0.1% higher by 02:52 ET (06:52 GMT).
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Trump sets Iran deadline; Axios reports ceasefire talks Traders monitored U.S. President Donald Trump’s deadline for Iran to reopen the Strait of Hormuz by Tuesday evening. Trump said Tehran had until 8 p.m. Eastern Time to restore tanker traffic through the strategic waterway or face attacks on critical infrastructure, including power plants and bridges.
Market sentiment improved modestly after an Axios report said the United States, Iran, and regional mediators were discussing terms for a potential 45-day ceasefire, although no breakthrough had been confirmed.
The Japanese yen's USD/JPY pair traded flat, while the South Korean won's USD/KRW pair edged down 0.3%.
Regional currencies were also influenced by oil prices, which stayed elevated after surging in the previous session. Higher crude prices tend to pressure Asian currencies by worsening trade balances for major importers such as Japan, South Korea, and India.
The Chinese yuan's USD/CNY onshore pair edged 0.1% lower, while the Singapore dollar's USD/SGD traded flat.
The Australian dollar's AUD/USD pair gained 0.3%.
Indian rupee slips; RBI decision due this week
The Indian rupee's USD/INR pair jumped 0.6% to 93.281 rupees on Monday, after hitting over a two-week low of 92.585 in the previous session.
The currency gained in the last five sessions on support measures from the country's central bank.
Markets await the Reserve Bank of India's interest rate decision due on Wednesday, with expectations of a hold despite a sliding rupee.
Investors also assessed stronger-than-expected U.S. payrolls data released on Friday, which reinforced expectations that the Federal Reserve may keep interest rates elevated for longer.
