Dollar Weakens After Trump Delays Iran Strike Plans
The U.S. dollar recorded notable losses against major currencies on Tuesday, following a volatile start to the week. The move came after U.S. President Donald Trump postponed a planned attack on Iran’s power infrastructure, easing fears of a prolonged conflict in the Middle East.
Mixed Signals Keep Markets on Edge
In a statement on Truth Social, Trump said the U.S. and Iran had engaged in “productive” discussions aimed at fully resolving regional tensions. However, Iran denied that any direct negotiations had taken place.
These conflicting messages created uncertainty in financial markets. While the delay initially triggered a risk-on rally, investors remained cautious given the fragile geopolitical backdrop.
Oil Supply Risks Continue to Influence Sentiment
Market participants are still closely watching developments in the Strait of Hormuz, a critical route for global energy supplies. Any disruption could impact nearly one-fifth of the world’s oil and liquefied natural gas shipments, keeping risk sentiment sensitive to headlines.
Currency Markets Show Mixed Performance
The British pound fell 0.5% to $1.33925 after gaining nearly 1% in the previous session. Meanwhile, the euro slipped 0.2% to $1.1593 after posting modest gains earlier.
The dollar index, which tracks the U.S. currency against a basket of peers, rebounded slightly by 0.2% to 99.35 after hitting a near two-week low on Monday.
Analysts Warn of Ongoing Volatility
Market strategists noted that while the delay in military action has temporarily reduced volatility, it may not be enough to sustain a broader risk-on trend.
Uncertainty around U.S. policy direction remains a key concern. Investors are unsure whether the latest developments signal genuine diplomatic progress or simply a short-term pause in tensions.
Commodity and Risk Currencies React
The Australian dollar declined 0.2% to $0.6993, retreating from a six-week high, while the New Zealand dollar dropped 0.23% to $0.5845.
Oil prices rebounded slightly after a sharp drop of more than 10% in the previous session. Brent crude rose back above $100 per barrel, as supply concerns continue to support prices.
Outlook: Uncertainty Keeps Markets Fragile
Analysts emphasize that the key question is whether the delay in military action will lead to a lasting resolution or prolong uncertainty. The recent decline in the dollar reflects shifting risk sentiment, but conviction remains low, leaving markets vulnerable to sudden reversals.
Yen Holds Steady Amid Inflation Data
The Japanese yen remained stable at 158.61 per dollar. Japan’s core inflation rate came in at 1.6% in February, falling below the Bank of Japan’s 2% target for the first time in nearly four years. This development complicates the central bank’s path toward further interest rate hikes.
