SINGAPORE — The dollar struggled to regain lost ground on Wednesday as investors who have been starved of good news latched onto optimism over a fragile truce between Israel and Iran as a reason to take on more risk.
Markets were jubilant and an index of global shares hit a record high overnight as a shaky ceasefire brokered by US President Donald Trump took hold between Iran and Israel.
The two nations signalled that the air war between them had ended, at least for now, after Trump publicly scolded them for violating a ceasefire he announced.
Investors heavily sold the dollar in the wake of the news, after pouring into the safe-haven currency during the 12 days of war between Israel and Iran that also saw the US attack Iran’s uranium-enrichment facilities.
Currency moves were more subdued in early Asia trade on Wednesday though the euro remained perched near its highest since October 2021 at $1.1621, having hit that milestone in the previous session.
Sterling eased 0.02 percent to $1.3615 but was similarly not far from Tuesday’s peak of $1.3648, which marked its strongest level since January 2022.
The risk-sensitive Australian dollar, which rallied sharply in the previous session, last traded 0.02 percent higher at $0.6492.
While the truce between Israel and Iran appeared fragile, investors for now seemed to welcome any reprieve.
