The dollar weakened amid optimism that tensions in the Iran conflict could ease.

The dollar slipped Tuesday as hopes grew that the U.S.–Israel conflict with Iran might be shorter than feared. Still, it remained on track for its strongest quarter since late 2024, supported by safe-haven demand amid ongoing uncertainty. The dollar index fell 0.59% to 99.96 but was headed for a 2.35% monthly gain and a 1.7% rise for the quarter.

Since the conflict began in late February, the greenback has been buoyed by its safe-haven appeal and the U.S.’s relative resilience to oil disruptions as a net energy exporter. Reports suggested President Donald Trump may be open to ending the campaign even if the Strait of Hormuz remains largely closed, though officials including Pete Hegseth warned the situation could escalate without a deal.

Uncertainty remains high, with Iran threatening retaliation against major U.S. companies such as Microsoft, Google, and Apple. Analysts say the dollar may stay supported as long as geopolitical risks and market volatility persist.

Meanwhile, China and Pakistan called for an immediate ceasefire and renewed negotiations. Markets were also influenced by positioning ahead of key U.S. labor data, after job openings and hiring came in weaker than expected. Attention now turns to the upcoming March jobs report, which could shape expectations for Federal Reserve policy.

Among other currencies, the euro and pound rebounded modestly, while the Japanese yen strengthened for a second day amid intervention warnings from Japanese officials. In crypto markets, Bitcoin rose 1.75% to $67,757.

Sources: Reuters