Asian currencies moved without a clear trend on Monday, while the dollar remained steady as investors weighed escalating geopolitical tensions in the Middle East against signs of renewed ceasefire efforts.
The US Dollar Index inched up 0.1% following recent gains, with its futures also rising 0.1% as of 02:52 ET (06:52 GMT).
Trump issues ultimatum to Iran; Axios reports ongoing ceasefire negotiations
Trump issued a deadline for Iran to reopen the Strait of Hormuz, while reports from Axios pointed to ongoing ceasefire discussions. Traders closely watched the situation as he warned Tehran to resume tanker traffic by 8 p.m. Eastern Time on Tuesday or risk strikes on key infrastructure such as power plants and bridges.
Market sentiment improved slightly after Axios reported that the U.S., Iran, and regional mediators were negotiating a potential 45-day ceasefire, although no deal had been finalized.
In currency markets, USD/JPY remained largely unchanged, while USD/KRW slipped 0.3%. Regional currencies were also shaped by persistently high oil prices following a recent surge, which typically weigh on major importers like Japan, South Korea, and India by worsening their trade balances.
Meanwhile, USD/CNY fell 0.1%, USD/SGD was steady, and AUD/USD rose 0.3%.
Indian rupee weakens; RBI policy decision expected later this week
The Indian rupee weakened, with the USD/INR pair rising 0.6% to 93.281 on Monday, after touching a more than two-week low of 92.585 in the previous session.
The currency had strengthened over the past five sessions, supported by measures from the central bank.
Attention now turns to the Reserve Bank of India’s policy decision on Wednesday, where rates are widely expected to remain unchanged despite the rupee’s decline.
Meanwhile, investors are also reacting to stronger-than-expected U.S. payroll data released on Friday, which has reinforced expectations that the Federal Reserve could keep interest rates higher for longer.
Sources: Ayushman Ojha
THE ETERNAL SOVEREIGN 
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