The dollar's recent rally took a pause as hopes for a potential Iran deal emerged, causing the currency to fall against the yen for the first time in eight sessions.
On Thursday, the dollar was slightly down at 158.905 yen, retreating from the 160 level that could trigger intervention by Japanese officials.
Meanwhile, the euro remained steady at $1.1626 after recovering from its weakest point since April 7, recorded at $1.1583 in the previous session.
“'Safe haven' flows reversed because of positive news about the Iran war.”
Joseph Capurso, head of FX at Commonwealth Bank of Australia
The dollar index, which tracks the currency against the euro, yen, and four other currencies, remained flat at 99.128, following a peak of 99.472 on Wednesday, the highest since April 7.
Joseph Capurso, head of FX at Commonwealth Bank of Australia, noted that 'safe haven' flows reversed due to positive news regarding the Iran conflict. However, he cautioned that President Trump might still opt for military escalation to gain leverage in negotiations.
Background
The potential resolution of the Iran conflict could stabilize global markets, which have been volatile due to geopolitical tensions.
Investors will be closely monitoring developments in the U.S.-Iran negotiations, as any escalation could impact currency markets and global economic stability.
