The Trump truce signals a risk-on turn for markets as the dollar falls

The dollar sank to its lowest level in two weeks in early trading in Asia on Wednesday, while the euro, yen, Aussie and kiwi rallied after US President Donald Trump said he had agreed to a two-week ceasefire with Iran.

Against the greenback, the yen strengthened 0.6% to 158.68 yen per dollar. The euro was up 0.7% at $1.167, while the British pound was up 0.7% at $1.3385. The Australian dollar rose 1.3% to $0.7068 as its New Zealand counterpart rose 1.4% to $0.5810.

Trump has previously threatened a broad attack on Iran’s civilian infrastructure. Markets turned risk-on after the announcement, less than two hours before its deadline for Tehran to reopen the Strait of Hormuz expires.

The US dollar index, which measures the greenback’s strength against a basket of six currencies, was down 1.0% at 98.97, a two-week low. Cryptocurrencies also rallied, with bitcoin up 3.4% to $71,664.41, as ether gained 5.7% to $2,234.78.