The U.S. dollar edged higher in early Thursday trading after suffering broad losses, as investors cautiously monitored the durability of a two-week ceasefire between the United States and Iran. The dollar index climbed a marginal 0.03% to 99.09, recovering slightly from a one-month low hit Wednesday following the truce announcement.
Major currency pairs reflected the cautious mood. The euro slipped 0.07% to $1.1654, the Japanese yen weakened 0.06% to 158.7 per dollar, and sterling dipped 0.04% to $1.3387. The Australian dollar fell 0.13% to $0.7034, while New Zealand's kiwi eased 0.02% to $0.5821.
Despite the ceasefire, market confidence remains shaky. Israel continued military operations against Hezbollah in Lebanon, and Tehran accused both Israel and the U.S. of breaching the agreement, calling further peace negotiations "unreasonable." The Strait of Hormuz — a critical global oil transit route — stayed closed to unpermitted vessels, with shipping companies demanding greater clarity before resuming normal operations.
"Any signs that the ceasefire is breaking down, whether through renewed restrictions in the strait or spillover from regional conflicts like Lebanon, could push oil prices higher again, strengthen the U.S. dollar and weigh on risk assets," warned Daniela Hathorn, senior market analyst at Capital.com.
The five-week conflict triggered the largest disruption to global oil and gas supplies on record, yet the dollar emerged as one of the primary beneficiaries among major currencies. As a net energy exporter, the U.S. faced less economic exposure than oil-importing nations like Japan and several European countries.
Markets are now watching the release of U.S. February personal spending and PCE deflator data. Strong readings could reignite dollar momentum. Bank of Japan Governor Kazuo Ueda's parliamentary appearance also drew attention. In crypto markets, Bitcoin fell 0.50% to $71,018.20, while Ethereum declined 0.96% to $2,188.86.


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