The foreign exchange market’s reaction was muted compared to other segments, as traders awaited comments from central banks this week, according to Thomson Reuters.
The euro traded at $1.1577, down from a 10-day high of $1.1622 reached on Monday. The pound traded at $1.3392 on Tuesday.
The dollar index, which tracks the value of the U.S. currency against six others, stood at 99.76. Since the conflict began in late February, driven by a fragile ceasefire and mutual attacks, the index has risen by 2%.
Investors will be watching developments regarding the normalization of supply chains, as the short-term outlook for inflation and interest rates remains uncertain.
ING analysts noted that the market reaction was faster than the actual situation and may change depending on the future prospects of the deal.
“Safe, predictable, and insured shipping through the Strait of Hormuz is necessary for a sustained price recovery,” their note states. “Demand is likely to be higher than usual due to the need to replenish depleted inventories. The risks of a renewed escalation have been reduced but have not disappeared.”
