Most Asian currencies and the U.S. dollar were little changed on Tuesday, as investors stayed cautious ahead of a looming U.S. deadline for potential military action against Iran.
The US Dollar Index edged up 0.1% during Asian hours. US Dollar Index Futures also traded 0.1% higher as of 02:05 ET (06:05 GMT).
Get premium Asia FX insights with InvestingPro subscription
Trump's Iran deadline looms Markets counted down to President Donald Trump’s 8 p.m. ET deadline for Iran to reopen the Strait of Hormuz, after Iran rejected a U.S.-backed ceasefire proposal.
Trump has warned of potential strikes on Iranian infrastructure, threatening that "the entire country can be taken out in one night."
Investor sentiment remained fragile as tensions showed no signs of easing.
"Our continued assessment is that the path towards peace is narrow and unlikely, given the wide gap in expectations among the different parties in this war," MUFG analysts said in a note.
The Japanese yen's USD/JPY pair traded flat, while the South Korean won's USD/KRW edged down 0.3%.
The Chinese yuan's onshore pair USD/CNY ticked down 0.1%, while the Singapore dollar's USD/SGD was largely muted.
Indian rupee weakens ahead of RBI decision The Indian rupee's USD/INR pair rose 0.3%, as investors awaited the Reserve Bank of India's interest rate decision, due on Wednesday.
The Indian rupee had strengthened last week, supported by recent measures from the Reserve Bank of India to curb speculative positioning, though gains were limited by geopolitical risks and elevated crude prices.
Elsewhere, the Australian dollar's AUD/USD pair traded little changed.
Investors also await the U.S. March consumer price index (CPI) report, scheduled for release on Friday, and is expected to show a notable uptick, driven largely by higher fuel costs linked to the Middle East conflict.
"Friday’s March CPI data is likely to show annual headline inflation jumping to 3.4% from 2.4% on gasoline price hikes, but the University of Michigan’s (UoM) consumer sentiment report, released 90 minutes later, will be just as important," ING analysts said in a note.
