Market Surge: Ceasefire Boosts Global Currencies Amid Dollar Dip

In a significant development, global currency markets witnessed a shift on Tuesday as the U.S. dollar fell, bolstered by an announced ceasefire between Israel and Iran by President Donald Trump. This news ignited optimism among investors, leading risk-sensitive currencies like the Australian and New Zealand dollars to rise.

Meanwhile, Israel's shekel surged against the dollar, marking its strongest level since February 2023. Despite the positive market reaction, the situation remains tentative, with Iran's foreign minister issuing conditions for a lasting peace. Currencies across the board reacted, with the euro and sterling rising slightly amid a slide in oil prices.

This economic ripple comes as dovish comments from Fed officials indicate potential interest rate cuts, contributing to the dollar's depreciation. Markets are closely watching Fed Chair Jerome Powell's upcoming testimony for further insights into U.S. monetary policy. Meanwhile, cryptocurrencies like bitcoin and ether reflected the buoyant risk sentiment with notable gains.

(With inputs from agencies.)