The deadline for U.S. military action against Iran is approaching, but the Asian foreign exchange markets remain calm.

LootboxPhobia · 2026-04-07T06:58:29+00:00

On Tuesday, Asian currencies remained largely stable against the US dollar, as investors continued to exercise caution over the deadline for US military action against Iran. The US dollar index edged higher, with market focus on Trump's warnings to Iran and the Reserve Bank of India's interest rate decision, with sentiment remaining somewhat weak. The US CPI data due on Friday is expected to rise significantly due to rising oil prices.

LootboxPhobia

2026-04-07 06:58:29

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Investing.com- On Tuesday, most Asian currencies were nearly flat against the U.S. dollar, as investors remained cautious with the U.S. deadline for potential military action against Iran by the United States nearing.

The U.S. Dollar Index rose 0.1% during the Asian trading session. As of 02:05 a.m. Eastern Time (06:05 GMT), U.S. Dollar Index futures were also up 0.1%.

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Trump’s Iran deadline looms

The market is counting down to the final deadline set by U.S. President Trump at 8:00 p.m. Eastern Time, requiring Iran to reopen the Strait of Hormuz, after Iran rejected a U.S.-backed ceasefire proposal.

Trump warned that strikes could be launched against Iran’s infrastructure, threatening that the “entire country could be destroyed overnight.”

With no sign that tensions are easing, investor sentiment remains fragile.

“Based on our ongoing assessment, given how wide the expectations gaps are among different parties in this war, the path to peace is narrow and unlikely to be realized,” a strategist at Mitsubishi UFJ Financial Group said in a report.

The Japanese yen versus the U.S. dollar USD/JPY was flat, while the South Korean won versus the U.S. dollar USD/KRW fell 0.3%.

The yuan onshore rate USD/CNY edged down 0.1%, while the Singapore dollar versus the U.S. dollar USD/SGD was basically flat.

Indian rupee weakens as market waits for RBI decision

The Indian rupee versus the U.S. dollar USD/INR rose 0.3%. Investors are waiting for the Reserve Bank of India’s interest-rate decision, which will be released on Wednesday.

The Indian rupee strengthened last week, supported by the RBI’s recent measures to rein in speculative positions, but the gains were limited by geopolitical risks and high oil prices.

In addition, the Australian dollar versus the U.S. dollar AUD/USD was nearly flat.

Investors are also waiting for the U.S. March consumer price index (CPI) report, scheduled for release on Friday. It is expected to show a significant increase, driven mainly by higher fuel costs related to the Middle East conflict.

“Friday’s March CPI data could show the year-over-year overall inflation rate jumping from 2.4% to 3.4% due to higher gasoline prices, but the University of Michigan consumer confidence report to be released 90 minutes later is also important,” said a strategist at ING in a report.

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