Asian currencies consolidated against the dollar in early trade, but could strengthen on hopes for the reopening of the Strait of Hormuz, which may boost appetite for risky assets. U.S. Treasury Secretary Bessent said a deal to reopen the strait was possible 'today or tomorrow,' and Qatar confirmed a proposal had been drafted, according to two members of CBA's Global Economic & Markets Research. The team noted 'stronger risk sentiment' in markets. The U.S. dollar was little changed at 157.69 yen and 0.1% lower at 1,427.80 won, while the Australian dollar remained steady at US$0.7047, based on LSEG data.

Market participants are watching developments around the Strait of Hormuz, a critical shipping route, for potential impact on global trade and energy markets. A reopening could ease supply concerns and support regional currencies.

Analysts suggest that improved geopolitical conditions may lead to increased investment in emerging Asian markets, providing additional support for local currencies against the greenback.