Asian currencies mostly strengthened against the dollar in early trading, buoyed by the extension of the U.S.-Iran cease-fire. The agreement, originally set to expire Wednesday, was prolonged, easing concerns about potential Middle East conflict. Market participants responded positively to the reduced geopolitical uncertainty.

The cease-fire extension provided relief to investors who had been monitoring rising tensions between Washington and Tehran. When Middle East tensions escalate, traders typically flock to the dollar as a safe-haven asset, putting downward pressure on Asian currencies. The extended reprieve allowed regional currencies to gain ground against the greenback.

This currency movement illustrates how closely Asian markets track geopolitical developments in the Middle East. Oil prices, a critical factor for many regional economies, remained relatively stable following the cease-fire news. The diminished threat of supply disruptions supported investor confidence across the region.