Asian currencies steadied against the dollar early Tuesday as markets digested fresh Middle East tension. U.S. strikes hit southern Iranian sites, officials said, heightening uncertainty around ongoing U.S.-Iran peace talks. The strikes came amid a fragile diplomatic push that has seen multiple rounds of back‑channel talks. OCBC Group Research warned that any upside for the greenback remains limited, noting the dollar slipped 0.2% to 1,509.70 won.

The dollar’s modest decline left the Singapore dollar virtually unchanged at 1.2767, while the Australian dollar eased 0.1% to $0.7166, LSEG data showed. Traders cited the U.S. strike as a catalyst that could curb further dollar weakness, even as America’s growth outlook stays buoyed by the AI investment cycle, according to the strategists.

With the dollar hovering near recent lows, regional investors may favor local currencies unless geopolitical risk spikes again. The narrow move suggests market participants are weighing the probability of a breakthrough in the U.S.-Iran dialogue against the broader strength of the U.S. economy. For now, currency traders remain on the sidelines, watching each development for a decisive trigger.