Reuters: Dollar retreats on optimism over Middle East tensions

"A sense of cautious optimism has settled on financial markets in the aftermath ⁠of yesterday’s U.S.-Iran headlines, lifting currencies with heavy energy import exposures and limiting safe-haven flows into the dollar," said Karl Schamotta, chief market strategist at ​Corpay Cross-Border Solutions in Toronto. "Measures of implied volatility are inching lower across the foreign exchange landscape, with fear levels now well below pre-war thresholds in many currency pairs," ​Schamotta said ... but .. calm in markets could well prove fleeting. "While the Trump administration is clearly motivated to find an off-ramp in the conflict, there’s little to suggest that negotiating positions have converged. More negative, and volatility-inducing headlines could land in the ​days and weeks to come," he said.

Read the article here.