The Chinese yuan held steady in Monday trading as market attention shifted away from Middle East tensions toward the US interest rate outlook.
While easing geopolitical friction has diminished the dollar's traditional safe-haven demand, traders are increasingly pricing in the possibility of further rate hikes by the Federal Reserve, providing underlying support for the greenback.
The dollar index remained stable in Asian sessions, hovering above the 100 level after reaching a one-year high in the previous session.
This resilience suggests that despite the de-escalation of conflict risks involving Iran, macroeconomic factors related to US monetary policy are currently dominating currency flows.
The shift in sentiment comes as investors digest mixed signals from global markets.
Recent data showed China's external trade performance exceeding expectations in May, with exports jumping 19.4% year-on-year.