Brent crude prices retreated in the session as market participants digested reports of a ceasefire between the U.S. and Iran, easing immediate fears of a supply disruption in the Strait of Hormuz.
The diplomatic development has triggered a sharp correction in energy markets, reversing the upward pressure that had driven oil higher in recent days.
The pullback in crude prices provided immediate relief to the Hungarian forint, which had weakened significantly amid the oil price surge.
The euro-forint exchange rate stabilized around 365, marking a recovery from the currency's recent lows.
Traders are interpreting the ceasefire news as a de-escalation of the geopolitical risks that had been weighing heavily on risk sentiment and emerging market currencies.
This development follows a period of heightened volatility in European energy and currency markets.