The U.S. dollar held steady against the Brazilian real on Tuesday, while weakening against other emerging-market currencies as market focus shifted back to the Middle East.
The greenback’s stability came despite a broader decline against EM peers, reflecting a cautious stance among traders.
The shift in sentiment marks a return of geopolitical risk to the forefront, after recent trading sessions had been dominated by recalibrations of the U.S. interest rate outlook.
This development follows a period where easing geopolitical friction had diminished the dollar’s traditional safe-haven appeal.
Last week, the dollar index was on track for a weekly decline as softer-than-expected U.S. inflation data prompted investors to price in further rate cuts.
The Chinese yuan also held steady in Monday trading as attention moved away from Middle East tensions.