Currencies had rallied on Wednesday after oil prices slumped more than 7%

Most Asian currencies were little changed on Thursday after posting strong gains in the previous session, as hopes for an Iran-U.S. peace agreement pushed oil prices sharply lower and weakened the dollar.

Currencies had rallied on Wednesday after oil prices slumped more than 7% following a report that Iran and the U.S. were nearing a memorandum of understanding aimed at ending the war.

Lower crude prices offered relief to oil-importing Asian countries, easing concerns over inflation and trade balances that had intensified after the Strait of Hormuz crisis sent energy prices soaring in recent months.

Further de-escalation in the Middle East, such as Iran accepting the US proposed deal and a gradual reopening of the Strait of Hormuz, could continue to support gains in Asia FX, MUFG analysts said in a note.

The yen’s USD/JPY pair traded flat after dropping almost 1% in the previous session.

The yuan’s onshore USD/CNY and offshore pair USD/CNH edged down 0.1% each.

The won’s USDKRW pair gained 0.5% on Thursday after dropping 1.6% in the previous session.

The Indian rupee’s USD/INR pair inched 0.2% higher, while the Singapore dollar’s USD/SGD was largely unchanged.

The Australian dollar’s AUD/USD pair traded flat after domestic trade data unexpectedly showed a deficit in March, underscoring pressure from weaker commodity exports and higher imports.

Data released on Thursday showed Australia posted a trade deficit of A$1.84 billion, missing expectations for a A$4.25 billion surplus.

Meanwhile, minutes from the Bank of Japan’s March meeting showed several policymakers saw the need to raise interest rates further if the Iran war-driven energy shock persisted and broadened inflationary pressures.