The yuan’s onshore pair USD/CNY edged down 0.2%, the yen’s USD/JPY traded flat, while the won outperformed with the USD/KRW pair declining 1.2%

Most Asian currencies edged higher on Wednesday as signs of easing Middle East tensions supported risk appetite, while the won outperformed after hotter-than-expected inflation data.

The dollar dropped 0.2% against a range of currencies, while US Dollar Index Futures also traded 0.2% lower.

The U.S. president said on Tuesday that Washington would pause an operation aimed at restoring commercial shipping through the Strait of Hormuz and touted “great progress” towards a “final agreement” with Tehran.

The comments helped calm markets rattled earlier this week by war triggered by Trump’s “Project Freedom” initiative, which had prompted a military response from Iran.

The easing in tensions also weighed on oil prices, which extended losses in Asian trading on Wednesday after surging to multi-year highs earlier in the week. Lower crude prices helped reduce inflation concerns for the economies of oil-importing Asian countries, supporting currencies.

The yuan’s onshore pair USD/CNY edged down 0.2%, while the yen’s USD/JPY traded flat.

The Indian rupee’s USD/INR dropped 0.2%, while the Singapore dollar’s USD/SGD ticked down 0.1%.

The won outperformed with the USD/KRW pair declining 1.2%.

Data on Wednesday showed consumer prices rose 2.6% year-on-year in April, accelerating from 2.2% in March and marking the fastest pace since mid-2024.

The rise was driven in part by higher fuel costs and service prices.

The stronger-than-expected reading reinforced expectations that the Bank of Korea could lean toward further policy tightening.

China’s services sector data pointed to steady economic momentum. The private-sector China RatingDog Services PMI rose to 52.6 in April, beating expectations and indicating a faster expansion in business activity, supported by resilient domestic demand.

The Australian dollar’s AUD/USD pair jumped 0.7%, extending gains after the Reserve Bank of Australia delivered a rate hike a day earlier, with markets positioning for a relatively hawkish policy outlook.