Traders poured into the dollar in March, viewing it as a bastion during the ongoing crisis in the Middle East

The U.S. dollar hovered around six-week lows on Wednesday, as risk appetite continued to improve on hopes of a prolonged ceasefire in the Iran war.

The continued pivot by investors into risky assets such as equities over the last few weeks has weighed on the dollar, which has become a safe haven asset of choice during the ongoing Middle East war.

At 20:57 GMT, the US Dollar Index slid 0.1% to 98.06.

Traders poured into the dollar in March, viewing it as a bastion during the ongoing crisis in the Middle East. Boosting the appeal of the currency was the belief that the U.S. economy, a net energy exporter, is relatively insulated from an energy shock sparked by the effective closure of the vital Strait of Hormuz waterway off of Iran’s southern coast.

But the dollar is now floating only just above pre-war levels, with the prospect of a permanent halt to hostilities denting the currency’s safe-haven standing.

Markets are increasingly pre-empting a positive outcome as the U.S. and Iran prepare for a new round of talks. We still think caution is warranted and the balance of risks for the dollar now looks tilted to the upside, analysts at ING said in a note.

Oil prices seesawed, but remained below the $100 a barrel threshold, as traders kept close tabs on supply flows in the Strait of Hormuz, the critical chokepoint through which a fifth of the world’s oil flows. Compared to before the start of the war in late February, crude has stayed elevated, underpinning fears over a spike in inflationary pressures around the world.