HONG KONG: The dollar ⁠nursed steep losses against major currencies on Tuesday in a wild start to the week after U.S. ‌President Donald Trumpdelayed the bombing of Iran's power grid, a move that allayed fear of a prolonged war in the Middle ​East.

Trump wrote on his Truth Social platform that the U.S. and Iran had held "very good and productive" conversations about a "complete ​and total ​resolution of hostilities in the Middle East". Iran denied it had engaged in any direct negotiations.

The contrasting comments left markets on edge after a risk-on rally immediately after Trump's post in ⁠which he postponed the bombing for five days. Still, markets were mindful of the war all but halting shipments of about one-fifth of the world's oil and liquefied natural gas through the Strait of Hormuz.

Sterling eased 0.5% to $1.33925 after jumping nearly 1% on Monday, while the euro was down 0.2% at $1.1593 after gaining 0.4% in the ​previous trading session.

The ‌dollar index, which ⁠measures the U.S. currency against ⁠a basket of peers, rose nearly 0.2% to 99.35 after dipping to near a two-week low on Monday.

"The news ​overnight is giving a breather to volatility at least, but it's difficult to ‌see that this is going to trigger a risk-on trend," said ⁠Rodrigo Catril, a currency strategist at National Australia Bank.

However, Trump's policy track record was keeping markets wary, with traders uncertain whether this marked the start of genuine negotiations or simply a retreat from volatility-inducing threats, he said.

The Australian dollar fell 0.2% to $0.6993 in early trade, pulling back from a six-week high. The New Zealand dollar was down 0.23% at $0.5845.

Oil prices edged higher after plunging more than 10% on Monday, with Brent crude futures retopping $100.94 a barrel as supply fear keeps sentiment cautious.

"The key question is whether participants see this as a genuine extension that brings a deal closer, or simply a delay that prolongs uncertainty," said ‌Chris Weston, head of research at Pepperstone.

"The U.S. dollar has seen selling ⁠on the back of the move lower in crude and the broader ​repositioning in risk. However, there is little conviction in the move, and conditions remain ripe for sharp reversals."

The yen was steady at 158.61 a dollar after Japan's core consumer inflation rate hit 1.6% in February. That was below the ​Bank of Japan's ‌2% target for the first time in nearly four years, complicating the bank's ⁠efforts to justify further interest rate hikes. (Reporting by ​Jiaxing Li in Hong Kong and Ankur Banerjee in Singapore; Editing by Christopher Cushing)