Dollar pulls back as US-Iran attacks pause, oil drops

Against the yen, the U.S. dollar was down 0.2% at 163.585 yen, its biggest decline since July 10. The euro was up 0.2% at $1.1397, while the British pound rose by a similar magnitude to $1.3353.

Oil prices sank in early Asian trade, with Brent crude tumbling 4.7% to $92.19 after the U.S. military temporarily halted its two-week long strikes. Iran will halt its own attacks as long as the U.S. does the same, a senior Iranian official told Reuters on Sunday, following a China-led push to resume stalled diplomatic efforts in Pakistan to end the war.

"Market sentiment was supported by reports that Pakistan and Iran were exploring new peace talks with the U.S. and that oil exports from the Middle East continued to flow", Westpac analysts wrote in a research report. "Over the weekend, the U.S. paused strikes against Iran as tensions in the region continued to escalate."

In other major currencies, the New Zealand dollar was 0.3% higher at $0.5802, while its Australian counterpart climbed 0.2% to $0.6997.

In cryptocurrencies, bitcoin was up 0.9% at $65,193.62 while ether climbed 1.9% to $1,948.00.

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