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The euro rose 0.88% to $1.1696, , after touching its highest level since early March and the pound gained 1.2% to $1.345 , while the dollar slid 0.84% against the yen to 158.31 .

U.S. President Donald Trump had earlier threatened widespread attacks on Iran’s civilian infrastructure, drawing international condemnation after issuing an extraordinary warning that “a whole civilization will die tonight” if his demands were not met by Tuesday evening.

The currency moves coincided with a dramatic rally in stocks and government bonds, as investors’ risk appetite rapidly returned ⁠after the ceasefire was announced less than two hours before Trump’s deadline for Tehran to reopen the Strait of Hormuz would have expired.

“The moves can be quite temporary, but at least at this moment, it makes sense to counter the March resurgence of the dollar based on optimism and based on this development,” said Juan Perez, senior director of trading at Monex USA.

Trump said the deal was subject to Iran’s agreement to pause its blockade of oil and gas supplies through the strait, which typically handles about one-fifth of global oil shipments.

The dollar has been the major beneficiary of the Iran war in the currency market, in part due to the fact that the U.S. is a net energy exporter and, therefore, less exposed to the economic hit that importers like Japan and many European countries might face.

The index, which measures the dollar’s performance against a basket ‌of ⁠six currencies, weakened for a third day to 98.526, its lowest level since February. However, the dollar is still above where it was prior to the onset of the war, showing investor sentiment has not fully recovered.

“Yes, oil prices have retreated. Yes, the dollar has given back some of its gains. But I would be cautious in terms of chasing it at this point,” said Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets.

“Obviously, people are reluctant to put a lot ⁠of will behind this relief rally because there are so many caveats and so many uncertainties and so many potential hurdles to go through between now and any eventual resolution,” he said.

A key effect of the surge in energy prices has been a rapid shift in expectations among investors for higher interest rates ⁠this year to contain any pickup in inflation. With the steep drop in oil on Wednesday, traders were once again pricing a 50% chance of a Federal Reserve rate cut by the end of this year, having earlier seen no such move.

Elsewhere, the New Zealand dollar rose 1.83% to $0.5837, extending gains after the Reserve Bank of ⁠New Zealand kept its policy rate at 2.25% on Wednesday for a second straight meeting, choosing to sit tight as it gauges the economic fallout from the war. But the central bank signaled it is ready to act if inflation pressures intensify.

Reporting by Hannah Lang and Amanda Cooper