Asian currencies held their value against the U.S. dollar on August 5, 2026, and could gain more ground if a key shipping route called the Strait of Hormuz reopens, the Wall Street Journal reported. A day earlier, Qatar said mediators were making progress in efforts to end the U.S.-Iran war, which pushed oil prices down, Reuters reported on August 4.

The Strait of Hormuz is a narrow waterway that connects the Persian Gulf to the open ocean. About a fifth of the world's oil and liquefied natural gas passes through it, according to Reuters. By late March 2026, the strait was effectively closed. Iran had given the U.S. a proposal to reopen the waterway and end the war as early as April, Reuters reported, citing Axios. By July 13, ships were moving through the strait again, but only "for a fee," after new missile and drone strikes, Reuters reported at the time.

The dollar's path through this period has been bumpy. The WSJ Dollar Index — which tracks the dollar's value against a group of major currencies — most recently stood at 97.08, up 0.35%, with the Singapore dollar strengthening slightly on Hormuz reopening hopes, the WSJ reported on June 18. On May 29, the index was at 95.58, up 0.61% for the month, as markets swung between hope and doubt about a U.S.-Iran deal, the WSJ reported. On July 8, global stock markets rallied on the prospect of an agreement, and the dollar index barely moved, rising just 0.001%, the WSJ noted.

When the world feels dangerous, investors flock to currencies they see as safe, driving their value up. The Japanese yen is one of those currencies. But when tensions ease, that extra value fades. So the yen was likely to stay weak as hopes for a diplomatic solution picked up, the WSJ reported on July 22. The same pattern hit the euro on July 13, which fell 0.26% to $1.1383, Reuters reported.

Asian currencies had been gaining strength well before the Hormuz situation reached its current moment. On January 28, 2026, a Bloomberg index of Asian currencies rose as much as 0.4%, and an emerging-market currency index hit a new record high, Bloomberg reported. Not every currency in the region moved the same way, though. According to a January 2026 U.S. Treasury report, the Vietnamese dong was one of the few Asian currencies to lose value against the dollar in the first half of 2025, falling 5.8% and 5.5% on two measures of exchange rate strength.

The broader context here is a market weighing two competing forces. On one side is real progress toward ending the U.S.-Iran conflict, with Qatar's August 4 statement offering the latest sign that talks are moving forward. Oil prices fell on that news, and Asian currencies — which are sensitive to energy costs — held steady, expecting further gains. On the other side is a history of diplomacy that keeps starting and stopping: the strait went from closed in March, to an Iranian proposal in April, to a "for a fee" arrangement in July, to fresh hopes for a full reopening in August. Each shift has moved currencies sharply, but those moves have reversed every time.

What matters most is whether any agreement actually sticks. The past five months have brought a repeating cycle: a hopeful headline sends investors into riskier assets, then the optimism fades. The dollar index has swung from 95.58 in late May to 97.08 in mid-June, with some days barely moving and others jumping several tenths of a percent. The key question is whether Qatar's mediation leads to a lasting reopening of the strait, or just another temporary fix. The calm in currency markets on August 5 suggests investors expect modest gains but have not yet bet on a permanent resolution. That gap between hope and proof is where the risk lies.