Asian currencies held firm against the U.S. dollar in early trading on August 5, 2026, and could climb further on expectations that the Strait of Hormuz may fully reopen, the Wall Street Journal reported. The shift came a day after Qatar said mediators were making progress toward ending the U.S.-Iran war, a development that pushed oil prices lower, Reuters reported on August 4.

The Strait of Hormuz is a narrow shipping lane connecting the Persian Gulf to the open ocean, and roughly one-fifth of the world's oil and liquefied natural gas flows through it, according to Reuters. By late March 2026, the strait was effectively closed. Iran had delivered a proposal to the U.S. for reopening the waterway and ending the war as early as April, Reuters reported, citing Axios. By July 13, the strait was operating "for a fee" after fresh exchanges of missile and drone strikes, Reuters reported at the time.

The dollar's path through this period has been choppy. The WSJ Dollar Index — a measure of the dollar's value against a basket of major currencies — most recently stood at 97.08, up 0.35%, with the Singapore dollar strengthening slightly against the greenback on Hormuz reopening hopes, the WSJ reported on June 18. Earlier, on May 29, the index sat at 95.58, up 0.61% for the month, as markets bounced between optimism and skepticism about a near-term U.S.-Iran deal, the WSJ reported. On July 8, global stock markets rallied on the prospect of a U.S.-Iran agreement, and the WSJ Dollar Index moved just 0.001%, the WSJ noted.

The Japanese yen was likely to stay weak as diplomatic momentum to reopen the strait built, the WSJ reported on July 22. The yen's softness fits a pattern: when investors expect a de-escalation that would stabilize energy supplies, the safe-haven premium — the extra value investors place on currencies perceived as refuges during turmoil — that had supported the yen fades. The same dynamic pushed the euro lower on July 13, when it fell 0.26% to $1.1383, Reuters reported.

For broader context, Asian currencies had been gaining ground well before the Hormuz situation reached its current turning point. On January 28, 2026, the Bloomberg Asia Dollar Index rose as much as 0.4%, and the SCI EM currency index — which tracks emerging-market currencies — reached a fresh record high, Bloomberg reported. Not every currency in the region moved in the same direction, though. According to the January 2026 U.S. Treasury foreign exchange report, the Vietnamese dong was one of the few Asian currencies to lose value against the U.S. dollar in the first half of 2025, with effective exchange rates weaker by 5.8% and 5.5%.

The broader context here is a market weighing two competing forces. On one side is tangible progress toward a mediated end to the U.S.-Iran conflict, with Qatar's August 4 statement offering the latest signal that negotiations are advancing. Oil prices fell on that news, and Asian currencies — which are broadly sensitive to energy import costs and the availability of dollar-denominated liquidity — held steady in anticipation of further gains. On the other side is a track record of stop-start diplomacy: the strait has moved from effective closure in March, to an Iranian proposal in April, to a "for a fee" arrangement in July, and now to renewed hopes for a full reopening in August. Each pivot has produced sharp but ultimately reversible currency moves.

What matters for market participants is whether any agreement holds. The pattern across the past five months has been one of headline-driven surges in risk appetite followed by relapse. The dollar index has swung from 95.58 in late May to 97.08 in mid-June, with individual sessions producing moves as small as 0.001% and as large as several tenths of a percent. For Asian currency exposure, the key variable is whether Qatari mediation produces a sustained reopening rather than another temporary accommodation. The consolidation observed on August 5 suggests the market is positioned for incremental gains but is not yet pricing in a definitive resolution. That gap between hope and confirmation is where the risk sits.