Asian Markets

Monday on Asian currency markets began with a sight rarely seen in recent weeks — the dollar was retreating while currencies from Tokyo to Mumbai moved higher in unison. The U.S. dollar index slipped by two-tenths of a percent, and futures on the index fell by roughly the same amount. The move was modest, barely noticeable on the charts, but behind it stood a tectonic shift in sentiment. The reason was a few words spoken by Donald Trump over the weekend. Words that may have marked the beginning of the end of this year’s most destructive geopolitical crisis. And Asian currencies, being among the most sensitive barometers of global risk appetite, reacted instantly.

Over the weekend, the U.S. president made a statement markets had been waiting months to hear. The United States and Iran had “largely agreed” on a framework deal to resolve the conflict. The key point was the resumption of shipping through the Strait of Hormuz — the very artery whose blockade had sent oil prices soaring and triggered a global chain reaction of inflation. Separate sources added further detail: Iranian and Pakistani mediators also reported progress. The picture looked almost idyllic.

But Trump would not be Trump without adding a note of uncertainty to the optimism. Almost immediately after the encouraging statement, he clarified that he was in no hurry to finalize a deal. Iran, for its part, largely rejected U.S. demands regarding the transfer of enriched uranium stockpiles — one of the most contentious points in the negotiations. Contradictory signals, mixed messages, swings between hope and skepticism. Classic Trump diplomacy, in which no one knows until the very last moment whether an agreement will be signed or another escalation will follow.

Still, markets exhausted by months of uncertainty chose to focus...