investingLive Asia-Pacific FX news wrap: Hormuz deal hopes sink oil

• Huawei targets 1.4nm chip density by 2031 with new design law to beat US sanctions
• Rupee may be undervalued after recent slide, RBI governor Malhotra says
• New Fed chair Warsh faces hawkish FOMC as rate cut hopes fade on Iran war
• PBOC sets USD/ CNY reference rate for today at 6.8318 (vs. estimate at 6.7880)
• Singapore central bank signals rate stability ahead as Singapore Q1 growth beats forecasts
• Singapore smashes growth estimates but trade ministry flags Middle East risks
• Lagarde flags ECB inflation forecast revision ahead of June 11 rate decision
• NZIER shadow board backs RBNZ hold this week (May 27) at 2.25% but rate rises seen ahead
• Oil is trading even lower after its big gap down at Globex reopen
• Hope is up. So is AUD, equites (ES +0.4% , NQ +0.6%) Globex trade now open for the week.
• Iraqi crude tanker clears Gulf of Oman as Hormuz closure keeps most ships trapped
• Economic and event calendar in Asia today, Monday, May 25, 2026, is empty
• Iran nuclear deal 95% done but signing still days away, US official says
• Weekend: Hormuz deal in outline but nuclear and sanctions gaps keep agreement at bay
• Monday open indicative forex prices, 25 May 2026

At a glance:

• Oil dropped to two-week lows below $100 a barrel as US-Iran deal optimism outweighed the blockade’s continued hold on Hormuz traffic
• Trump walked back weekend optimism on Sunday, saying there was no rush for a deal and the naval blockade stays until an agreement is signed, certified and ratified
• Risk assets firmed broadly: S&P 500 futures up 0.7%, Nasdaq futures up 1.2%, spot gold up 1.4%
• The dollar weakened against major currencies, with the yuan fixing at its strongest against the dollar since February 2023 after the PBOC set the USD/CNY reference rate at a three-year high for the Chinese currency
• The Nikkei surged to successive record highs, clearing 64,000 and then 65,000 for the first time
• Two LNG tankers exited the Strait of Hormuz bound for Pakistan and China; a supertanker carrying Iraqi crude for China cleared the Gulf on Saturday after nearly three months stranded

Asia Pacific markets opened the week in a constructive mood, with deal optimism doing most of the work even as the diplomatic picture remained messier than the price action implied.

Oil was the pivot point. Prices slipped below $100 a barrel for the first time in two weeks as traders leaned into weekend reports that Washington and Tehran had largely negotiated a memorandum of understanding to reopen the Strait of Hormuz. That move rippled outward in the way Iran-related relief trades typically do: the dollar softened, equities futures firmed, and gold added to recent gains, with the weaker greenback making dollar-priced bullion more accessible to buyers in other currencies.

The optimism had a short shelf life diplomatically, if not in markets. Trump posted on Truth Social on Sunday that the naval blockade on Iranian vessels would remain fully in place until any deal is certified and signed, and that his representatives had been told not to rush. The gap between the Saturday MOU framing and the Sunday blockade-stays message was wide enough to give pause, yet markets chose to price the direction of travel rather than the current state of play.

Shipping data offered some tentative corroboration of easing pressure. Two LNG tankers moved through the strait on Monday, one heading to Pakistan and one to China, while a supertanker loaded with Iraqi crude for China had exited the Gulf on Saturday after sitting stranded for close to three months. Throughput remains far below pre-war norms, but the direction is the right one.

Elsewhere in the session, the Nikkei delivered the headline of the day, clearing 64,000 and then pushing on through 65,000 for the first time on record. The People’s Bank of China added a policy signal of its own, fixing the USD/CNY reference rate at its strongest level for the yuan since February 2023, a move read as a quiet endorsement of Chinese currency strength in the current environment.

The UK, much of Europe and the US is out on holiday today. Watch out for thin liquidity sharp moves in markets that are still trading.

This article was written by Eamonn Sheridan at investinglive.com.