Energy prices easing off recent highs are giving Asian currencies some relief, though shifting geopolitical tensions continue to keep market risks firmly two-way, according to OCBC strategists.

Oil prices pulled back after U.S. President Donald Trump said the Middle East conflict could be over “very soon” and assured that the Strait of Hormuz would remain safe. Trump also noted that the U.S. is offering political risk insurance to tankers operating in the Gulf during the brief disruption.

A softer dollar has revived emerging market carry trades, but markets remain on edge, OCBC analysts Sim Moh Siong and Christopher Wong noted. The longer the Strait of Hormuz remains closed, the greater the potential impact on oil production.

OCBC maintains a neutral view on the U.S. dollar until clearer signs of de-escalation emerge. The DXY dollar index is down 0.4% at 98.79.