The dollar fell against all its major peers after the US and Iran agreed to a two-week ceasefire, sapping demand for the currency as a haven.

Bloomberg’s gauge of the greenback slid as much as 0.9% to a four-week low as the agreement drove down Treasury yields, further trimming demand for the currency. The dollar weakened the most against its risk-sensitive counterparts such as the South African rand and South Korean won.

US-Iran ceasefire

Iran said the ceasefire agreement meant it would guarantee safe passage for vessels through the Strait of Hormuz for two weeks, helping ensure a greater supply of oil to global markets.

“The path of least resistant is a risk positive one and favours the dollar down, and risk assets up,” said Rodrigo Catril, a strategist at National Australia Bank Ltd. in Sydney. “For markets, the ultimate test will be whether vessels can travel safely through the Strait and in time, as the data comes through, we can assess the inflationary impact from the conflict so far.”

Dollar emerged as safe haven amid war

The dollar had strengthened since the start of the war in late February due to its perceived haven qualities and the fact that the US economy benefits from higher crude prices as it exports oil.

China’s yuan climbed to three-year high versus the dollar following the ceasefire news, and after the People’s Bank of China strengthened the currency daily fixing by the most in a month. The New Zealand dollar also got an additional boost from news the central bank had discussed the possibility of a rate hike at its policy meeting on Wednesday.