The dollar was steady on Tuesday but ‌set for a seventh straight daily drop, as markets weighed supply risks from a US blockade of Iranian shipping in the Strait of Hormuz against hopes for a diplomatic breakthrough between Washington and Tehran.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.05% to 98.39, hovering near its lowest since March 2, the first trading day after the US-Israeli war with Iran erupted.

The dollar’s seven-day losing streak would be its first since December last year.

The ⁠euro rose 0.02% to $1.1759, while sterling tacked on 0.01% to $1.3505. The yen edged up 0.16% to 159.19 per dollar.

US President Donald Trump said the ​US military began a blockade of ships leaving Iran’s ports on Monday, but added Iran had been in touch and wanted to make a ​deal with Washington despite a tense weekend meeting in Islamabad.

Reuters reported negotiations between Washington and Tehran were still alive.

At the same time, US Vice President JD Vance said in an interview that the US expects Iran to make progress on opening the Strait of Hormuz.

The series of comments “has brought some relief to the markets, as ​it has renewed the possibility of a diplomatic resolution,” said Keiichi Iguchi, senior strategist at Resona Holdings.

The greenback has benefited ​from a safe-haven bid since the conflict began, and the US, a net energy exporter, is also relatively better positioned to handle oil disruptions ‌than ⁠other nations.

US crude futures were down more than $2 in early Asian trade at $96.99 a barrel.

The Japanese yen, though, remains vulnerable to selling pressure on concerns that the nation’s trade balance will deteriorate as the risk of crude oil price staying elevated increases, Iguchi said.

Moreover, chances of an interest rate hike this month by the Bank of Japan, once seen as a strong possibility, have receded ​as fading hopes for an end ​to the Iran war ⁠keep markets volatile and muddy the economic outlook.

Interest rate swaps on Monday indicated a 40% chance of a BOJ rate hike this month, down from 57% from Friday, according ​to Tokyo Tanshi data.

“We’re very much of the view that if the BOJ decides to stand ​pat at the ⁠end of April, then the risks are that the dollar-yen exchange rate is going to punch up through 160 (yen against the dollar),” said Ray Attrill, head of forex strategy at National Australia Bank, in a podcast.

Markets see 160 yen per dollar as a red line that raises the ⁠odds of ​intervention.

BOJ Governor Kazuo Ueda on Monday emphasised vigilance against fallout from the Iran war, shifting ​focus from the central bank’s usual pledge to steadily raise interest rates.

The Australian dollar weakened 0.23% versus the greenback to $0.7078. New Zealand’s kiwi weakened 0.15% versus the ​greenback to $0.5857.

In cryptocurrencies, Bitcoin gained 1.66% to $74,409.95. Ethereum rose 5.17% to $2,369.96.