US President Donald Trump said on social media on Saturday that a memorandum of understanding on a peace deal with Iran had been “largely negotiated,” with both countries and mediators ⁠in Pakistan reporting progress. However, on Sunday Trump said on Truth Social the US blockade on Iranian ships in the Strait of Hormuz would “remain in full force and effect until an agreement is reached, certified, and signed”.

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The rand strengthened to R16.31/$ early on Monday morning, its best level since the first week of May.

Along with other currencies, the rand benefited as hopes of ‌a deal to reopen the Strait of Hormuz ⁠pushed oil prices below $100 per barrel, even as the US played down ⁠the chances of reaching an agreement with Iran soon.

The US dollar lost ground against most currencies.

The rand traded close to R16.70 a week ago.

Many ‌global markets are closed for holidays on Monday, thinning liquidity across the region. The Australian dollar advanced 0.5% at $0.7162, while its kiwi counterpart tacked on 0.4% to $0.5869.

"There are early signs ‌that risk sentiment remains supported, early Sydney trade revealing a broad-based selloff in the USD, with 'riskier' currencies like the AUD benefitting as a result," analysts from Westpac wrote in a research note.

The US dollar index, which measures the greenback's strength against a ‌basket of six ⁠currencies, slipped 0.1% to an intraday low of 98.95, its weakest level since May 18.

Oil markets tumbled on hopes of a peace deal, with Brent crude prices down 5.4% to $97.91 a barrel while U.S. West Texas Intermediate was at $91.10 a barrel, off 5.7%.

Over the weekend, there were conflicting signs on a peace deal. US President Donald Trump said on social media on Saturday that a memorandum of understanding on a peace deal with Iran had been "largely negotiated," with both countries and mediators ⁠in Pakistan reporting progress. However, on Sunday Trump said on Truth Social the US blockade on Iranian ships in the Strait of Hormuz would "remain in full force and effect until an agreement is reached, certified, and signed". There ⁠was no immediate response from Iran's government.

In the markets, there was cautious optimism that a deal would eventually be reached.

"Markets have become conditioned to be incredibly patient on a tangible breakthrough, but the base case of a deal remains firm, ⁠with the weekend news providing further conviction, even if the timing remains ‌unclear," said Chris ‌Weston, head of research at Pepperstone Group Ltd in Melbourne. Bitcoin was up 0.5% at $76 961.76, while ether was flat at $2 091.65.

Additional reporting by News24.