The dollar fell to its lowest level in one month, while the euro, the yen, and the Australian and New Zealand dollars rose strongly during Asian trading on Wednesday, after Donald Trump announced his approval of a two-week ceasefire with Iran.

The Japanese yen rose by 0.7% against the dollar to reach 158.50 yen per dollar. The euro also climbed by 0.7% to $1.1677, while the British pound rose by 0.8% to $1.3403.

The Australian dollar jumped by 1.2% to $0.7063, while the New Zealand dollar rose by 1.1% to $0.5795.

Trump had previously threatened to launch extensive attacks on civilian infrastructure in Iran, which sparked international condemnations after he issued an unusual warning in which he said that "an entire civilization will die tonight" if his demands were not met.

But investors' appetite for risk returned quickly after the announcement of the ceasefire, less than two hours before the expiration of the deadline set by Trump for Tehran to reopen the Strait of Hormuz.

Ray Attrill, head of currency strategy at National Australia Bank in Sydney, said that in the event of reopening the strait "we may witness the continuation of the upward wave driven by the increased appetite for risks that we are seeing currently."

He added: "But much must happen during the next fourteen days," pointing out that currencies may be vulnerable to a correction in their recent movements during this period, and that "markets still need a measure of skepticism and caution."

The U.S. Dollar Index, which measures the strength of the dollar against a basket of six major currencies, declined for the third consecutive day to 98.943, which is its lowest level since March 11.