(Updates prices, adds analyst quote in paragraphs 6-7)

By Gregor Stuart Hunter

SINGAPORE, April 8 (Reuters) - The dollar sank to its

lowest level in a month while the euro, yen, Aussie and kiwi

rallied hard in Asian trading on Wednesday after U.S. President

Donald Trump said he had agreed to a two-week ceasefire with

Iran.

The yen strengthened 0.7% against the greenback to

158.50 per dollar. The euro was up 0.7% at $1.1677, while

the British pound appreciated 0.8% to $1.3403.

The Australian dollar climbed 1.2% to $0.7063and its

New Zealand counterpart jumped 1.1% to $0.5795.

Trump had earlier threatened widespread attacks on Iran's

civilian infrastructure, drawing international condemnation

after issuing an extraordinary warning that "a whole

civilization will die tonight" if his demands were not met.

Investors' risk appetite rapidly returned after the

ceasefire announcement, less than two hours before Trump's

deadline for Tehran to reopen the Strait of Hormuz would have

expired.

If the Strait is reopened, "we could be able to consolidate

the risk-on rally that we're seeing," said Ray Attrill, head of

FX strategy at National Australia Bank ( NAUBF ) in Sydney.

"But a lot has to happen in the next 14 days," he said,

adding that currencies would be vulnerable to a retracement of

their recent moves in the interim. "Markets still need to

proceed with a degree of scepticism."

The U.S. dollar index, which measures the greenback's

strength against a basket of six currencies, weakened for a

third consecutive day to 98.943, the lowest since March 11.

Cryptocurrencies rallied, with bitcoin advancing3.2%

to $71,514.03, and ether climbing5.7% to $2,235.35.