TOKYO/LONDON: There was a fragile calm across currency markets on Thursday as traders kept their eyes fixed on whether the ceasefire between the U.S. and Iran would hold, a day after its announcement sent the dollar tumbling across the board.

The deal appeared to be on thin ice, as Israel continued its parallel war against the Iran-aligned militia Hezbollah in Lebanon, while Tehran accused both Israel and the U.S. of violating the agreement and said that proceeding with peace talks would be "unreasonable."

The Strait of Hormuz also remained shut to vessels sailing without a permit and shippers said they needed more clarity before resuming transit, sending oil prices higher.

U.S. President Donald Trump said all of its ships, aircraft, and military personnel would stay in place in and around Iran until it fully complied with a deal.

The uncertainty left currency markets on edge.

The euro was flat at $1.1661. It gained 0.6% on Wednesday, but retreated late in the day having touched a one-month high of $1.1721 earlier in the session.

It was a similar story for the pound and Japanese yen. Sterling was flat at $1.3393, after gaining 0.77% on Wednesday, but retreating from as high as $1.348.