The FX market has been a little interesting these past two weeks, with both the Australian dollar and the euro rebounding. I heard that the US and Iran might restart negotiations, and market sentiment flipped instantly—risk assets started to look more attractive.

The Australian dollar against the US dollar has already risen to 0.7148, while the euro is also hovering around 1.18, with both setting fresh nearly one-month highs. Oil has fallen back from its highs, and the US dollar’s appeal as a safe haven is fading, giving these two currencies a chance to catch their breath. Many analysts are betting that the Australian dollar could surge to 0.75 in the second half of the year, mainly because the Reserve Bank of Australia still plans to raise rates, with yields there to be had.

But will the euro keep rising? Institutional views differ quite a lot. Some say that if the Middle East situation truly eases, the euro could push toward 1.20. But others are more cautious, believing the euro’s short-term upside could have a ceiling unless the US-Iran negotiations deliver a real breakthrough. Another risk is that market expectations for European Central Bank rate hikes may be too aggressive—if the ECB doesn’t act in April, the euro could be pressured.

To be honest, market sentiment is somewhat overblown right now. Some strategists have reminded people not to get too excited too early, because the risk of energy price shocks is still there. If this thing comes again with another wave, the global economy would suffer too. Has the US dollar’s safe-haven attribute really disappeared? Maybe we’ll have to wait and see.