By Ankur Banerjee
SINGAPORE, April 2 (Reuters) - Stocks inched higher, the dollar softened and oil slipped on Thursday as investors held their collective breath ahead of a speech from U.S. President Donald Trump that could outline the end of the war in the Middle East and boost risk appetite.
The prospect of the end to the month-long U.S.-Israel war with Iran has lifted global stocks and knocked the dollar off its recent highs in the past two sessions after a brutal March where soaring oil prices sent
risk assets on a tailspin.
MSCI's broadest index of Asia-Pacific shares outside Japan was a tad higher in early trading after clocking its biggest one-day jump on Wednesday since November 2022. Japan's Nikkei was poised for a strong start.
The United States will be "out of Iran pretty quickly" and could return for "spot hits" if needed, Trump told Reuters on Wednesday, ahead of his scheduled primetime address to the nation at 0100 GMT on Thursday.
Trump and his top officials have offered a variety of timelines for ending the war. He said on Tuesday that the U.S. could end its military campaign against Iran within two to three weeks.
Analysts and investors will analyse the speech to gauge when and how the Strait of Hormuz, a major fuel shipment route, would reopen and ease the bottleneck in supply that has hit Asian economies hard.
"A U.S. exit within the next few weeks would certainly remove one massive layer of tension," said Tony Sycamore, market analyst at IG. "However, it doesn’t automatically guarantee smooth sailing and energy flow through the Strait of Hormuz."
"The Iranian response will be critical, particularly whether Tehran continues to leverage its geographical position by imposing tolls or selective inspections on passing tankers and strikes on its neighbouring countries' energy infrastructure," said Sycamore.
Iran has fired repeatedly on Gulf countries, some home to U.S. bases, and is using the Strait of Hormuz, which carries a fifth of global oil and liquefied natural gas, as leverage.
Higher energy prices in March stoked fears of global inflation with worries about slowing growth also sapping sentiment.
The U.S. dollar has been the haven of choice among investors during the tumult but the prospect of a ceasefire has led to the greenback weakening this week.
The euro last bought $1.1591 in early trading, holding on to its recent gains. The Japanese yen was at 158.68 per U.S. dollar inching away from the crucial 160 level that traders worry could spur Tokyo to step in and intervene.
The front-month Brent contract for June fell 2.7%, to settle at $101.16 per barrel, bouncing off a session low of $98.35.
(Reporting by Ankur Banerjee in Singapore; Editing by Stephen Coates)
