U.S. Dollar [Yonhap News Photo]

The value of the dollar fell by the largest margin in over a month on the 11th (local time) after U.S. President Donald Trump announced that a memorandum of understanding (MOU) to end hostilities with Iran could be signed as early as this weekend.

The Bloomberg Dollar Spot Index fell 0.3% in the afternoon. This is the largest daily decline since April 6th.

Earlier, President Trump told reporters at a White House event, "We have just reached a great settlement regarding the war with Iran," adding, "Only the final coordination of documents remains." He also indicated that a signing ceremony could take place in Europe this weekend.

President Trump's remarks also led to a drop in oil prices and a surge in U.S. Treasury prices.

"The news this afternoon has created a much more positive atmosphere and raised expectations of an imminent peace agreement," said Alex Cohen, a currency strategist at Bank of America (BofA). "This has acted as a weakening factor for the dollar."

According to Bloomberg, the dollar had risen 1.6% since late February, when the U.S. and Israel attacked Iran, driven by a preference for safe-haven assets. Since then, the dollar has often moved in tandem with oil prices, reacting sensitively to fluctuations in crude oil.

In the options market, the cost of hedging against dollar strength decreased on this day, but traders still hold an optimistic outlook for the dollar, Bloomberg reported.