U.S. Dollar Gains as Safe-Haven Demand Increases
The U.S. dollar strengthened on Thursday, supported by its safe-haven appeal as uncertainty persists over efforts to end the Iran conflict. Limited progress in diplomatic negotiations has encouraged investors to move toward the greenback.
By 09:27 ET, the U.S. Dollar Index rose 0.2% to 99.77. Meanwhile, the euro slipped 0.1% to $1.1542, and the British pound also edged 0.1% lower to $1.3354 against the dollar.
Mixed Signals on Iran Peace Efforts
Developments surrounding the conflict have remained unclear. Iran is reportedly reviewing a 15-point peace proposal from the United States, but tensions remain high as the White House has warned of further military action if no agreement is reached.
Political Pressure and Escalating Rhetoric
U.S. President Donald Trump stated that Iranian negotiators have behaved unpredictably and claimed that Tehran is seeking a deal to end the ongoing conflict. He urged Iran to act quickly, warning that delays could lead to serious consequences.
Trump also reiterated claims that Iran’s military capabilities have been significantly weakened following joint U.S.-Israeli operations.
Oil Prices Stay Elevated Amid Supply Risks
Oil prices remained above $100 per barrel, reflecting continued concerns over supply disruptions. Although prices have eased from recent highs near $120, they remain well above pre-conflict levels.
A key factor is the continued disruption of the Strait of Hormuz, a critical global shipping route responsible for a significant share of the world’s oil and natural gas flows. Ongoing threats in the region have effectively limited activity through the waterway.
Geopolitical Developments Add to Market Uncertainty
Further tensions escalated after Israeli Defense Minister Israel Katz announced that Alireza Tangsiri, commander of Iran’s Revolutionary Guard navy, was killed in recent strikes. He was reportedly linked to actions that contributed to the disruption of shipping in the Strait of Hormuz.
Inflation Concerns and Central Bank Outlook
The energy shock triggered by the Iran conflict has increased inflation risks globally, according to the Organization for Economic Co-operation and Development. Rising energy prices are adding pressure to the global economic outlook.
As a result, investors are increasingly expecting central banks, including the Federal Reserve, to consider further interest rate hikes in the coming months.
Dollar Strength Continues as Markets Seek Safety
Amid ongoing geopolitical and economic uncertainty, demand for the U.S. dollar has surged. The currency is now on track for a monthly gain of around 2%, reflecting its role as a preferred safe-haven asset.
Analysts note that the dollar may remain elevated unless there are clear and convincing signs of de-escalation in the Middle East.
