Dollar Nears Peak, Iran War Risk Drives Safe Haven Demand
The US dollar strengthened on Monday (March 30th), approaching a 10-month high, as investors returned to seeking assets considered safe amid uncertainty over the course of the Iran war. The dollar index (DXY) rose 0.2% to 100.34 at 8:31 a.m. US time, keeping the greenback strong after rallying throughout March and on track for its biggest monthly gain since July 2025.
The dollar's gains came as markets remained nervous about the weeks-long effective closure of the Strait of Hormuz, which has impacted crude oil tanker traffic and driven up energy prices. This situation has raised concerns about global inflation, particularly for energy importers in Asia such as Japan and South Korea, as well as eurozone countries that remain dependent on gas imports from the Persian Gulf region.
Amid the energy turmoil, the dollar is seen as enjoying "relative protection" because the US is seen as more protected than other importing regions, in line with its status as a net exporter. ING believes that without a clear conciliatory signal from Iran, it is difficult to see the dollar relinquishing this month's gains anytime soon.
The market also continues to monitor fast-moving developments in the Middle East. US President Donald Trump said there had been "great progress" in negotiations to end the war, but reiterated his threat to attack Iranian power plants if talks fail.
The focus next turns to a speech by Fed Chairman Jerome Powell and a series of US economic data, including the release of March's jobs data, which could shape expectations for interest rate direction and fuel volatility in the currency market. (yds)
Source: newsmaker.id
