USD Weakens as Iran-Israel Tensions Escalate, Oil Surges Above $75

The US dollar declined across major pairs as geopolitical tensions between Iran and Israel intensified, with WTI crude oil surging $1.50 to $75.50 per barrel on fresh missile launches. Safe-haven currencies JPY and CHF gained 0.4% and 0.3% respectively against the greenback, while risk-sensitive pairs like AUD/USD and NZD/USD fell 0.5-0.6%. Markets are pricing in potential US military intervention after Iran launched 10-15 missiles toward northern Israel, prompting Israeli air defense responses. The escalation pushed oil to its highest level since January, raising inflation concerns that could complicate central bank policies. EUR/USD held steady near 1.0820 as European diplomats scheduled emergency talks with Iran for Friday. Technical indicators show USD/JPY breaking below 149.50 support, targeting 148.80, while gold surged toward $2,380. Traders should prepare for heightened volatility as the situation develops, with energy-linked currencies like CAD potentially benefiting from sustained oil strength.