EUR/USD, USD/JPY React as Oil Markets Price Iran Scenarios

Foreign exchange markets are actively trading geopolitical what-if scenarios surrounding Iran, with oil price fluctuations driving notable moves across EUR/USD, USD/JPY, and the broader US Dollar Index. Brent crude futures remain elevated as traders assess the probability of supply disruptions stemming from heightened tensions in the Middle East, with any escalation potentially removing significant barrels from the global market. The Japanese yen has seen safe-haven demand amid the uncertainty, putting mild downward pressure on USD/JPY, while EUR/USD is navigating the interplay between risk aversion flows and energy cost implications for the eurozone economy. The US Dollar Index futures are reflecting mixed positioning as the greenback benefits from safe-haven flows but faces headwinds from potential economic slowdown risks tied to higher energy costs. Traders are closely monitoring diplomatic developments and military posturing for actionable signals. The correlation between oil price spikes and currency movements remains a key factor, with energy-importing nations' currencies most vulnerable to further crude price advances.