USD & Oil Rise on Potential US Strike on Iran; WTI Holds $65.72

WTI crude oil edged up 9 cents to $65.72 per barrel amid escalating geopolitical tensions, as Israeli diplomatic sources reported to Ynet that US strikes on Iran are increasingly likely. The move higher came despite bearish headwinds from potential OPEC+ production hikes over the weekend and a substantial US weekly crude inventory build. The market's resilience in the face of these bearish factors suggests traders are pricing in a geopolitical risk premium, effectively 'buying the rumor' of a potential military escalation. New Iranian proposals reportedly fail to meet American threshold conditions, raising the probability of conflict. For forex markets, heightened Middle East tensions typically strengthen safe-haven currencies such as USD, JPY, and CHF while pressuring risk-sensitive commodity currencies like AUD and CAD. Oil-linked currencies such as CAD could see mixed signals from rising crude prices versus broader risk-off sentiment. Traders should monitor developments closely, as an actual strike could trigger sharp moves across USD/CAD, USD/JPY, and oil-correlated pairs.