EUR/USD, AUD/USD Steady as Iran Tensions Contained; USD Upside Risks Persist

Geopolitical tensions surrounding Iran have had limited immediate impact on major forex pairs, though analysts warn that upside risks for the U.S. dollar remain intact. EUR/USD continues to trade within a tight range as markets assess the potential for escalation, while USD/CHF reflects modest safe-haven demand for the Swiss franc. AUD/USD has held relatively steady, suggesting that risk appetite has not deteriorated significantly despite the geopolitical headline risk. EUR/CHF is also in focus as a barometer of European risk sentiment. The muted market reaction suggests traders are pricing in a contained scenario, but any escalation in Middle Eastern tensions could trigger a rapid flight to safety, boosting the dollar and yen while pressuring commodity-linked currencies like the Australian dollar. The Federal Reserve's policy stance continues to underpin potential dollar strength, with rate expectations remaining a key driver. Traders should maintain tight risk management given the elevated geopolitical uncertainty and watch oil price movements as a leading indicator for broader FX volatility.