USD Strengthens as US-Iran War Fears Lift Oil Above $90, Risk-Off Grips Markets

The US dollar is holding firm amid heightened geopolitical risk as the US-Iran conflict continues to dominate market sentiment. Oil prices have surged back above $90 per barrel following ongoing attacks on shipping in the Strait of Hormuz, a critical chokepoint for global energy supply. Markets had briefly priced in a de-escalation after former President Trump told Axios that 'there's practically nothing left to target in Iran' and suggested the war would end soon, but renewed maritime disruptions forced a reassessment. The European session offers no scheduled economic data releases, leaving geopolitical headlines as the primary driver. Safe-haven flows are supporting USD/JPY and USD/CHF, while commodity-linked currencies such as CAD benefit from elevated crude prices. Risk-sensitive pairs like AUD/USD and NZD/USD face downward pressure. Traders should monitor Strait of Hormuz developments closely, as any escalation could trigger further crude spikes, amplifying risk-off sentiment. Near-term volatility is expected to remain elevated across major forex pairs until clearer ceasefire signals emerge.