USD Pressured as Iran Tensions Spark Worst Stock Selloff Since Wartime

The US dollar faced significant headwinds as equity markets posted their worst single-day decline since wartime levels, driven by escalating geopolitical tensions between the US and Iran. President Trump extended a 10-day pause on actions against Iran through Monday, April 6, citing 'very substantial talks' underway. However, a senior Iranian official contradicted this optimism, stating that no realistic plan for talks exists at this stage, creating a stark disconnect in diplomatic messaging. This uncertainty fueled risk-off sentiment across global markets, with safe-haven currencies such as the Japanese yen and Swiss franc likely benefiting from capital flows out of equities. The conflicting narratives between US and Iranian officials suggest continued volatility in the near term. Traders should monitor USD/JPY for potential downside breaks as risk aversion persists, while USD/CHF may also face selling pressure. Oil-linked currencies such as CAD could see heightened volatility given the Iran situation's implications for crude supply. Key support and resistance levels across major pairs remain fluid amid the geopolitical uncertainty.