USD Strengthens, Gold Dips as Iran Rejects Ceasefire Amid Strikes

Geopolitical tensions escalated sharply during the European session as reports confirmed multiple strikes on Iran's Kharg Island, a critical oil export hub, along with damage to the Kashan railway bridge. A senior Iranian source confirmed that Tehran has rejected any temporary ceasefire with the United States, intensifying risk-off sentiment across forex markets. The US dollar found safe-haven demand as traders reassessed geopolitical risk premiums, while gold maintained a bearish bias as President Trump's stated "final" deadline approaches, suggesting potential further escalation. Oil-sensitive currencies such as the Canadian dollar saw mixed reactions, with crude prices spiking on supply disruption fears from Kharg Island, which handles a significant portion of Iran's oil exports. JPY and CHF also attracted safe-haven flows. Near-term, traders should monitor developments around the ceasefire negotiations and any retaliatory actions, as further escalation could drive USD/JPY toward key support levels and push EUR/USD lower. Volatility is expected to remain elevated heading into the next session, with risk sentiment likely dictating price action across major pairs.