USD Gains as US Navy Enters Hormuz Strait Amid Iran Nuclear Talks

The US dollar is seeing safe-haven flows as geopolitical tensions escalate in the Strait of Hormuz, with several US Navy ships entering the critical waterway. President Trump stated the vessels are clearing mines, directly challenging Iran's claim that it cannot reopen the strait due to underwater mines. This development coincides with the opening of US-Iran nuclear talks in Islamabad, adding a layer of complexity to an already volatile situation. Crude oil prices are reacting sharply to the developments, with WTI fluctuating as markets assess whether the military presence signals escalation or a pathway to reopening one of the world's most critical oil chokepoints. USD/JPY and USD/CHF are in focus as traders weigh risk-on versus risk-off positioning. The Iranian rial and currencies of oil-importing nations such as INR and JPY face potential pressure if tensions escalate further. Commodity-linked currencies including CAD and NOK are responding to the oil price volatility. Traders should monitor headline risk closely, as any military confrontation could trigger significant safe-haven demand for JPY and CHF while boosting USD broadly.