USD Faces Weekend Risk as US-Iran Tensions Cloud Forex Outlook

The US dollar is navigating heightened geopolitical uncertainty heading into the weekend as US-Iran developments dominate market attention. Mixed and contradictory headlines over the past 24 hours have created a choppy trading environment, with reports initially suggesting Iran's supreme leader issued a directive to retain near-weapons-grade uranium stockpiles domestically, only for subsequent reports to deny the claim while noting Iran's overall position remains unchanged. This back-and-forth rhetoric is injecting volatility into safe-haven flows, supporting traditional havens like JPY, CHF, and gold while weighing on risk-sensitive currencies such as AUD and NZD. USD/JPY and USD/CHF remain sensitive to escalation risks, with traders likely to reduce exposure ahead of the weekend to avoid gap risk. Oil prices are also reacting to Middle East tensions, indirectly impacting commodity-linked currencies like CAD. With no clear resolution in sight, markets may see thin liquidity and widened spreads into Friday's close. Traders should exercise caution with position sizing and monitor weekend developments closely for potential Monday open gaps.