USD Surges as Trump Threatens Iran Strikes, Boosting Safe-Haven Demand

The US dollar is strengthening across the board during Tuesday's session as escalating geopolitical tensions between the United States and Iran drive safe-haven flows. President Trump has threatened fresh strikes against Iranian infrastructure, signaling that prolonged negotiations have stalled despite earlier optimism about being 'very close' to a deal. The reaffirmation of a naval blockade against Iran adds further pressure to an already volatile situation. Oil prices are spiking on supply disruption fears, which is indirectly supporting commodity-linked currencies like CAD while weighing on risk-sensitive pairs. The Japanese yen and Swiss franc are also seeing inflows as traditional safe havens, though the dollar remains the primary beneficiary. Key pairs to watch include USD/JPY, USD/CHF, and EUR/USD, where the dollar is gaining ground. Traders should exercise caution given the potential for rapid headline-driven reversals. Elevated volatility is expected heading into US trading hours, with risk sentiment deteriorating sharply. Geopolitical risk premiums are being priced into options markets across major pairs.