USD Weakens as Fresh Iran Explosions Fuel Safe-Haven Flows to JPY, CHF

The US dollar is under renewed pressure as fresh explosions are reported in Iran for a third consecutive day, escalating geopolitical tensions in the Middle East. Iran has retaliated against US bases in the region and is threatening further action, driving significant safe-haven demand toward the Japanese yen and Swiss franc. USD/JPY has slipped as traders rotate into traditional haven currencies, while USD/CHF also faces downward pressure. Oil prices have surged on supply disruption fears, indirectly supporting commodity-linked currencies like CAD. The escalation creates a highly uncertain environment for forex markets, with risk-off sentiment dominating. Traders should watch for any diplomatic developments or further military escalation, which could trigger sharp intraday moves across major pairs. Key support for the dollar index lies at recent lows, and a failure to hold could accelerate losses. Near-term volatility is expected to remain elevated, with safe-haven pairs likely to see continued demand until a clear de-escalation path emerges.