USD Rallies on Hormuz Strait Takeover as Oil Prices Spike

President Trump's declaration that the United States is 'taking over the Strait of Hormuz' has triggered a sharp risk-off move across global forex markets, with crude oil prices spiking on fears of a full resumption of the US-Iran military conflict. Trump's assertion that 'Iran has nothing' suggests a willingness to escalate, though the absence of a TACO (Trade And Commerce Order) at the start of the week leaves the scope of further action uncertain. The dollar is strengthening against most G10 currencies as safe-haven demand surges, while commodity-linked currencies like the Australian and Canadian dollars face mixed signals from higher oil prices versus deteriorating risk sentiment. USD/JPY remains a key pair to watch as carry trade positioning could amplify volatility if risk aversion deepens further. WTI crude futures are bid sharply, supporting inflation expectations and complicating the near-term monetary policy outlook globally. Traders should prepare for elevated volatility and wider spreads, particularly during illiquid weekend gaps if further military developments emerge over the coming sessions.