USD Strengthens as Iran Rejects Ceasefire, Middle East Tensions Escalate

Safe-haven flows are intensifying as Iran rejected a ceasefire proposal from the US, relayed through Iraqi intermediaries, citing unresolved control over the Strait of Hormuz. Iran's refusal to accept what it termed a 'temporary deal' raises the prospect of prolonged geopolitical instability heading into the weekend, a period traders often approach with caution given the risk of gap openings. The rejection has fueled a spike in crude oil prices, with direct implications for commodity-linked currencies such as CAD and NOK, while traditional safe havens including the US dollar, Japanese yen, and Swiss franc are seeing increased demand. Gold, despite its typical safe-haven role, has slipped below $4,040 as rising yields offset geopolitical bid. Traders should monitor USD/JPY and USD/CHF for continued safe-haven positioning, while AUD/USD and NZD/USD face downside pressure from risk-off sentiment. Weekend holding risk is elevated, and reduced liquidity could amplify moves on any further escalation or diplomatic breakthrough.