USD Strengthens as Trump Escalates Pressure on Iran, Boosting Safe-Haven Flows

The U.S. dollar is seeing renewed safe-haven demand as geopolitical tensions between Washington and Tehran escalate. A senior U.S. official confirmed that the Trump administration is prioritizing holding Iran accountable for alleged violations of a memorandum of understanding and recent American casualties, signaling that any diplomatic ceasefire remains a distant prospect. The official emphasized that both military and economic pressure campaigns will persist indefinitely until the President determines otherwise. This hardline stance has injected fresh uncertainty into global markets, pushing traders toward traditional safe-haven assets including the dollar, Japanese yen, and Swiss franc. Crude oil prices have also firmed on supply disruption concerns, which could weigh on commodity-linked currencies such as AUD/USD and USD/CAD. Pairs like USD/JPY and USD/CHF may see competing safe-haven flows, potentially resulting in range-bound trading. Traders should monitor developments closely, as any military escalation in the Middle East could trigger sharp volatility across forex markets. Key resistance for the DXY sits near recent highs, with risk sentiment likely to remain fragile in the near term.