Finance
Dollar Kept Aloft as Another Trump Deadline Looms
Published by Global Banking & Finance Review®
Posted on April 7, 2026
3 min readLast updated: April 7, 2026
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Published by Global Banking & Finance Review®
Posted on April 7, 2026
3 min readLast updated: April 7, 2026
Add as preferred source on GoogleThe dollar remains strong ahead of President Trump’s April 7, 8 p.m. ET deadline for Iran to reopen the Strait of Hormuz amid heightened Middle East tensions, soaring energy prices, and safe-haven demand, limiting further dollar gains.
SINGAPORE, April 7 (Reuters) - The dollar stood just shy of recent highs on Tuesday as traders counted down to a U.S.-imposed deadline for Iran to open the Persian Gulf to shipping or face attacks on its infrastructure.
War in the Middle East and the closure of the Gulf's chokepoint at the Strait of Hormuz has sent energy prices soaring and driven investors to dollars as the most effective safe haven, pushing the greenback higher, especially in Asia.
Hope for some sort of deal or breakthrough has held off further dollar buying through Easter, but markets are jittery and there are few big sellers of dollars ahead of U.S. President Donald Trumps's 8 p.m. Eastern Time (midnight GMT) deadline.
The yen traded at 159.67 to the dollar, not far from multi-decade troughs and levels that drew intervention in 2024. The euro bought $1.1539 and sterling $1.3235, a little bit above multi-month lows made late in March.
"(The) market (is) long USD in case of further escalation, but stocks, gold and CNH trade well and put a lid on dollar gains," said Brent Donnelly, president at Spectra Markets.
"It's hard to make any high-confidence predictions here ... we wait for 8 p.m. and see what type of attacks Iran and U.S./Israel launch in the meantime."
Trump said on Monday Iran could be "taken out" in one night "and that night might be tomorrow night." He vowed to destroy Iranian power plants and bridges, brushing off concerns that such actions would be a war crime or alienate Iran's people.
Tehran has rejected a ceasefire and said a permanent end to the war was necessary. In the past day Israel has claimed responsibility for the death of an Iranian intelligence chief and an attack on a petrochemical plant in Iran's south.
The Australian and New Zealand dollars, which tumbled as fighting and Iranian strikes on Mideast energy infrastructure intensified late in March, have nudged higher to $0.6917 and $0.5714 respectively, though trade is tentative.
The South Korean won remains on the weak side of 1,500, a level plumbed only in the wake of crises in 2009 and the late 1990s. Indonesia's rupiah reached a record low on Monday, while China's yuan was steady in offshore trade.
"The dollar may ease modestly further in the near term because of optimism the U.S. will 'end' the Iran war," said Commonwealth Bank of Australia analysts in a note.
"However, there are three participants in the war: the U.S., Israel and Iran. What matters for the world economy and currencies is whether the Strait of Hormuz is open. The U.S. leaving the conflict does not re-open the Strait."
(Reporting by Tom Westbrook; Editing by Stephen Coates)
The US dollar is viewed as a safe haven asset, attracting investors during heightened geopolitical risk, such as fears over the Strait of Hormuz closure.
War risks and potential closure of the Strait of Hormuz have led to soaring energy prices, as the region is a key chokepoint for global oil shipments.
The impending deadline has created market jitters, leading to increased demand for US dollars while other major currencies have seen limited movements.
The yen, euro, sterling, Australian dollar, New Zealand dollar, South Korean won, and Indonesian rupiah have weakened as the dollar strengthened.
Closure of the Strait would disrupt global trade and energy supplies, potentially causing further volatility in currency and commodity markets.
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