Finance
Dollar Steady as US Blocks Iranian Ships, Talks Continue
Published by Global Banking & Finance Review®
Posted on April 14, 2026
3 min readLast updated: April 14, 2026
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The dollar held steady amid U.S. naval blockade of Iranian ships in the Strait of Hormuz, while ongoing U.S.–Iran negotiations offer potential relief; oil prices ticked lower and muted expectations of a Bank of Japan rate hike weighed on the yen.
Dollar steady as US blocks Iranian ships, diplomacy presses on
Market Reactions and Diplomatic Developments
By Satoshi Sugiyama
Dollar Performance Amid Geopolitical Tensions
TOKYO, April 14 (Reuters) - The dollar was steady on Tuesday but set for a seventh straight daily drop, as markets weighed supply risks from a U.S. blockade of Iranian shipping in the Strait of Hormuz against hopes for a diplomatic breakthrough between Washington and Tehran.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.05% to 98.39, hovering near its lowest since March 2, the first trading day after the U.S.-Israeli war with Iran erupted.
The dollar's seven-day losing streak would be its first since December last year.
Movements in Major Currencies
The euro rose 0.02% to $1.1759, while sterling tacked on 0.01% to $1.3505.. The yen edged up 0.16% to 159.19 per dollar.
US Blockade and Diplomatic Signals
U.S. President Donald Trump said the U.S. military began a blockade nL6N40V09Sof ships leaving Iran's ports on Monday, but added nL6N40V09S Iran had been in touch and wanted to make a deal with Washington despite a tense weekend meeting in Islamabad.
Reuters reported negotiations between Washington and Tehran were still alive nL4N40W0L7 while U.S. Vice President JD Vance said in an interview nL1N40W146 the U.S. expects Iran will make progress on opening the Strait of Hormuz.
Market Relief and Safe-Haven Demand
The series of comments "has brought some relief to the markets, as it has renewed the possibility of a diplomatic resolution," said Keiichi Iguchi, senior strategist at Resona Holdings.
The greenback has benefited from a safe-haven bid since the conflict began, and the U.S., a net energy exporter, is also relatively better positioned to handle oil disruptions than other nations.
Oil Prices and Energy Markets
U.S. crude futures nFWN40W0IT were down more than $2 in early Asian trade at $96.99 a barrel.
Impact on Asian Currencies and Central Bank Policy
Japanese Yen Vulnerability
The Japanese yen, though, remains vulnerable to selling pressure on concerns that the nation's trade balance will deteriorate as the risk of crude oil price staying elevated increases, Iguchi said.
Bank of Japan Rate Hike Prospects
Moreover, chances of an interest rate hike this month by the Bank of Japan, once seen as a strong possibility, have receded as fading hopes for an end to the Iran war keep markets volatile and muddy the economic outlook, sources told Reuters reuters://realtime/verb=NewsStory/ric=nL4N40T1P9.
Interest rate swaps on Monday indicated a 40% chance of a BOJ rate hike this month, down from 57% from Friday, according to Tokyo Tanshi data.
Risks to Dollar-Yen Exchange Rate
"We're very much of the view that if the BOJ decides to stand pat at the end of April, then the risks are that the dollar-yen exchange rate is going to punch up through 160 (yen against the dollar)," said Ray Attrill, head of forex strategy at National Australia Bank, in a podcast.
Markets see 160-yen-per-dollar as a red line that raises the odds of intervention.
BOJ Governor Kazuo Ueda on Monday nL1N40W05N emphasised vigilance against fallout from the Iran war, shifting focus from the central bank's usual pledge to steadily raise interest rates.
Other Currencies and Cryptocurrencies
Australian and New Zealand Dollar Movements
The Australian dollar weakened 0.23% versus the greenback to $0.7078. New Zealand's kiwi weakened 0.15% versus the greenback to $0.5857.
Cryptocurrency Performance
In cryptocurrencies, bitcoin gained 1.66% to $74,409.95. Ethereum rose 5.17% to $2,369.96.
(Reporting by Satoshi Sugiyama; Editing by Lincoln Feast and Shri Navaratnam.)
Key Takeaways
- •U.S. imposed a naval blockade on Iranian ports and shipping on April 13, stirring supply risk concerns amid volatile oil markets (apnews.com)
- •Despite the failed Islamabad talks (April 11–12), mediators are pushing to revive U.S.–Iran diplomacy before the ceasefire expires April 21 (axios.com)
- •Markets see diminishing odds of BOJ raising rates this month, reducing yen weakness; April hike probability stands around two‑thirds but has receded (lines.com)
References
Frequently Asked Questions about Dollar steady as US blocks Iranian ships, talks continue
1Why is the dollar steady amid US-Iran tensions?
The dollar remains steady as investors weigh US-Iran tensions in the Strait of Hormuz against ongoing diplomatic talks, which help balance market sentiment.
2How did the US blockade of Iranian ships affect oil prices?
US crude futures dropped over $2, trading at $96.99 a barrel, due to the market’s uncertainty over supply risks from the blockade.
3Will the Bank of Japan raise interest rates this month?
Chances of a Bank of Japan rate hike have decreased to 40%, as market volatility and the uncertain economic outlook caused by Iran tensions impact decisions.
4How are other major currencies performing against the dollar?
The euro, yen, and pound have experienced small fluctuations, with minor strengthening or weakening against the dollar as global markets react to news.
