U.S. dollar strengthens to near 10-month highs amid Iran war uncertainty

The U.S. dollar firmed on Monday, as investors sought the relative safety of the currency amid an unclear trajectory for the Iran war.

By 08:31 ET (12:31 GMT), the U.S. dollar index, which track the greenback against a basket of currency peers, had risen by 0.2% to 100.34. The euro fell by 0.2% to $1.1483, while the British pound had declined by 0.2% to $1.3232.

Along with hovering near a 10-month high, the dollar was also on pace for its biggest monthly increase since July 2025.

Markets have been jittery due to the closure of the Strait of Hormuz, a vital waterway off of the southern coast of Iran which has been effectively closed to crude tanker shipping traffic for weeks. Oil prices have skyrocketed as a result, fueling worries over a surge in inflationary pressures in countries around the world.

Major importers in Asia, especially Japan and South Korea, have been highlighted as heavily exposed to the stoppage. Eurozone nations also lean on natural gas imports from the Persian Gulf, which have been impacted the fighting in the Middle East as well.

However, the dollar has been viewed as a relative bastion for investment during the crisis. Some investors have argued that the U.S.’s status as a net exporter may help to insulate the world’s largest economy.

"Barring any clear, conciliatory messages from the Iranian side, it is hard to see the dollar handing back this month’s gains anytime soon," analysts at ING including Chris Turner and Frantisek Taborsky said in a note.

Markets are keeping tabs on the near-constant developments out of the Middle East. U.S. President Donald Trump said on Monday that "great progress" had been made in negotiations to end the war in Iran, but reiterated a threat to attack Iranian power plants should the talks fall through.

Meanwhile, Federal Reserve Chair Jerome Powell is set to speak later in the day, with the central bank’s policy plans during the war in focus. A raft of U.S. economic data is scheduled to be released later this week, including fresh jobs figures for March.