US dollar set to surge as rising tensions in the Middle East drive safe-haven demand

Dollar Set for Recovery Amid Rising Middle East Tensions

On Monday, the US dollar appeared ready to strengthen as intensifying threats in the Middle East heightened investor caution and increased the appeal of safe-haven currencies. Last week, the dollar experienced its first weekly loss since the conflict in Iran began, with surging oil prices fueling inflation concerns and prompting central banks to adopt a more aggressive stance. Meanwhile, the Australian dollar weakened in early trading as stock markets faced a likely downturn.

Over the weekend, optimism for a peaceful resolution in the Gulf region faded. US President Donald Trump warned of potential strikes on Iran’s power infrastructure, while Tehran pledged to retaliate.