Dollar Surges Amid Middle East Tensions and Market Volatility

The dollar rose as Middle East tensions escalated, sparking demand for safe-haven assets. Conflicts, including U.S. threats against Iran and regional infrastructure, dimmed hopes for de-escalation. Major currencies like the euro and yen struggled, driven by inflation and energy price shocks.

The dollar climbed on Monday amid rising tensions in the Middle East, prompting demand for safe-haven assets while global stocks plunged.

As expectations for de-escalation waned, U.S. President Donald Trump threatened Iran's electricity grid, with Tehran vowing to retaliate against regional infrastructures. The International Energy Agency noted the crisis is more severe than the combined oil shocks of the 1970s.

The dollar index gained 0.6% to reach 100.12. Rising oil prices spurred inflation, leading central banks to adopt hawkish stances, which weakened the euro and yen. Speculative oil trading is under scrutiny as the Bank of England anticipates interest rate hikes this year.