10-Day Strike Pause Eases Tension but Oil and DXY Face Mixed Signals

Trump's decision to pause strikes on Iran’s energy plants for 10 days reduces immediate tension. This is slightly negative for oil in the short term because the risk of a sudden supply shock has been delayed.

However, the main risk for oil is still the Strait of Hormuz. As long as shipping problems continue there, oil prices are likely to stay supported. If the Strait of Hormuz returns to normal, oil prices should slowly stabilise. If the situation worsens again after the 10-day pause, oil could rise quickly. Oil may fall slightly in the short term but should stay supported while Hormuz risk continues

For the US Dollar Index (DXY), the impact is mixed. The pause reduces safe-haven demand slightly, which may limit upside. If the conflict moves toward ending, DXY could give back some of its recent gains. But higher oil prices keep inflation risks elevated and reduce the chances of rate cuts soon, which continues to support the dollar.