Markets Watch Closely as U.S.-Iran Tensions Re-Escalate

Markets remain focused on whether the U.S.-Iran ceasefire is starting to break down after a major re-escalation near the Strait of Hormuz. Iran reportedly fired warning shots at a U.S. tanker, followed by U.S. strikes near Bandar Abbas and an Iranian strike on a U.S. airbase in Kuwait. While details remain unclear, this is the biggest escalation since the ceasefire began and shows tensions are still far from resolved.

The renewed conflict is pressuring risk assets, with U.S. stock indices and gold falling, while oil has rebounded around 3% on supply concerns linked to the Strait of Hormuz.

Technically, the U.S. Dollar Index remains range-bound between 98.80 and 99.50. A break above 99.50 could push the dollar toward 100, while a break lower may open the door toward 98.50 near the 200-day moving average. End-of-month rebalancing could also create short-term dollar selling pressure.

Dollar Index Daily Chart