Dollar Steady as Geopolitical Tensions Keep Markets on Edge

The U.S. dollar held firm in Monday trading, supported by safe-haven demand as escalating tensions in the Middle East weighed on investor sentiment. Market participants remained cautious amid growing concerns over potential disruptions to global energy supplies.

The Japanese yen, meanwhile, hovered near the critical 160 per dollar level, a threshold that has historically raised the risk of official intervention. Japanese authorities have previously signaled readiness to act against excessive currency volatility, keeping traders alert to any sudden moves.

Oil prices rose on fears that instability surrounding the Strait of Hormuz — a vital artery for global oil shipments — could disrupt supply flows. The uncertainty has pushed investors toward traditionally safer assets, including the dollar.

Markets are also closely watching developments in U.S. policy, as strong rhetoric and potential military escalation continue to inject volatility into currency and commodity markets. Analysts expect that geopolitical risks, combined with monetary policy expectations, will remain key drivers of market direction in the near term.

Sources: Reuters, Bloomberg, CNBC, Financial Times