SINGAPORE, April 13 – The American dollar climbed to its strongest position in a week during Monday’s early Asian trading sessions as diplomatic negotiations between Washington and Tehran collapsed and the US military prepared to implement a naval blockade of Iranian shipping lanes.
Currency markets showed the dollar index, which tracks the greenback’s performance against six major world currencies, rising as much as 0.5% to reach 99.187 – marking its strongest showing since April 7.
European and Pacific currencies fell across the board, with the euro declining 0.5% to $1.1667 and the British pound dropping 0.6% to $1.3383. The Australian dollar weakened 0.8% to $0.7014 while New Zealand’s currency fell 0.7% to $0.5798.
President Donald Trump announced Sunday that American naval forces would begin blocking the Strait of Hormuz after extended negotiations with Iranian officials failed to produce an agreement ending the current conflict, putting at risk a fragile two-week ceasefire. US Central Command confirmed that American forces would start enforcing the blockade of all ship traffic moving in and out of Iranian ports beginning at 10 a.m. ET Monday.
Currency analysts at Westpac noted the market reaction in their research briefing, stating: “Early and thin FX trading this morning is showcasing a risk-off mood, with the broad-based rally in the USD in response.”
