The U.S. dollar rises for a second session as geopolitical risks and high oil prices support demand for the safe-haven currency.
The U.S. dollar climbed for a second consecutive session on Tuesday, driven by persistent Middle East tensions and elevated oil prices. Investors sought refuge in the greenback amid uncertainty over Iran’s actions and the potential collapse of a fragile ceasefire, which U.S. President Donald Trump dismissed as inadequate earlier this week.
The dollar surged in March following Iran’s closure of the Strait of Hormuz, which triggered a spike in oil prices and weighed on oil-dependent currencies like the yen and euro. While the greenback retreated after a ceasefire began on April 7, it remains near pre-conflict levels as risks linger. Analysts note that crude oil prices, up 2% on Tuesday, continue to underpin the dollar’s strength.
Market focus now shifts to this week’s Trump-Xi summit in Beijing, where Iran is expected to be a key topic. Economists suggest a breakthrough on the conflict is unlikely before the meeting, keeping geopolitical risks elevated. High oil prices are seen as more damaging to global economies outside the U.S., further supporting the dollar’s appeal.