Geopolitical risks rise after US and Iran exchange strikes, stalling ceasefire talks and pressuring currency markets.
The US Dollar held near unchanged levels against major currencies early Monday, trading up 0.13% versus the EUR and JPY but oscillating around flat against the GBP. The limited moves came as investors assessed rising tensions in the Middle East following US strikes on Iranian military sites over the weekend, which Iran countered with retaliatory attacks and missile interceptions in Kuwait.
EURUSD saw volatile trading after breaking above its 200-day moving average at 1.16808 on Friday, struggling to sustain gains and retreating toward 1.1642. The pair’s pullback followed stalled ceasefire negotiations, with President Trump demanding stricter terms on Iran’s nuclear commitments and the reopening of the Strait of Hormuz, reversing earlier claims the deal was “largely finalized.”
Diplomatic efforts faced further setbacks as regional allies expressed frustration over the abrupt shift in US demands. Protests in Tehran and military posturing across the region added to market caution, though currency moves remained muted in early North American trading.