US dollar rises as Hormuz blockade drives oil up, fueling risk-off sentiment

US currency strengthens after Trump orders blockade of Strait of Hormuz following deadlock in US-Iran peace talks

The US dollar strengthened on Monday as US President Donald Trump ordered a blockade of the Strait of Hormuz after weekend peace talks between Washington and Tehran ended without a breakthrough, sending oil prices higher and pushing investors toward safer assets. The US Dollar index rose as much as 0.5% during the session, putting it on track for its second daily gain this month, before paring some of the advance to trade about 0.16% higher later in the day, at around 98.6. The Japanese yen led declines among major Group of 10 currencies against the greenback, as markets reacted to renewed tensions around one of the world’s most critical energy chokepoints. Analysts said the dollar’s gains continued relatively limited despite the escalation. Investor attention remained fixed on shipments of oil and gas through the Strait of Hormuz, where the absence of an agreement between the US and Iran risks worsening an already severe global energy shock. Oil prices hovered near $100 per barrel, underscoring mounting concerns over supply disruptions and broader fallout for the global economy. Following joint diplomatic efforts with Türkiye, Saudi Arabia, and Egypt, Pakistan on April 8 secured a 14-day ceasefire between Washington and Tehran after weeks of fighting triggered by US-Israel actions on Feb. 28. US Vice President JD Vance and his delegation met with an Iranian team led by parliament speaker Mohammad Bagher Qalibaf, who headed the 16-hour marathon negotiations known as the Islamabad Talks -- considered the most significant engagement since the US and Iran severed diplomatic ties in 1979. However, the talks held over the weekend in the Pakistani capital, ended without a breakthrough. The US Central Command’s blockade of all maritime traffic entering and exiting Iranian ports took effect at 1400GMT, keeping concerns about supply disruptions in focus and limiting the decline in crude prices.