As traders anticipated a deadline set by the United States for Iran to open the Persian Gulf to shipping or risk assaults on its infrastructure, the dollar remained slightly below recent highs on Tuesday. Due to the Middle East conflict and the closing of the Gulf’s chokepoint at the Strait of Hormuz, energy prices have skyrocketed and investors have turned to dollars as the best safe haven, driving up the value of the dollar, particularly in Asia. The market is nervous and there aren’t many large dollar sellers ahead of U.S. President Donald Trump’s deadline of 8 p.m., but hope for an agreement or breakthrough has prevented more dollar purchases through Easter.

At 159.67 to the dollar, the yen was close to multi-decade lows and highs that prompted intervention in 2024. The euro and sterling both gained $1.1539 and $1.3235, respectively, slightly above multi-month lows set in late March. According to Brent Donnelly, president of Spectra Markets, “the market (is) long USD in case of further escalation, but stocks, gold, and CNH trade well and put a lid on dollar gains.” We wait till 8 p.m. to see what kinds of attacks Iran and the United States/Israel launch in the interim. It’s difficult to make any high-confidence forecasts here.” Iran might be “taken out” in a single night, according to Trump’s Monday statement, “and that night might be tomorrow night.” He vowed to demolish Iranian bridges and power stations, dismissing worries that doing so would be a war crime or offend Iranians.

Tehran has stated that a permanent end to the conflict is required and has opposed a ceasefire. Israel has taken responsibility for an attack on a petrochemical plant in southern Iran and the assassination of an Iranian intelligence official in the last day. Although trade remains hesitant, the Australian and New Zealand currencies, which fell as fighting and Iranian strikes on Middle Eastern oil infrastructure intensified late in March, have slightly increased to $0.6917 and $0.5714, respectively. Only after the crises in 2009 and the late 1990s did the South Korean won go below 1,500. China’s yuan stayed stable in offshore trade on Monday, but Indonesia’s rupiah hit a record low.

According to a report, “the dollar may ease modestly further in the near term due to optimism the U.S. will ‘end’ the Iran war.” Nonetheless, the United States, Israel, and Iran are the three parties involved in the conflict. Whether the Strait of Hormuz is open is important for the global economy and currencies. The Strait does not reopen until the United States withdraws from the conflict.