The US dollar dominated global currency markets today, Monday, 02 March 2026, as an escalating military conflict between the US, Israel, and Iran sent investors scrambling for “safe-haven” assets. The greenback’s rise was further fueled by a spike in crude oil prices following the confirmed death of Iran’s Supreme Leader, Ali Khamenei, and retaliatory strikes on shipping in the Strait of Hormuz.
The U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, climbed 0.74% to 98.37, hitting its highest level in over five weeks.
The geopolitical landscape shifted violently over the weekend after the Israeli Air Force confirmed the killing of 86-year-old Ali Khamenei.
Strait of Hormuz Disruption: The Iranian Revolutionary Guard claimed responsibility for striking three U.S. and British oil tankers on Monday.
Regional Blasts: Unconfirmed reports of explosions over major hubs like Dubai and Doha have heightened fears of a wider regional war.
Oil as a Weapon: With shipping lanes under fire, analysts warn that Japan and the Eurozone, major energy importers, face severe economic contraction, while the U.S. remains insulated as a net crude exporter.
The Winners & Losers
| Currency | Change vs. USD | Key Driver |
| US Dollar (DXY) | 🟢 +0.74% | Safe-haven demand & high oil prices. |
| Euro (EUR) | 🔴 -0.80% | Energy supply shock; hit $1.1721. |
| Japanese Yen (JPY) | 🔴 -0.61% | Reliance on crude imports; hit 157.005. |
| Swiss Franc (CHF) | 🔴 -0.43% | SNB signaled intervention to curb strength. |
| Australian Dollar (AUD) | 🔴 -0.60% | Risk aversion in commodity markets. |
| Chinese Yuan (CNH) | 🔴 -0.25% | PBOC weakened fixing to stem appreciation. |
Barclays analysts estimate that for every 10% increase in oil prices, the US dollar typically strengthens by 0.5% to 1%. With Brent crude facing sustained pressure, the Eurozone faces a “double whammy” of rising consumer prices and falling disposable incomes.
“A sustained rise in the oil price by $15 per barrel could raise the level of euro zone consumer prices by almost 0.5%.” – Holger Schmieding, Berenberg Chief Economist
Central Bank Reactions
Switzerland: The Swiss National Bank (SNB) announced it is ready to intervene in markets to prevent the Franc from becoming too strong, even as it hit an 11-year high against the Euro (0.9028).
Japan: BoJ Deputy Governor Ryozo Himino insisted that market volatility would not stop the bank from raising rates, though Prime Minister Sanae Takaichi’s spending plans are now under threat from energy costs.
China: As the world’s largest buyer of Iranian oil, China’s offshore yuan weakened as the PBOC moved to manage the currency’s value against a surging dollar.
