Dollar jumps as Middle East attacks renew, Hormuz closure looms
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The dollar surged on Monday as renewed attacks in the Middle East raised fears of a closure of the Strait of Hormuz. The greenback gained 0.8% against a basket of major currencies, with the euro falling to $1.08. Investors fled to safe havens even as oil prices climbed 3% on supply disruption risks.
The Dollar Surge
The US dollar index jumped 0.8% to 105.2 on Monday, its biggest one-day gain in three weeks. The euro fell 0.9% to $1.0802, while the British pound dropped 0.7% to $1.2650. The yen weakened 0.5% to 149.3 per dollar, as traders sought the greenback amid heightened geopolitical risk.
Middle East Attacks
Attacks on commercial vessels in the Persian Gulf resumed over the weekend, with two tankers reportedly struck near the Strait of Hormuz. Iran's Revolutionary Guards were blamed by US officials, though Tehran denied involvement. The strait handles about 20% of global oil shipments, and any closure could disrupt supply chains.
Market Impact
Brent crude futures rose 3.1% to $82.50 a barrel, the highest since April. Gold gained 0.6% to $2,350 an ounce, reflecting safe-haven demand. Stock markets in Asia and Europe fell, with the MSCI Asia-Pacific index down 1.2% and the Stoxx Europe 600 losing 0.8%.
Southern California Gas Prices
The price of a gallon of gas is quickly climbing past the $5 mark in Southern California, according to FOX 11 Los Angeles. This regional price surge reflects broader market pressures from Middle East tensions.
What's Next
The US State Department is set to hold an emergency briefing on Tuesday regarding the situation in the Gulf. It remains unclear whether the attacks will escalate into a full blockade, which could push oil prices above $100.
2 sources
Dollar jumps as Middle East attacks renew, Hormuz closure looms
