The U.S. Dollar continued its ascent Tuesday, bolstered by its status as a safe-haven currency on the fourth day of escalating conflict between Israel and Iran, while European currencies suffered amid growing fears of inflation driven by soaring hydrocarbon prices.
“The repercussions of the U.S. Military operation against Iran continue to dominate market activity,” said Elias Haddad of Brown Brothers Harriman.
The dollar typically gains traction during periods of geopolitical uncertainty. As of 7:45 PM GMT, the Dollar Index, which measures the greenback against a basket of other currencies, rose 0.77% to 99.14 points, reaching its highest level since late January.
Traders are also concerned about the “inflationary impact” of the conflict on the U.S. Economy, noted Patrick O’Hare of Briefing.com. This raises the possibility that the U.S. Federal Reserve may pause its planned interest rate cuts, or even raise rates, a scenario that would further strengthen the American currency.
“European currencies (…) are those that have depreciated the most against the dollar” since the conflict began, “reflecting the concerns of market participants regarding the impact of a new energy shock on European economies,” said Lee Hardman, an analyst at MUFG.
Paralysis of maritime traffic in the Strait of Hormuz, a vital chokepoint for approximately 20% of global oil and gas supplies, and attacks on energy installations in the region are fueling fears of a surge in hydrocarbon prices similar to that following the start of the war in Ukraine.
The price of European gas has exploded by around 75% since Friday, while the two global benchmark crude oil prices have increased by approximately 15%.
“A prolonged conflict that leads to a further significant disruption of production (…) increases the risk of stagflation” in the Eurozone, meaning persistent inflation combined with sluggish growth, Haddad explained.
The euro lost more than 1% against the dollar earlier in the day, falling to $1.1530, before recovering slightly to $1.1620 by 7:45 PM GMT. The British pound also declined, falling 0.35% to $1.3425 per pound.
“Investors are selling indiscriminately, including safe-haven assets like gold,” to “rush into the dollar and energy,” said Kathleen Brooks of XTB, as reported by AFP.
Gold lost 3.80% to $2,120.18 per ounce (31.1 g).
Currency Exchange Rates (Tuesday vs. Monday)
———————————-
7:45 PM GMT 10:00 PM GMT
EUR/USD 1.1620 1.1688
EUR/JPY 183.16 183.97
EUR/CHF 0.9078 0.9109
EUR/GBP 0.8699 0.8718
USD/JPY 157.64 157.39
USD/CHF 0.7815 0.7792
GBP/USD 1.3425 1.3407
AFP
According to xe.com, as of 9:20 PM GMT on March 3, 2026, 1 USD equals 1,310,230 Iranian Rials.
