The US Dollar (USD) surged to multi-month highs, with the US Dollar Index (DXY) exceeding the 99.00 level and approaching the psychological 100.00 barrier, supported by escalating geopolitical tensions in the Middle East, particularly involving the US, Israel, and Iran [1][4]. The Greenback has advanced for three consecutive days, benefiting from a flight-to-safety environment and rising US Treasury yields [1]. The DXY traded near 99.70, a level not seen since November 2025 [4]. The USD was the strongest against the Australian Dollar, gaining 0.95% on the day, and also posted notable gains against the Euro (0.41%) and Swiss Franc (0.56%) [4].
Geopolitical risks intensified after Iran's new Supreme Leader, Mojtaba Khamenei, declared that the Strait of Hormuz should remain closed to pressure adversaries, and attacks on oil tankers and military bases would continue [2][4][5]. Several tankers were attacked, and reports indicated Iran laid mines in the passage, raising concerns about global energy supply disruptions [2][4][5]. US President Donald Trump commented that higher oil prices benefit the US as the world's largest oil producer, downplaying concerns about Brent surpassing $100 per barrel and WTI trading above $90 [2]. US Energy Secretary Chris Wright acknowledged significant short-term supply disruptions and stated that US Navy escorts for oil tankers could begin by the end of the month [5]. The International Energy Agency (IEA) announced a release of 400 million barrels from strategic reserves but warned that the Middle East war is causing the largest supply disruption in oil market history, lowering its 2026 global oil demand growth forecast to 640,000 barrels per day from 850,000 bpd [5].
WTI crude oil prices rallied sharply, rising more than 7.5% on Thursday to trade around $94.31, extending a three-day winning streak. Earlier in the week, WTI briefly surged to $113 before reversing to $83.36 [5]. Technical indicators show strong bullish momentum, with the Relative Strength Index (RSI) in overbought territory near 81 and the Average Directional Index (ADX) climbing toward the high-40s, indicating a strong trend [5]. Immediate resistance is at $94.61, with further upside targets at $99.02, $105.29, and $113.28. Support levels are at $90.21, $84.76, and $75.95 [5].
The EUR/USD pair traded near 1.1520, close to the 2026 low of 1.1507, as risk aversion fueled USD demand. Technical analysis indicates a bearish bias, with the pair below key moving averages and immediate support at 1.1507. A break below this level could open the path to 1.1470 [2][4]. The Swiss Franc (CHF) also weakened, with USD/CHF reaching multi-day highs around 0.7850. Despite the safe-haven context, the CHF struggled against the USD, though further geopolitical deterioration could renew demand for the Franc. The possibility of Swiss National Bank (SNB) intervention remains a factor for investors [3].
On the US economic front, Initial Jobless Claims for the week ending March 7 fell to 213K, slightly below the 215K forecast, providing additional support to the USD [1][4]. Market participants are awaiting the US Personal Consumption Expenditures (PCE) Price Index release, with the latest available data showing core PCE inflation at 3% in December [2].
According to [1], the DXY could target the November 2025 top at 100.39 and the May 2025 high at 101.97 if the 100.00 barrier is cleared. Conversely, a loss of the 200-day SMA at 98.34 could trigger a deeper decline. Technicals for WTI suggest further upside is possible, but overbought conditions may lead to corrections [5].
CONCLUSION
Escalating US-Iran tensions and disruptions in the Strait of Hormuz have driven a sharp rally in the US Dollar and WTI crude oil prices, with the DXY nearing 100 and WTI up over 7.5% on the day. The market is in a pronounced risk-off mode, favoring the USD and pressuring other major currencies, while oil markets remain volatile amid historic supply disruptions. Near-term focus will be on further geopolitical developments and upcoming US inflation data, both of which could sustain elevated volatility and strong USD demand.