The US Dollar stayed firm against major currencies on Friday, with the USD Index (DXY) holding in the upper 98.00s. The DXY was set for a 0.4% weekly gain as tensions between the US and Iran increased and risk appetite remained low.<\/p>\n
The US President extended the ceasefire this week, while Iran kept the Strait of Hormuz closed for an eighth week and the US military continued a blockade of Iran\u2019s ports. Peace talks remained stalled, with no date set for a new round that had been expected this week.<\/p>\n
On Thursday, the US President stated on social media that Iran had limited time to reach a peace deal. Israel said it would escalate action against Iran if the US approved.<\/p>\n
Iran\u2019s Deputy President, Esmaeil Saqab Esfahani, warned of retaliation against the US. He also said Iran could attack Gulf oil facilities if Iranian energy sites were targeted.<\/p>\n
US Defence Secretary Pete Hegseth and Joint Chiefs chair Dan Caine scheduled a press conference for 08:00 AM ET (12:00 GMT) on Operation Epic Fury. US data also supported the Dollar, with April\u2019s preliminary S&P Global PMI showing solid activity and jobless claims rising moderately while pointing to a steady labour market.<\/p>\n
With the “Operation Epic Fury” announcement pending, we should anticipate a significant spike in market volatility. This is a time to consider buying options, such as straddles on the S&P 500, to profit from a large price move in either direction. We saw the VIX jump over 35 during the initial conflict in Ukraine, and a similar reaction is highly probable now.<\/p>\n
The continued closure of the Strait of Hormuz, a chokepoint for nearly a fifth of global oil supply, makes long positions on crude oil futures look extremely attractive. Call options on Brent crude offer a leveraged way to play a potential supply shock from any direct military action. For perspective, when geopolitical tensions flared in the Gulf in 2025, we saw Brent crude surge by 15% in under a week.<\/p>\n
The US dollar’s strength is supported by both a flight to safety and solid domestic data, with the latest March 2026 jobs report showing a robust gain of 215,000 jobs. We should look at buying DXY futures or selling EUR\/USD futures, as capital continues to flow into US assets. Historically, the DXY rallied from the low 90s to over 103 in similar risk-off environments driven by conflict.<\/p>\n
Given the high probability of escalating conflict, we should be positioned for a downturn in equity markets. Buying put options on the Nasdaq 100 provides a hedge against a sell-off in growth-sensitive tech stocks. At the same time, call options on gold ETFs should perform well, as gold’s traditional safe-haven appeal is magnified by war and the inflationary risk from higher oil prices.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Dollar stays firm, DXY near 98, as US-Iran tensions rise, risk appetite slips; data supports.<\/p>\n","protected":false},"author":87,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71],"tags":[],"class_list":["post-45464","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t