Global Markets React as Dollar Surges, Swiss Franc Rallies After U.S.-Israel Strike on Iran

Global currency markets swung sharply on Monday as investors rushed toward safe-haven assets following U.S. and Israeli airstrikes on Iran that reportedly killed Supreme Leader Ayatollah Ali Khamenei. The escalating Middle East conflict triggered a surge in the U.S. dollar and Swiss franc, while the euro and other risk-sensitive currencies fell amid fears of prolonged geopolitical instability.

The Swiss franc climbed as much as 0.4% to 0.7661 per dollar and strengthened 0.6% against the euro to 0.9030, its strongest level since 2015, before trimming gains. Analysts described the move as a classic “risk-off” reaction, as uncertainty surrounding oil prices and the potential closure of the Strait of Hormuz weighed heavily on market sentiment.

Oil prices jumped roughly 9% in early trading due to concerns over disruptions to global energy supplies and sea-borne trade routes. Iran reportedly retaliated by striking U.S. and British oil tankers, with explosions also reported over Dubai and Doha. The developments intensified fears of a broader regional conflict that could last several weeks. U.S. President Donald Trump suggested the military campaign may continue for up to a month.

The U.S. dollar strengthened broadly, while the euro fell 0.3% to $1.1784 and the British pound declined 0.3% to $1.3451, pressured by Europe’s reliance on energy imports and low natural gas reserves. The Japanese yen initially gained but later weakened 0.2% to 156.235 per dollar as traders assessed the impact of higher oil prices on Japan’s import costs and the Bank of Japan’s interest rate outlook.

Risk-sensitive currencies such as the Australian and New Zealand dollars also retreated, while China’s offshore yuan slipped 0.1% amid concerns over energy imports. As geopolitical tensions rise, currency markets remain focused on oil price volatility, central bank policy expectations, and the potential for extended instability in the Middle East.