Dollar Slumps to One-Week Low as Trade Tensions, Iran Fears Shake Global Markets
- The United States dollar has fallen to a week low amid geopolitical tensions and trade disputes across the globe
- The US Supreme Court ruling on tariffs also sparked market uncertainty and global trade reassessment
- Investor caution expectedly grew as currency markets began bracing for volatility from ongoing negotiations and legal shifts
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The United States dollar retreated to its lowest level in a week as rising geopolitical risks and renewed trade tensions weighed heavily on investor sentiment.
Currency traders moved cautiously, trimming dollar positions amid concerns that diplomatic talks between Washington and Tehran could unravel, potentially escalating tensions in the Middle East.
Source: Getty Images
The greenback came under renewed selling pressure ahead of high-stakes discussions in Geneva involving the United States and Iran.
Market anxiety deepened after President Donald Trump warned of possible military action if negotiations fail to produce meaningful progress.
At the same time, fresh trade friction between the United States and China added another layer of uncertainty to global markets.
Supreme Court ruling adds to market uncertainty
Investor caution intensified following a landmark decision by the Supreme Court of the United States that invalidated existing tariffs.
The ruling has forced businesses, policymakers and global trading partners to reassess the future of U.S. trade policy.
The development comes as the White House pushes forward with a 15 percent tariff on global trade, a move that has prompted several economies to weigh retaliatory measures.
Analysts say the court’s decision could encourage trading partners to seek revisions to existing agreements in a bid to secure better terms.
The dollar was also sold during Trump’s State of the Union address, reflecting investor unease over the evolving trade and geopolitical landscape. Still, against most major G10 currencies, the currency remains largely within established trading ranges.
Pound, Euro, Franc gain ground
In the currency markets, sterling strengthened, pushing the dollar to a one-week low of 1.3575 against the British pound, compared to the previous close of 1.3559.
The euro and Swiss franc also firmed. The dollar slipped to three-day lows of 1.1829 against the euro and 0.7711 against the franc, down from prior closing levels.
Analysts suggest that if the downward momentum persists, the dollar could find technical support near 1.21 against the euro and around 0.76 versus the franc.
Safe-haven flows have also supported gold and oil prices, both of which edged higher as traders hedged against escalating geopolitical risks.
Yen stands firm, Canadian dollar holds range
Against the Japanese yen, the dollar eased to 155.76 from 156.36, with traders eyeing a potential downside target near 152.00 should selling pressure intensify.
Meanwhile, the dollar’s performance against the Canadian dollar was more contained. After touching a monthly high near CAD1.3725 in the previous session, the pair traded within a narrow CAD1.3675 to CAD1.3705 range.
Forex analysts noted that approximately $475 million in CAD1.37 options were set to expire, a factor that may help anchor price action in the short term. The next technical level on the upside is seen near CAD1.3760.
Source: Getty Images
Markets brace for next catalyst
With geopolitical flashpoints, legal shifts in trade policy and tariff threats converging at once, investors are bracing for heightened volatility in the days ahead.
Currency markets are likely to remain sensitive to headlines from Geneva, Washington and Beijing as traders search for clarity in an increasingly uncertain global landscape.
Dollar hoarders count losses as naira strengthens
Legit.ng earlier reported that Nigeria’s currency rally was leaving dollar hoarders scrambling.
The naira extended its appreciation across both official and parallel foreign exchange markets this week, forcing many who bought dollars at elevated rates to offload at losses.
After months of volatility that encouraged speculative demand, the recent strengthening of the local currency reversed its fortune in the informal market.
Proofreading by Kola Muhammed, copy editor at Legit.ng.
Source: Legit.ng
