Dollar Climbs to Five-Week High as US-Iran Tensions Rattle Global Markets
- US dollar surges due to geopolitical tensions between the US and Iran impacting global currency markets
- Euro hits lowest level since 2015 as investors seek safe havens amid rising uncertainty
- Gold and oil prices rally as fears of escalating Middle East conflict drive market volatility
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
A new exchange rate has emerged in global currency markets after the US dollar surged sharply on Monday, March 2, 2026, driven by rising tensions between the United States and Iran.
Forex traders reported a strong flight-to-safety move, with investors pulling funds from riskier assets and piling into traditional safe havens.
Source: Getty Images
The greenback gained ground against major trading peers, buoyed by geopolitical uncertainty and expectations that US interest rates will remain elevated for longer.
The US Dollar Index (DXY), which measures the currency against a basket of major peers, climbed to a five-week high of 98.566 in early European trading.
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The rally reflects renewed demand for dollar-denominated assets amid escalating risks in the Middle East.
Euro, commodity currencies under pressure
The euro weakened significantly, falling to 0.9032 Swiss francs, its lowest level since the Swiss National Bank scrapped its currency peg in 2015, according to London Stock Exchange Group data.
The move underscores the scale of investor repositioning as capital flows toward perceived safe assets.
The dollar also advanced against commodity-linked currencies. It rose to a one-month high of 0.5928 against the New Zealand dollar and a four-day high of 1.3687 against the Canadian dollar, according to a report by MarketForces Africa.
Earlier lows of 0.5997 and 1.3641, respectively, were quickly reversed as demand for the greenback intensified.
Analysts say the combination of geopolitical tension and rising oil prices has strengthened the dollar’s appeal.
As a net oil exporter, the US stands to benefit from higher crude prices, which improve its trade balance and support the currency.
Gold and oil rally on conflict fears
Gold topped the list of safe-haven assets as investors sought protection from market volatility. The precious metal continued to attract inflows amid fears that tensions in the Middle East could escalate further.
Oil prices also climbed in response to the conflict. Higher energy costs have sparked fresh debate over whether the Federal Reserve will hold off on cutting interest rates.
If energy-driven inflation persists, policymakers may be reluctant to ease monetary policy.
Higher interest rates tend to support the dollar by boosting yields on US Treasury notes and other dollar-denominated investments. With rate cuts effectively off the table for now, the greenback’s momentum appears intact.
Key levels to watch
Market analysts note that if the dollar extends its rally, it could encounter resistance at 1.16 against the euro and 1.31 against the British pound.
Other key levels include 159.00 against the Japanese yen, 0.78 against the Swiss franc, 0.69 against the Australian dollar, 0.57 against the New Zealand dollar, and 1.38 against the Canadian dollar.
Despite the latest surge, the dollar has faced pressure over the past year from investors rotating into alternative safe havens like gold and shifting capital toward emerging markets.
However, America’s vast domestic energy resources could shield its economy from prolonged oil disruptions tied to Middle East instability.
While US consumers may still feel the impact of higher petrol prices, the country retains the ability to increase oil production if elevated prices justify additional output.
In related developments, the Central Bank of the Republic of Türkiye sold more than $5 billion in foreign exchange on Monday in a bid to stabilise its currency, highlighting the broader ripple effects of global market tensions.
Meanwhile, data from the Central Bank of Nigeria (CBN) shows that Nigeria's currency, the naira, continued its losing streak in the foreign exchange market on Monday, March 2, 2026.
At the end of trading, the local currency slumped to N376 per dollar from N1,368 the previous day.
Source: Getty Images
Dollar slumps to one-week low
Legit.ng earlier reported that 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.
The greenback came under renewed selling pressure ahead of high-stakes discussions in Geneva involving the United States and Iran.
Source: Legit.ng
