The dollar jumps after renewed tensions in the Middle East and the closure of the Strait of Hormuz

The US dollar rose sharply against most major world currencies on Monday, as investors turned to assets deemed safer after renewed hostilities in the Middle East and the closure of the Strait of Hormuz.

According to Reuters, this new surge in geopolitical tensions has revived concerns about rising energy prices and accelerating global inflation. Markets are now anticipating a greater risk of monetary tightening by major central banks to contain inflationary pressures.

The closure of the Strait of Hormuz, a strategic waterway through which a significant portion of the world's oil passes, has raised fears of disruptions to energy supplies. This situation has strengthened the appeal of the dollar, traditionally considered a safe haven currency during times of uncertainty.

The US dollar also strengthened against the Japanese yen, benefiting from renewed risk aversion in financial markets. Investors are closely monitoring developments in the Middle East, which could continue to influence currencies, bond markets, and commodity prices.

Analysts believe that as long as geopolitical tensions persist and risks to oil supplies remain high, the dollar could continue to benefit from its safe-haven status, while expectations of inflation and rising interest rates are expected to remain at the heart of market concerns.