The US Dollar strengthened across global markets following a US airstrike on Iranian nuclear facilities over the weekend, as investors sought safe-haven assets amid heightened geopolitical tensions. Despite muted FX movements due to prior signaling of the strike, the Dollar gained up to 1% against major currencies, outperforming equities and oil, which saw limited volatility. Iran labeled the strike an "act of war" and may retaliate, raising concerns over potential disruptions in oil shipping through the Strait of Hormuz. Oil prices initially spiked but later stabilized near pre-weekend levels. The New Zealand and Australian Dollars dropped sharply due to risk aversion and ties to China, while the Japanese Yen surprisingly weakened, pressured by Japan's reliance on energy imports amid oil supply fears. Key US economic data, including PMIs and GDP, are expected to influence markets throughout the week.
