Risk-off mood lifts US Dollar as Iran ceasefire falters

The US Dollar is trading above 0.7900 against the Swiss Franc, lifting from a low of 0.7870 as investors react to the unraveling of a fragile ceasefire between Israel and Iran. Iran closed the Strait of Hormuz after accusing Israel of violating the peace agreement with a deadly strike on Lebanon that killed more than 180 people — a move Israel and the US say was not bound by the ceasefire’s terms. The escalation has triggered a moderate risk-off sentiment in markets, boosting demand for safe-haven assets. The US Dollar, benefiting from both its traditional safe-haven status and resilient inflation dynamics, is outperforming the Swiss Franc despite the latter’s own避险 appeal. Switzerland released no major data this week aside from a steady 3% unemployment rate in March, leaving the Franc without fresh support. Meanwhile, US inflation remains elevated: the Core PCE Price Index, the Federal Reserve’s preferred gauge, held at 3.1% year-on-year, unchanged from expectations and well above the 2% target. Recent Fed minutes revealed some policymakers are open to tightening monetary policy if inflation persists. With March’s Consumer Price Index data due Friday — expected to reflect war-related price pressures — the Dollar’s dual role as a hedge against both volatility and inflation is gaining traction. Even as the US and Iran confirm plans to resume peace talks in Pakistan on Saturday, markets remain wary. The risk-off mood isn’t fading. It’s just priced in — for now.