Market Analysis Summary: Dollar Holds Below 100 on Iran Tensions as Oil, Gold Rally Amid Risk Aversion

Author: Martin Lam

Date: March 26, 2026

Overview

The US Dollar Index (DXY) remained just below the 100 mark, trading around 99.50, as safe-haven flows were driven by escalating tensions with Iran. This geopolitical instability has led to a surge in oil prices and a rally in gold, while equities faced downward pressure.

Market Snapshot

• Dollar Index (DXY): Up 0.2% from the previous day, testing resistance at 100 earlier in the week.
• Brent Crude: Increased by 2.1% to $105.20 per barrel.
• WTI Crude: Rose 2.3% to $101.50, influenced by fears of supply disruptions in the Strait of Hormuz.
• Gold: Climbed 1.2% to $4,525 per ounce, as investors sought safe-haven assets.

Geopolitical Trigger

Iran has denied US claims regarding de-escalation talks and has threatened new strikes on American targets, extending a conflict that has now lasted four weeks. President Trump has reiterated demands for Iran's military capitulation, while Israeli operations have targeted hardliners in Tehran, including potential successors to Supreme Leader Ali Khamenei. The involvement of Gulf states has raised concerns about broader regional instability.

Equity Market Pressure

Wall Street futures indicated a downward trend, with S&P 500 e-minis down 0.8% and Nasdaq 100 futures off 1.1%. European markets also reflected risk-off sentiment, with the Euro STOXX 50 falling 0.9%. Asian markets closed mixed, with Japan’s Nikkei down 1.2%, although some energy stocks provided offsetting gains.

Safe-Haven Shifts

The dollar gained against major currencies, rising 0.4% against the euro to $1.0820 and 0.3% against the yen to 150.20. US 10-year Treasury yields fell by 3 basis points to 4.25%, indicating increased bond buying. The Swiss franc also saw a slight increase of 0.2%, serving as a secondary refuge. Bitcoin remained stable near $72,000, caught between risk aversion and inflation hedging.

Policy Responses

The Federal Reserve is under pressure from rising energy costs, with analysts warning of persistent inflation above 3%. European Central Bank officials have indicated a willingness to pause rate hikes if economic growth continues to weaken. OPEC+ producers are discussing potential output increases but are prioritizing stability in light of threats in the Strait of Hormuz.

About the Author

Martin Lam is the Chief Analyst for Asia Pacific at ATFX, with over 20 years of experience in global forex and investment markets. He holds a degree in Finance and Economics from Deakin University and has held senior roles at leading FX brokerage firms.