Dollar strengthens as peace talks falter, US blockade of Iran's ports to begin

The dollar strengthened to the highest level in a week in a broad rally against most of its peers in early Asian trade on Monday as peace talks between the U.S. ‌and ⁠Iran broke ⁠down nL1N40U07M and the U.S. Navy prepared a blockade of Iranian ports.

The U.S. dollar index, which measures the greenback's strength against a basket of six currencies, was up as much as 0.5% at 99.187, its highest level since April ⁠7.

The euro ‌was down 0.5% at $1.1667 as the British pound fell 0.6% to $1.3383, while the ⁠Australian dollar was 0.8% lower at $0.7014 and the New Zealand dollar was off 0.7% at $0.5798.


U.S. President Donald Trump said on Sunday the U.S. Navy would start blockading the Strait of Hormuz after marathon talks with Iran failed to reach a deal to end ‌the war, jeopardizing a fragile two-week ceasefire. The U.S. Central Command said U.S. forces would begin implementing the ⁠blockade of all maritime traffic entering and exiting Iranian ports from 10 a.m. ET (1400 GMT) on Monday.

"Early and thin FX trading this morning is showcasing a risk-off mood, with the broad-based rally in the USD in response," analysts from Westpac wrote in a research note.