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 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 percent at 99.187, its highest level since April.
The euro was down 0.5 percent at US$1.1667 (HK$9.1) as the British pound fell 0.6 percent to US$1.3383, while the Australian dollar was 0.8 percent lower at US$0.7014 and the New Zealand dollar was off 0.7 percent at US$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.
Reuters
