Dollar Holds Steady Amid Iran War Uncertainty

The U.S. dollar maintained its value on Wednesday, March 11, 2026, as currency traders in Singapore adopted a cautious stance, awaiting clearer developments in the ongoing U.S.-Israeli conflict with Iran. This market behavior reflects mixed signals regarding a potential resolution to the conflict, which has kept investor sentiment fragile.

The dollar had previously surged due to the war's impact on oil prices but has since relinquished some gains on hopes for a swift end to hostilities. However, analysts remain skeptical, with Kristina Clifton, senior currency strategist at Commonwealth Bank of Australia, projecting the war to continue for months. The conflict escalated with intense airstrikes by the U.S. and Israel on Iran on Tuesday, prompting Iran's Islamic Revolutionary Guard Corps to threaten blocking oil shipments from the Gulf if attacks persist. This situation has led to traders largely remaining on the sidelines, seeking greater clarity to price risk more efficiently.

Concurrently, the euro traded at $1.16205, and sterling was up 0.12% at $1.34305. The dollar index, measuring the U.S. unit against six major currencies, stood at 98.876. The risk-sensitive Australian dollar hovered near a four-year high at $0.713, driven by expectations of an interest rate hike from the Reserve Bank of Australia due to rising oil prices and inflation. Fed funds futures traders are now pricing in 39.7 basis points of cuts by year-end, indicating reduced expectations for multiple rate cuts. Investor attention is now on U.S. inflation data for February, expected to show a 0.2% rise in core consumer prices and a 0.3% rise in headline prices. The International Energy Agency has reportedly proposed the largest-ever release of oil reserves to counter soaring crude prices.