US Dollar Strengthens as War Concerns Resurface

Jakarta – The United States dollar (USD) has strengthened sharply after weakening in the previous two sessions. This rally occurred following a statement from US President Donald Trump that reignited market concerns over conflict with Iran.

In his speech, Trump affirmed plans to escalate attacks on Iran over the next two to three weeks. The remarks simultaneously dampened investor hopes for an imminent end to the conflict.

This situation immediately prompted market participants to seek safe-haven assets, including the USD. The currency of Uncle Sam even appreciated against other safe-haven currencies such as the Swiss franc and Japanese yen.

Citing CNBC International on Friday, 3 April 2026, the USD rose 0.6% to 0.799 against the Swiss franc. Meanwhile, against the Japanese yen, the dollar gained 0.5% to 159.57, approaching the psychological level of 160 that often raises concerns about intervention by Japanese authorities.

Iran responded to the statement with strong rhetoric. The Iranian military warned the US and Israel that they would face attacks that are “more devastating, more widespread, and more destructive”.

Marc Chandler, Head of Market Strategy at Bannockburn Global Forex, assessed that the shift in market sentiment stemmed from fading hopes for peace.

“In the past few days, there was optimism that the war would end soon, but President Trump’s speech yesterday shattered those hopes,” he said.

He added that the market is currently highly sensitive to conflict prospects.

“If you think the war will end soon, you buy risky assets. If not, you sell risk,” he explained.

Pressure was also evident on other major currencies. The euro fell 0.45% to US$1.1536. Meanwhile, sterling weakened 0.63% to US$1.3222, erasing some of its prior gains.

The US dollar index, which measures the greenback’s strength against a basket of major currencies, rose 0.46% to 100.02.

Analysts at Scotiabank, led by Shaun Osborne, stated that the tone of Trump’s speech exacerbated market concerns. They noted that the market reaction was swift and nearly fully reversed the strengthening of advanced economy (G10) currencies throughout the week.

“The tone of President Trump’s speech appears to have heightened market concerns, as he spoke of escalating attacks in the next two to three weeks and threatened potential strikes on Iranian power facilities if no agreement is reached,” they wrote.