Date: 10th April 2026.
US Dollar, Oil & Euro Analysis: Safe-Haven Demand Rises As Negotiations Fail.
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The US Dollar fell to its lowest level since the first days of the US-Iran war as inflation rose less than previously thought. The Dollar and financial markets more broadly now appear different after the US withdrew from negotiations. In addition to the negotiations failing, the US are advising that they will place a blockade on the straits this afternoon.
As a result, the US Dollar instantly rose 0.43% this morning, and Crude Oil again rose above $100.
The US Dollar Remains The Favoured Safe Haven Asset
Generally, lower inflation figures are known to have a negative impact on the currency. At first, the US Dollar did dip to a 6-week low, but without being able to maintain momentum. So, why did the US Dollar rebound?
The US inflation rate rose from 2.4% to 3.3% but fell below analysts’ previous expectations. Analysts were previously expecting the inflation rate to rise between 3.4-3.5%. However, traders remain focused on rising inflation and the fact that the outlook for interest rates remains unchanged. According to the Chicago Exchange, there is an 83% chance of no rate cuts in 2026, a 3% chance of a small hike and a 13% chance of a 0.25% cut.
For this reason, the Federal Reserve's monetary policy remains relatively restrictive, supporting the US Dollar. Also, the inflation rate reading lower is prompting a positive real bond yield. As a result, the Dollar remains an attractive hedge against inflation.
Regardless of the above, the US Dollar’s safe haven status is also playing a large role on Monday. The US military said it will begin a blockade on Monday targeting vessels entering or leaving Iranian ports after weekend talks in Islamabad failed to secure a deal, putting the fragile two-week ceasefire at risk. This development is creating a “risk-off” appetite on Monday.
Ships travelling to non-Iranian ports through the Strait of Hormuz will still be allowed to pass. However, Washington warned it would intercept any vessel that pays a toll to Iran, signalling renewed tensions.
Crude Oil Back Above $100 Per Barrel
HFM - Crude Oil 15-Minute Chart
For Crude Oil, the main price driver remains the developments in the Middle East, with negotiations failing and the attempt to block the Straits. The asset opened trading with a bullish price gap of 9.77% and rose to a high of $105.65. Analysts advise that forward guidance is not necessarily reliable, as the price is driven day by day by ongoing developments.
If the Iranians return to the negotiating table, the price is likely to fall back closer to $97. However, if the conflict escalates again, the price can rise to above $110.
Euro – Hungary Elections
HFM - EURUSD 30-Minute Chart
The latest developments coming out of the Euro are from its far eastern flank, Hungary. Hungary’s election saw 79% of its population vote for a new Prime Minister and party after 16 years of the same party rule. The new Prime Minister, Peter Magyar, is sceptical of Europe but is a supporter of the EU. Generally, Europe view him as an easier partner than Viktor Orban, who sided more with Russia and the US.
The move may seem positive for the Euro; however, the outlook continues to remain the same. Currently, due to the dollar's strength, the Euro is likely to remain shaky. Currently, the Euro Index is trading 0.36% lower due to the decline against the Dollar. Of the nine main currencies, the Euro is currently the fifth-best-performing.
Furthermore, March inflation data from Germany showed that the consumer price index rose by 0.2% to 1.1% month-on-month, while annual inflation increased from 1.9% to 2.7%. The harmonised index also accelerated, rising from 0.4% to 1.2% monthly and from 2.0% to 2.8% annually, mainly due to higher energy prices linked to the Middle East conflict. Even so, the European Central Bank expects inflation expectations to remain contained, reducing the need for further monetary tightening.
Key Takeaways:
* The US Dollar rebounded as traders focused on steady rate expectations and a positive real bond yield.
* Markets show renewed safe-haven demand after the US withdrew from negotiations.
* Rising geopolitical tensions pushed crude oil back above $100, with failed talks and a possible blockade driving fresh supply fears.
* Lower-than-expected US inflation weakened the Dollar only briefly, as restrictive Fed policy continues to support the currency.
* The Euro faces mixed pressure, with stronger German inflation offset by Dollar strength and limited expectations for further ECB tightening.
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Please note that times displayed based on local time zone and are from time of writing this report.
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Michalis Efthymiou
HFMarkets
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