US Strikes Iran Missile Sites Near Strait of Hormuz as Ceasefire Lapses

US Military Targets Iranian Missile Sites in Expanded Operations

The United States conducted overnight airstrikes against Iranian missile installations near the Strait of Hormuz, according to a senior US official. The operation, involving both land and sea-based assets, represents a broader military footprint than previous rounds of strikes earlier this week. The action comes after the collapse of a fragile ceasefire that had temporarily halted hostilities following weekend attacks on commercial shipping in the critical waterway.

President Trump had previously declared the interim agreement ending the conflict void and hinted at expanded operations, including potential strikes on Kharg Island, Iran's primary oil export hub. Iranian officials have warned that further US action could prompt a full closure of the Strait of Hormuz and double the scope of their retaliatory measures.

Market Reaction: Safe-Haven Demand Rises as Geopolitical Tensions Escalate

Global risk assets came under pressure as the renewed military activity heightened concerns over supply chain disruptions and energy price volatility. Crude oil futures extended gains, with Brent crude climbing above $85 per barrel, while equity markets across Europe and Asia retreated. The US dollar strengthened broadly, with the Dollar Index (DXY) rising 0.4% to 105.30, as investors sought refuge in safe-haven assets.

Government bond yields declined, with the 10-year US Treasury yield slipping to 4.15%, reflecting a flight to quality. Gold prices edged higher, trading around $1,950 an ounce, as traditional safe havens attracted demand.

Implications for Forex Traders

The breakdown in diplomatic de-escalation efforts reinforces the dollar's safe-haven appeal, potentially capping upside for commodity-linked currencies such as the Australian dollar and Canadian dollar. EURUSD and GBPUSD may face downward pressure amid risk aversion, while USDJPY could test recent highs if haven demand persists.

Traders will monitor Iran's response closely, with any move to restrict shipping through the Strait likely to amplify volatility in oil-linked currencies and energy-sensitive equity sectors. The Federal Reserve's policy trajectory remains unchanged for now, though sustained geopolitical uncertainty could influence future rate-cut expectations.

Technical Market Context

The DXY's bullish momentum has pushed spot prices above the 105.00 handle, with immediate resistance seen at 105.50. A confirmed break above this level could open the door to 106.00. Conversely, a re-escalation of diplomatic talks may see profit-taking pressure emerge around current levels.

Oil markets remain in focus, with technical indicators suggesting further upside potential if supply concerns intensify. However, any signs of de-escalation could trigger a sharp reversal in energy prices.

Risk Disclaimer: Trading foreign exchange and commodities involves substantial risk of loss. This analysis is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results.