Dollar strengthens as US-Iran tensions buoy oil prices

The US dollar index edged higher to 101.15 on Monday, bolstered by rising crude oil prices amid escalating US-Iran tensions. Oil prices climbed more than 1% during the session, reflecting investor concerns about potential supply disruptions in a volatile region.

The dollar's strength comes as traders reassess their portfolios in response to heightened geopolitical risks. When tensions between major oil producers and consumers rise, investors typically seek the relative safety of the US currency, which benefits from increased global demand.

The greenback is tracking towards a healthy September performance, with the dollar index up 1.7% for the month so far. The combination of technical momentum and geopolitical risk appetite has supported the currency's upward trajectory.

Oil price movements remain closely tied to Middle East developments, with crude gaining ground as supply concerns weigh on market sentiment. For regional economies and currency traders in Southeast Asia, movements in both crude and the dollar carry significant implications for inflation, trade competitiveness and capital flows.