US Dollar Index Stabilizes Near 99.00 as Iranian Ceasefire Breaches Fuel Safe-Haven Demand

The US Dollar Index stabilizes as breaches in the US-Iran ceasefire and fresh threats to the Strait of Hormuz drive safe-haven demand. Read the April 9 analysis.

By: AXL Media

Published: Apr 9, 2026, 8:13 AM EDT

Source: Information for this report was sourced from FXStreet

Geopolitical Friction Halts Greenback Sell-off

The US Dollar Index, which tracks the USD against six major peers, found a floor on April 9, 2026, after three days of sharp losses. The currency's stabilization is directly linked to the rapid deterioration of the Islamabad Accords, a fragile two-week ceasefire agreement brokered just days prior. Initial market euphoria, which had driven risk assets higher and the Dollar lower, was extinguished by reports of fresh Israeli airstrikes in Lebanon and Iranian accusations of US bad faith. Market participants have largely pivoted back to the safety of the Dollar as the prospect of a sustained de-escalation in the Middle East appears increasingly remote.

Iranian Leadership Cites Framework Breaches

The pivot in market sentiment follows a sharply worded statement from Iranian Parliament Speaker Mohammad Bagher Ghalibaf, who claimed that the United States violated three critical clauses of Iran’s 10-point peace proposal before formal negotiations could even begin. Ghalibaf specifically cited continued military operations in Lebanon and unauthorized drone entries into Iranian airspace as "unreasonable" provocations that undermine the truce. This rhetoric has raised the risk of a full-scale resumption of hostilities, prompting traders to unwind short positions in the Greenback as they brace for a potential collapse of the Pakistan-mediated talks.

Strait of Hormuz Paralysis Continues

The most immediate economic impact of the fading ceasefire is the continued blockade of the Strait of Hormuz. Despite initial hopes that the two-week window would allow for the movement of over 200 stranded tankers, Iranian media reported a total halt in traffic on Thursday. The Islamic Revolutionary Guard Corps (IRGC) reportedly broadcast warnings via VHF radio, stating that no commercial vessels would be permitted to pass following the "ceasefire breaches" in Lebanon. This paralysis in the world’s most critical energy chokepoint has maintained a significant risk premium in global markets, providing a persistent tailwind for the US Dollar.