Dollar Strengthens on Safe-Haven Demand Amid U.S.-Iran Tensions

Financial outlets describe a strong risk-on rebound, with the S&P 500 at record highs and Asian and regional markets rallying as traders latch onto any sign of US-Iran dialogue. This view holds that the Iran shock is being treated as temporary, with falling oil and a softer dollar showing that war fears are fading. Market participants expect that, unless talks collapse or fighting spreads, equities will keep benefiting from the combination of easing inflation worries and hopes of a negotiated outcome.

• •US and Asian stock indexes have staged back-to-back gains as headlines point to possible US-Iran peace talks.
• •The US dollar and oil prices have both slipped from their Iran-shock peaks as investors unwind safe-haven trades.
• •European traders are opening sessions cautiously but are broadly following Wall Street’s lead higher.
• •Market commentary links the PSX’s 4,300-point jump to expectations that a US-Iran deal would reduce regional risk.
• •Portfolio managers are rotating back into equities and away from cash and defensive assets as war odds are priced lower.