US crackdown pushes US dollar higher, Bitcoin\'s decline narrows

U.S. strike on Iran\'s nuclear facilities brings geopolitical risks back to the heart of financial markets

In just a few hours, oil prices soared, investors turned to the safest assets, and cryptocurrencies once again exposed sensitivity to international tensions. The resumption of conflict raises a core question: In the face of a major military crisis, can Bitcoin compete with traditional safe-haven assets, or will it remain the same as other risky assets?

Summary

A new round of U.S. strikes on Iran has reignited tensions in the Middle East and triggered a new round of risk aversion in financial markets.
Oil, the dollar and bonds immediately benefited from the crisis, while investors feared a return to inflationary pressures.
Major central banks have adopted different strategies in this new environment, exacerbating the volatility of major global currencies.
Despite the geopolitical tensions, Bitcoin and cryptocurrencies have kept losses to a limited extent, and the market is still betting that the situation will ease before the critical deadline of mid-August.

The military conflict in the Strait of Hormuz escalates, and oil and the US dollar soar

On Wednesday (July 8), global markets were hit by a series of major events, and traditional safe-haven assets immediately benefited:

Military hostilities resumed: The United States launched a series of targeted strikes on Iran on Tuesday, revoking its previous temporary permit that allowed Tehran to export oil on international markets;
Major maritime incident: Before the direct military intervention, three oil tankers were attacked in the Strait of Hormuz, a key waterway for global energy supply;
The U.S. Dollar Index (DXY) broke out: In response to the escalation of the situation, the U.S. Dollar Index jumped to a weekly high of 101.18, hitting 101.210 intraday, the highest level since July 2;
Market experts issued a warning: Westpac Bank analysts emphasized the seriousness of the situation in their research report, pointing out that \"concerns about the stability of the peace agreement resurfaced after Iran attacked ships passing through the Strait of Hormuz.\"

The renewed escalation of tensions has put direct pressure on commodities, continuing the rally that began the previous trading day. Brent crude oil futures rose 2.6% to US$76.12 a barrel at the opening of Asian trading on Wednesday, reflecting concerns about long-term disruptions to logistics channels. The sharp rise has revived fears of a global inflation crisis, prompting investors to abandon risky assets and seek shelter from U.S. dollar and bond yields.

Westpac\'s report clearly warned of this phenomenon, adding that \"concerns about the inflation outlook have become a focus, and global bond yields have climbed accordingly.\" As a result, the combination of a strong dollar and high yields has tightened available liquidity and created an unfavorable environment for the stock market.

Global monetary landscape reshuffle

In addition to the surge in the dollar, the current crisis has also revealed the different paths the world\'s major central banks have taken in the face of a return to inflation. The U.S. dollar rose 0.1% against the yen, reaching 0.2% at one point to 162.28 yen and an intraday high of 162.46 yen, rising for the fourth consecutive trading day. In contrast, the Reserve Bank of New Zealand unexpectedly raised its key interest rate by 25 basis points to 2.5%, the first rate increase in more than three years, while warning that \"another easing of monetary policy is likely to be needed.\"

This tough stance contrasts sharply with the cautious attitude of Japan\'s central bank, which Japan\'s central bank board member Tokirō Asada said he \"does not support further interest rate hikes until he sees signs of demand-driven inflation.\" At the same time, the euro fell back to $1.1405, the pound weakened to $1.3351 (once touching $1.3353), and the Australian dollar stabilized at around $0.6926 (peaking at $0.6938).

Cryptocurrency market resilience and outlook before the mid-August deadline

In this highly uncertain macroeconomic context, the cryptocurrency market showed only a slight correction, with Bitcoin falling 0.2% to US$63,518.35 and Ethereum falling 0.5% to US$1,774.45. This relative stability relative to the US dollar stems from investors \'careful interpretation of the geopolitical situation, who believe that these conflicts are more strategic layouts than the beginning of full-scale conflicts.

Analysts at DBS elaborated on this market psychology in their report, explaining that \"for now, the market still adheres to a scenario: Tehran and Washington are still engaged in a high-risk game to gain leverage during a temporary truce, and Tuesday\'s events will not escalate into full-scale war again.\" Therefore, the resilience of prices suggests that the cryptocurrency ecosystem is now absorbing these external shocks with an increasingly mature attitude and rejecting systemic panic selling.

Future prospects will depend on countries \'ability to keep communication channels open before critical late summer deadlines. However, DBS warned that the current calm may be short-lived and estimated that \"the incident reminds people that the real risks remain the expiration of the interim ceasefire agreement in mid-August and the red line issue of tolls in the Strait of Hormuz.\"

If the strait blockade tightens further in mid-August, inflation caused by energy costs will force central banks to maintain high interest rates, damaging overall liquidity. This critical period will be a real test for Bitcoin: either it faces selling pressure associated with the continued strength of the U.S. dollar, or it serves as an independent alternative reserve asset that attracts investors looking for a safe haven from fiat currency instability affected by oil shocks.