Dollar posts best day in two weeks as oil prices climb on Strait of Hormuz tensions

The US dollar just had its best trading day in two weeks, and the catalyst was exactly the kind of news markets were hoping they wouldn’t hear again: fresh disruptions in the Strait of Hormuz.

The Bloomberg Dollar Spot Index climbed 0.2% on August 6, its largest single-day gain since July 23. The move came as reports surfaced that Iran was attempting to restrict US and Israeli vessels from passing through the strait, one of the most critical chokepoints for global oil supply.

Oil fears reignite the safe-haven trade

Oil prices advanced on the restriction reports. US 10-year Treasury yields rose alongside the dollar, reflecting what analysts described as a growing inflation-risk premium tied to elevated energy costs.

The greenback’s strength was particularly visible against the Japanese yen, where the dollar gained 0.5% and pushed past its 200-day moving average to reach approximately 158.55.

A broader pattern since February

This wasn’t a one-day anomaly. The dollar has now gained 1.5% since US military actions against Iran began in late February 2026, operations that significantly disrupted global energy flows and rewired how markets think about geopolitical risk.

Market analysts framed the rally as a retreat from earlier expectations of geopolitical easing.

Recent US labor productivity data added another tailwind. Second-quarter figures showed an acceleration in productivity growth, providing fundamental support for the currency.

What traders are watching next

The immediate focus shifts to two upcoming events: US payroll data and scheduled remarks from Federal Reserve officials.

The correlation between oil prices and the dollar also has implications for emerging market economies, many of which price oil imports in dollars. A simultaneous rise in both creates a double squeeze on their current accounts, potentially triggering capital outflows and currency weakness in developing nations.

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