The dollar stood ​just shy of recent highs on ⁠Tuesday as traders counted down to a U.S.-imposed deadline for Iran to reopen the Strait of Hormuz to shipping or face ‌attacks on its infrastructure.

War in the Middle East and the closure of the chokepoint in the Persian Gulf have sent energy prices soaring and driven investors to ​dollars as the most effective safe haven, pushing the greenback higher, especially in Asia. Hope for some sort of deal or breakthrough held off further dollar buying over ​Easter, ​but markets were jittery and there were few sellers of dollars ahead of U.S. President Donald Trump's 8 p.m. Eastern Time (0000 GMT) deadline. The yen slipped to 159.80 to the dollar, not far from multi-decade troughs and levels that drew intervention in 2024.

"(The) ⁠market (is) long USD in case of further escalation, but stocks, gold and CNH trade well and put a lid on dollar gains," said Brent Donnelly, president at Spectra Markets.

"It's hard to make any high-confidence predictions here ... we wait for 8 p.m. and see what type of attacks Iran and U.S./Israel launch in the meantime."

Trump said on Monday Iran could be "taken out" in one night "and that night might be tomorrow ​night." He promised to destroy Iranian ‌power plants and ⁠bridges, brushing off concerns ⁠that such actions would be a war crime or alienate Iran's people.

The U.S. dollar index edged 0.05% up at 100.03. It hit 100.64 last week, its ​highest since May 2025.

"The Iranian leadership has demonstrated, surprisingly to many it seems, that it can ‌exercise full control over the Strait," said Thu Lan Nguyen, head of forex and commodity research ⁠at Commerzbank.

"And it is already becoming apparent that Iran intends to utilise this control for its long-term interests," she added.

Iran and Israel traded attacks on Tuesday as Tehran refused to reopen the Strait of Hormuz. Israel said it completed a wave of airstrikes targeting Iranian government infrastructure. Defences intercepted Iranian missiles in Israel and Saudi Arabia.

The euro was roughly unchanged at $1.1535, while traders priced in three European Central Bank rate hikes by year-end and ECB officials reiterated the central bank could act to tame inflation. Euro zone inflation expectations are at risk of rising more quickly than in the past and the ECB must be ready to raise interest rates swiftly if signs of persistent price pressures emerge, ECB's Dimitar Radev said. The Australian and New Zealand dollars, which tumbled as fighting and Iranian strikes on Mideast energy infrastructure intensified late ‌in March, were off lows but trading softer at $0.6912 and $0.57 respectively. The South Korean won remains ⁠on the weak side of 1,500, a level plumbed only in the wake of crises ​in 2009 and the late 1990s. Indonesia's rupiah dropped to a record low, while China's yuan hung on to March's steady tone.

"The dollar may ease modestly further in the near term because of optimism the U.S. will 'end' the Iran war," said Commonwealth Bank of Australia analysts in a note.

"However, there are ​three participants in ‌the war: the U.S., Israel and Iran. What matters for the world economy and currencies is whether the ⁠Strait of Hormuz is open. The U.S. leaving the conflict ​does not reopen the Strait."