International News 03 March 2026
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Dollar Surges, Swiss Franc Strengthens as Middle East Conflict Shakes Currency Markets
The U.S. dollar rallied sharply on Monday (March 2, 2026), while the euro weakened and the Swiss franc strengthened after the United States and Israel launched airstrikes on Iran, killing Supreme Leader Ali Khamenei. Escalating tensions fueled fears of a prolonged Middle East conflict, driving investors toward safe-haven assets. The Swiss franc rose as much as 0.4% to 0.7661 per dollar and 0.6% against the euro to 0.9030—its strongest level since 2015—before trimming gains. Meanwhile, oil prices surged around 9% in early Asian trade amid concerns over shipping disruptions through the Strait of Hormuz, a critical artery for global energy supplies. The euro fell 0.3% to $1.1784 and the British pound slipped 0.3% to $1.3451, reflecting Europe’s vulnerability as it enters gas restocking season with low reserves. The Japanese yen briefly strengthened but later weakened 0.2% to 156.235 per dollar as markets weighed higher energy import costs and reduced prospects of near-term rate hikes by the Bank of Japan, according to analysts at Morgan Stanley MUFG. Risk-sensitive currencies also came under pressure, with the Australian dollar falling as much as 1.2% before trimming losses, while the offshore yuan edged lower after the People’s Bank of China set a weaker daily fixing. With Donald Trump suggesting the military campaign could last up to four weeks and Israel signaling further targets remain, currency markets are expected to stay volatile, particularly if energy supply routes face prolonged disruption.
Oil Prices Surge as Middle East Conflict Threatens Hormuz Supply Route
Global oil prices are expected to remain elevated in the coming days as escalating tensions in the Middle East heighten concerns over supply disruptions, particularly through the Strait of Hormuz, a critical chokepoint that carries more than 20% of global oil shipments. Prices jumped over 8% in the first trading session after joint strikes by the United States and Israel on Iran reportedly killed Iran’s Supreme Leader Ali Khamenei. Tehran retaliated with attacks targeting Israel and several other countries, intensifying fears of prolonged instability. Reports of damaged tankers and the temporary suspension of shipments by major oil firms and traders have further tightened market sentiment. Analysts project continued volatility. Citigroup expects Brent crude to trade between US$80–US$90 per barrel over the next week, potentially easing toward US$70 if de-escalation occurs. Goldman Sachs estimates that current prices include an US$18 per barrel geopolitical risk premium, which could shrink to US$4 if only half of Hormuz flows are disrupted for a month. However, Wood Mackenzie warns prices could surpass US$100 per barrel if tanker traffic fails to normalize, citing a “double shock” that would curb both existing exports and OPEC spare capacity. Although OPEC+ has agreed to raise output by 206,000 barrels per day starting April, analysts at Société Générale believe any price spike may be temporary, provided global supply continuity is ultimately maintained.
Singapore Warns of Energy Price Risks Amid Middle East Escalation
Lee Hsien Loong warned that escalating tensions in the Middle East could drive up global energy prices and impact countries far from the conflict, including Singapore. Speaking at a Lunar New Year celebration, he highlighted the joint strikes by Israel and the United States on Iran and Tehran’s retaliation, noting that the outcome of the conflict remains unpredictable. Lee added that rising geopolitical tensions, coupled with shifting U.S. trade policies under Donald Trump—including a 10% baseline tariff that was briefly raised to 15%—have intensified global uncertainty, dampening trade and investment sentiment. As a small, open economy heavily reliant on global trade and capital flows, Singapore faces direct exposure to geopolitical shocks and protectionist trends. While the economy expanded by 5% in 2025, Lee cautioned against complacency amid persistent global volatility. He emphasized that the government, under Prime Minister Lawrence Wong, is rolling out cost-of-living support measures—including cash payouts, CDC vouchers, and enhanced utility rebates—while investing heavily in long-term resilience, such as workforce upskilling in artificial intelligence. Lee stressed that although Singapore cannot control global events, it can strengthen domestic preparedness to remain competitive amid mounting global headwinds.