Dollar Edges Higher as Geopolitical Tensions Rise

U.S. currency gains amid uncertainty over Iran nuclear talks and risk-off sentiment among investors

Feb. 19, 2026 at 3:47pm

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The U.S. dollar edged higher against major currencies on Tuesday as geopolitical tensions from the ongoing U.S.-Iran nuclear talks unleashed more market uncertainty and a risk-off mood among investors. Investors were also positioning ahead of the expected release of minutes from the Fed's last meeting and key economic data later in the week.

Why it matters

The dollar tends to strengthen during times of geopolitical uncertainty as investors seek safe-haven assets like U.S. Treasuries. This dynamic reflects broader market concerns about potential conflicts and their impact on the global economy.

The details

Iran and the U.S. reached an understanding on the main "guiding principles" in a second round of indirect talks over their nuclear dispute on Tuesday, although a deal is not imminent, Iranian Foreign Minister Abbas Araqchi said. The U.S. has sent a battle force to the Middle East to press Tehran to make concessions in the decades-long dispute. President Donald Trump has said "regime change" in Tehran may be the best thing that can happen.

  • The dollar was last up 0.08% at 0.701 franc against the Swiss franc on Tuesday.
  • The euro was slightly up 0.03% against the dollar at $1.18533 on Tuesday.
  • The dollar index rose 0.05% to 97.15 on Tuesday, on track for the second straight session of gains.

The players

Abbas Araqchi

Iranian Foreign Minister who said Iran and the U.S. reached an understanding on the main "guiding principles" in a second round of indirect talks over their nuclear dispute, although a deal is not imminent.

Donald Trump

U.S. President who has said "regime change" in Iran may be the best thing that can happen.

Eugene Epstein

Head of trading and structured products at Moneycorp in New Jersey who said the dollar is strengthening due to the potential conflict with Iran, as investors buy U.S. Treasuries and sell equities in a "risk-off" move.

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What they’re saying

“Treasury yields are coming off quite a bit and you also have the dollar strengthening, which is kind of funny because it's back to the old mentality of risk-off. There's a potential conflict with Iran so you have the traditional buy U.S. dollar, buy U.S. Treasuries and sell equities, and that's seemingly what's going on today.”

— Eugene Epstein, Head of trading and structured products

The takeaway

The strengthening of the U.S. dollar amid geopolitical tensions with Iran reflects broader market uncertainty and a flight to safe-haven assets like Treasuries, underscoring the dollar's role as a global reserve currency during times of volatility.