Asian currencies weakened against the dollar as rising oil prices fueled concerns about global economic outlook. President Trump's threats against Iran's energy infrastructure escalated tensions, with specific warnings about Kharg Island, the primary export hub for most of Iran's oil production.

Currency markets reacted with the dollar gaining 0.7% to 1,527.60 Korean won while edging 0.1% higher to 1.2924 Singapore dollars. The Australian dollar fell 0.2% to $0.6836, reflecting how geopolitical uncertainty in oil markets is driving investors toward the perceived safety of the US dollar.

CBA's Joseph Capurso predicts the conflict will likely persist into at least June, which should continue to strengthen the dollar. The head of Foreign Exchange, International & Geogeconomics emphasized that prolonged tensions in the oil-producing region will maintain upward pressure on the dollar against Asian currencies, particularly those from commodity-exporting nations.