The Singapore dollar weakened against the U.S. dollar after U.S.-Iran peace talks collapsed over the weekend, with the greenback rising 0.2% to S$1.2759. Commonwealth Bank analysts warned that optimism about a quick end to the Iran conflict is fading, predicting emerging economies will face fuel and fertilizer shortages as goods remain stranded in the Persian Gulf.

MUFG Bank's Michael Wan noted that Asian currencies of energy-importing nations like the Indian rupee, Philippine peso, and Thai baht are likely to struggle. The senior currency analyst highlighted that traffic through the Strait of Hormuz is unlikely to resume meaningfully, following President Trump's announcement of a blockade. Wan suggested a prolonged conflict appears more probable, increasing costs for the administration.

The U.S. dollar climbed 0.7% to 60.282 peso and rose 1.0% to 32.29 baht, according to LSEG data. Analysts expect the dollar to benefit from its safe-haven status as global growth slows amid escalating tensions. The currency movements reflect growing concerns about supply chain disruptions and economic impacts from the deteriorating situation in the Middle East.