In early Asian trade on Monday, the dollar gained strength against most of its peers in a broad rally. Peace talks between the U.S. Navy and Iran had broken down.

The U.S. Dollar Index, which measures the strength of the greenback against a basket?of six currencies, rose as much as 0.5% to 99.187. This was its highest level since April 7.

The British pound dropped 0.6% to 1.3383 while the Australian dollar fell?0.8% at $0.7014. Meanwhile, the New Zealand Dollar was off 0.7%.

Donald Trump, the U.S. president, said that the U.S. Navy will begin blocking the Strait of Hormuz on Monday after marathon talks with Iran failed to produce a peace agreement. This could jeopardize a fragile ceasefire of two weeks. U.S. Central Command has announced that U.S. Forces will begin blocking all maritime traffic into and out of?Iranian port from Monday morning at 10 am ET (1400 GMT).

Analysts from Westpac wrote that the early and thin FX trade this morning reflected a risk-off sentiment, with a broad-based USD rally as a response. (Reporting and editing by Gregor Stuart Hunter)

(source: Reuters)