The won led losses as markets fretted over the country’s heavy reliance on imported energy and its vulnerability to oil price shocks

Most Asian currencies dropped sharply on Monday in the first trading session after the U.S. and Israel launched major strikes on Iran, stoking a global risk-off wave and driving investors into safe-haven assets.

The won led losses as markets fretted over the country’s heavy reliance on imported energy and its vulnerability to oil price shocks.

The US Dollar Index edged 0.2% higher in Asian trade after climbing earlier in the session on haven demand. US Dollar Index Futures also traded 0.2% higher as of 03:45 GMT.

Oil prices surged to multi-month highs on fears of supply disruption across the Gulf and potential threats to shipping through the Strait of Hormuz, a critical route for global crude flows.

The spike in energy costs weighed broadly on Asian currencies, particularly those of net oil importers.

In a scenario of sustained oil price increases, we think the likes of KRW, INR, and to some extent PHP are more vulnerable given their linkages to oil imports and also KRW’s higher beta nature, MUFG analyst Michael Wan said in a note.

The won’s USD/KRW pair climbed 1%.

The Indian rupee’s USD/INR pair gained 0.3%, while the Singapore dollar’s USD/SGD added 0.2%.

The yen’s USD/JPY pair edged up 0.2%, with some safe-haven demand capping losses.

The yuan’s onshore pair USD/CNY also advanced 0.2%, while the offshore pair USD/CNH edged up 0.1%. Both pairs were slightly above their 34-month lows hit last week.

In contrast, the Australian and New Zealand dollars recouped most of their early losses after an initial slide driven by the oil shock.

The AUD/USD pair traded flat after sliding 1.2%, while the NZD/USD also recouped nearly 1% drop.