$Dollar Rises Amid Inflation Fears, Trade Tensions, and Middle East Unrest

The US dollar received a boost from higher U.S. Treasury yields on Friday, driven by rising inflation concerns due to trade tensions and Middle East conflicts.

Oil prices surged past $100 per barrel after Yemen's Houthis struck two Saudi oil tankers in the Red Sea, while US President Donald Trump threatened 'major military punishment' for Iran and its Houthi allies.

The spike in oil prices added to inflationary pressures, which were also fueled by new tariffs imposed on goods from 60 trading partners. This move comes as a temporary 10% global tariff expires.

Vishnu Varathan, Mizuho's head of macro strategy for Asia-Pacific, warned that the world is facing a 'double whammy' of tariffs and price shocks due to supply disruptions.