Dollar Rises Amid Gulf Attacks and Escalating Iran Tensions

The US dollar strengthened on Tuesday as renewed Gulf attacks sparked global bond selloffs and stoked inflation worries. Energy price pressures drove euro zone inflation back above 3% in August, with businesses facing a second blow from higher interest rates. U.S. President Donald Trump threatened further strikes against Iran after the first exchange of direct attacks in a month.

The dollar's gain was driven by renewed fears over global security and supply chains. The yen slid past 160 per dollar again as pressure mounted on the Bank of Japan to raise rates. Energy price pressures drove euro zone inflation back above 3% in August, with headline inflation rising to 3.3% from 2.9% in July.