Dollar Soars on Oil Price Surge, Inflation Fears
The US dollar strengthened on Tuesday as renewed hostilities between the US and Iran sent oil prices higher, fueling inflation worries and sparking a global bond selloff.
US air strikes on Iranian targets pushed oil prices up over 4%, with the dollar index rising 0.27% to 99.68 against a basket of currencies including the yen and the euro.
The 10-year Japanese government bond yield touched 3% for the first time in 30 years, while the yield on 10-year Treasury notes hit its highest since January 2025.
Karl Schamotta, chief market strategist at Corpay, said 'A rout in global bond markets is intensifying and the dollar is climbing as an outbreak in hostilities between the US and Iran revives inflation risks, raises the likelihood of interest rate hikes in the months ahead, and makes safe havens more appealing.'