Dollar Surges Amid US-Iran Tensions
The US dollar has reached near two-month highs due to escalating tensions between the US and Iran.
Oil prices surged over 3% on Monday, with Brent crude futures climbing above $107 per barrel after President Donald Trump rejected a proposed peace deal with Iran that could have helped reopen the strategically important Strait of Hormuz.
This has raised concerns about potential inflation and pushed up Treasury yields, making dollar-denominated assets more attractive. The dollar index, which tracks the greenback against a basket of major currencies, was little changed at 101.14, but is still on track for a 1.7% gain in September.
Analysts believe that the ongoing energy shock could strengthen the dollar further if tensions persist and inflation risks continue to build.