Dollar Surges as Safe-Haven Demand Grows Amid Iran Uncertainty

The US dollar surged on Friday as investors sought safe-haven assets amid rising geopolitical tensions and expectations of a possible Federal Reserve rate hike.

Renewed uncertainty surrounding efforts to resolve the US-Iran conflict increased demand for the greenback, which also benefited from higher US Treasury yields after a report suggested policymakers could consider an interest rate hike as early as September if inflation data remains elevated.

The dollar gained 0.4% against the euro and edged up to 158.505 yen during Asian trading, on track to gain roughly 0.7% for the week. The currency recovered from sharp losses earlier in the week following coordinated intervention by Japanese and US authorities.

Market participants are now focused on the closely watched US nonfarm payrolls report due later on Friday, which could provide fresh guidance on the Federal Reserve's next policy move.