Dollar Surges Despite Escalating Tensions and Higher Oil Prices

The US dollar has made a comeback after consolidating lower yesterday.

Despite escalating tensions in the Middle East, higher oil prices, and rising long-end US yields, the dollar is trading at its strongest level against the yen since intervention last month.

Treasury Secretary Bessent stated that 'disorderly' yen moves can destabilize global markets, but this seems to have had little effect on currency traders.

The swaps market shows high confidence in a Bank of Japan rate hike, with prices higher than those for the US, which has stronger growth and higher inflation.