US-Iran Tensions Fuel Dollar Strength as Yen Hits New Lows
The US dollar saw stabilization on Thursday as escalating tensions between the US and Iran kept investors on edge, driving up demand for the safe-haven currency. The worsening flare-up in the Middle East triggered a rebound in oil prices, which rose by over 1.3% to $95.31 a barrel. Brent crude futures also surged due to concerns about disruptions to global oil flows.
The dollar index, which measures the greenback against a basket of currencies including the yen and euro, eased 0.06% to 101.05. The rise in US-Iran tensions has fueled inflation fears, pushing up two-year U.S. Treasury yields to a 17-month high on Wednesday.
The yen, meanwhile, remained near a 40-year low against the dollar at around 163 per dollar. Japanese finance minister repeated verbal warnings about possible intervention in the currency market, but some investors believe authorities may be tolerating further yen weakness.