The U.S. dollar edged higher against most world currencies at the opening of Asian markets Monday, as rising hostilities in the Middle East pushed oil prices upward and kept investor confidence on shaky ground following a rough week on global markets.
The greenback rose 0.1% to 162.48 yen, reaching its strongest position since July 9, as traders moved toward safe-haven assets amid growing geopolitical unease. The euro dipped 0.1% to $1.1426, while the British pound held steady at $1.3445. The Australian dollar fell 0.1% to $0.6975, and the New Zealand dollar dropped 0.2% to $0.5833.
Analysts at Westpac noted the relatively calm movement in currency markets, writing in a research report: “FX markets were relatively subdued, with the USD broadly stable, while the AUD weakened against the greenback and most major currencies.”
The analysts also pointed to two factors weighing on investor sentiment: “Market sentiment continued to deteriorate as concerns around semiconductor valuations weighed on risk appetite, while tensions in the Middle East escalated after Iran suspended its commitments under the interim peace deal.”
Brent crude futures surged 3.3% to $90.97 per barrel at the start of Asian trading. The spike came after the U.S. announced Sunday that it had launched a ninth straight night of strikes against Iran, following an earlier announcement that at least two American military personnel had been killed in Jordan.
Traders continue to expect the Federal Reserve to leave interest rates unchanged at its upcoming July 29 meeting. According to the CME Group’s FedWatch tool, Fed funds futures are pricing in an 85.6% probability that rates will hold — a significant jump from the 61.5% likelihood seen just one month ago.
Cleveland Fed President Beth Hammack added her voice Friday to a growing number of policymakers who believe interest rates may need to climb further to bring persistent inflation under control. Her comments set the stage for a heated debate at the Fed’s next gathering, which will be Chair Kevin Warsh’s second meeting leading the central bank and could see dissenting votes.
The U.S. dollar index, which tracks the dollar’s value against a basket of six currencies, climbed 0.1% to 100.84.
In the cryptocurrency market, bitcoin edged up 0.2% to $64,637.89, while ether gained 0.2% to reach $1,869.72.
