The U.S. dollar held firm at its highest point this week against most major currencies as Asian markets opened Wednesday, following a fresh round of American military strikes against Iran that reignited geopolitical concerns and pushed oil prices upward.
The dollar index, which tracks the greenback’s performance against a basket of six currencies, was trading at 101.18 — its strongest reading since July 2.
The surge in demand for the dollar as a safe-haven currency followed the United States launching a new wave of strikes against Iran on Tuesday. Washington also revoked a license that had permitted Iran to sell oil, a move that came after three tankers were attacked in the Strait of Hormuz.
Analysts at Westpac noted in a research report that worries about the durability of any peace agreement resurfaced following Iran’s attacks on vessels transiting the Strait of Hormuz. “Concerns over the inflation outlook were in focus, seeing yields jump higher across the globe,” the analysts wrote.
Brent crude oil rose 2.6% to $76.12 per barrel at the opening of the Asian trading session Wednesday, marking the second consecutive day of gains.
The New Zealand dollar edged up 0.1% to $0.5681 ahead of an anticipated interest rate decision by the Reserve Bank of New Zealand, which is expected by a narrow margin to raise rates for the first time in over three years.
The U.S. dollar gained 0.1% against the Japanese yen, rising to 162.28 yen. Bank of Japan board member Toichiro Asada, who was the only dissenting vote against the BOJ’s June decision to raise interest rates, told Reuters on Monday that he would need to see evidence of demand-driven inflation before he could back additional rate increases.
The euro dipped 0.1% to $1.1405, while the British pound slipped 0.1% to $1.3353. The Australian dollar held steady at $0.6926.
In cryptocurrency markets, Bitcoin fell 0.2% to $63,518.35, while Ether dropped 0.5% to $1,774.45.
