Dollar Climbs Toward Two-Month High as Middle East Tensions Escalate

The dollar pushed toward a two-month peak on Thursday, fueled by a flight to safety as renewed hostilities in the Gulf rattled global markets. With Iranian strikes hitting Kuwait and U.S. military maneuvers intensifying near the Strait of Hormuz, investors are rapidly retreating from risk to the stability of the greenback.

The Japanese yen remains under heavy pressure, hovering near the critical 160 threshold that previously triggered government intervention. While traders watch Tokyo for signs of a market defense, the broader geopolitical instability keeps safe-haven assets in high demand. Oil prices continue to climb, anchored by the reality that the ceasefire between Israel and Lebanon has failed to stabilize the region.

Contrasting the dollar’s steady performance, the euro and British pound managed marginal gains. These currencies are finding support from shifting monetary expectations, as the European Central Bank signals a potential rate hike to combat persistent inflation. Even with this European movement, the dollar index maintains its firm position, bolstered by a domestic U.S. economy that remains resilient against the backdrop of global turbulence.