According to Jin10 data, the dollar rose to its highest level in nearly a month today, as the U.S. strikes against Iran spurred safe-haven demand and highlighted the risks of rising oil prices. Investors are concerned that rising oil prices could exacerbate inflation and prevent the Federal Reserve from cutting rates.
The USD/JPY rose by 1% at one point, following reports that Israel had attacked key Iranian nuclear facilities. Lee Hardman, a senior foreign exchange strategist at MUFG, stated that rising geopolitical uncertainty and risks from energy price shocks provide short-term support for the dollar, and the Federal Reserve is reluctant to cut rates again.