The US dollar strengthened on Tuesday after fresh American strikes in southern Iran weakened optimism over a possible US-Iran peace agreement and lifted oil prices.
The US Dollar Index (DXY) and dollar futures both rose about 0.1%, according to Investing.com data. Investors moved toward safe-haven assets after Washington targeted missile sites and vessels in southern Iran.
Oil prices also rebounded as fears grew over disruption in the Strait of Hormuz, a key route for global crude shipments. Brent crude traded near USD 98 a barrel, while US crude traded near USD 92 a barrel.
US Secretary of State Marco Rubio said negotiations with Iran could still take “some days” after the attacks.
Earlier reports had suggested that both sides were nearing a framework agreement tied to ceasefire terms and the reopening of the Strait of Hormuz.
The stronger dollar pressured major currencies. The euro and British pound retreated after earlier gains, while the Australian dollar fell nearly 0.2% as risk appetite weakened.
China’s yuan also softened slightly, with USD/CNY trading near 6.7861. India’s rupee weakened 0.3% against the dollar after recent gains, while Singapore’s dollar edged lower.
Read: Oil Prices US-Iran Talks Lift Brent Above $97
The Japanese yen remained steady against the dollar after stronger-than-expected inflation data increased expectations of a Bank of Japan rate hike.
Bank of Japan Deputy Governor Ryozo Himino said policymakers were closely monitoring developments in the Middle East and inflation trends.
South Korea’s won outperformed regional peers. USD/KRW fell about 0.4% as local equity markets rallied on semiconductor gains.
