The dollar index rose 0.3% to 98.542 on Monday after Iran’s Fars News Agency reported that two missiles struck a U.S. warship near the Strait of Hormuz.
The reported strike heightened investor concern over a further escalation in regional tensions and pushed markets toward safe-haven assets.
European equities weakened as risk sentiment deteriorated across the region.
The pan-European STOXX 600 index fell 0.9%, while the blue-chip Euro STOXX 50 index dropped 1.7%.
Bond prices also declined, with Germany’s 10-year bond yield rising 5 basis points to 3.082%.
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Germany’s 10-year yield is a key eurozone benchmark, and bond yields move inversely to prices.
