Dollar climbs to multi-week high as Iran tensions push oil higher

The U.S. dollar strengthened against major peers as renewed U.S.-Iran hostilities pushed oil prices higher and lifted global inflation concerns, with the dollar index trading near multi-week highs. Higher energy costs and rising U.S. yields contributed to the greenback’s strength, as traders priced in potential or nearer-term Federal Reserve rate hikes. The euro and other currencies weakened on appetite for dollars amid energy-import exposure and shifting policy expectations, while global bond yields climbed to multi-year highs, supporting dollar-denominated assets. Analysts noted that persistent inflation pressures and a hawkish tilt from the Fed could sustain dollar demand, even as some data point to a resilient but uneven U.S. economy. Market focus remained on upcoming U.S. data releases, including employment reports, which could influence the trajectory of policy expectations and currency moves. The broader impact extended to emerging markets and commodity prices, with energy flow disruptions and risk-off sentiment shaping capital flows and financing costs.